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SEC defendant Almagarby appeals ban, wins

2024-02-21 20:46 ET - Street Wire

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by Mike Caswell

Ibrahim Almagarby, a Florida man banned from the markets for running a $1.14-million convertible note scheme while he was in college, has succeeded in having his ban overturned. (All figures are in U.S. dollars.) The U.S. Court of Appeals has found that Mr. Almagarby's scheme, which involved unloading 7.6 billion discounted shares on the market, was not sufficiently egregious to warrant permanently barring him from the markets. While the sales were illegal, he had consulted lawyers and "appeared to at least try to follow the law," the court has found.

The ruling comes as part of a case in which the U.S. Securities and Exchange Commission claimed that Mr. Almagarby improperly sold shares in three Canadian companies along with other listings. According to the SEC, Mr. Almagarby acted as an unregistered dealer, acquiring discounted shares through convertible notes and unloading those shares on the market in a brief period. On Sept. 29, 2021, a district court judge permanently banned Mr. Almagarby from penny stocks and ordered him to pay $885,126 over the scheme.

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