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by Mike Caswell

Toronto's Andy DeFrancesco has suffered a legal setback in his fight against charges the U.S. Securities and Exchange Commission brought against him for an $8-million pump-and-dump on the OTC Markets. (All figures are in U.S. dollars.) A New York judge has denied a motion he filed to dismiss the case, clearing the matter for trial. Mr. DeFrancesco had complained that misleading news releases the SEC cited him for amounted to "corporate puffery," but the SEC said that his rapid sale of millions of shares demonstrated otherwise.

The setback comes as part of a case that the SEC is pursuing against Mr. DeFrancesco for the pump-and-dump of Cool Holdings Inc., a company that supposedly sold Apple products through a chain of retail stores. The stock went to a high of $18.25 amidst misleading news releases and paid articles, one of which touted the company as having a "$900 Million Opportunity from Apple," the SEC claims. Meanwhile, Mr. DeFrancesco (who was the company's chairman) unloaded 1.6 million shares, generating $8-million in gains, according to the SEC.

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