California Man Charged in Stock Manipulation Scheme
| U.S. Attorney’s OfficeFebruary 24, 2015 |
A criminal information has been filed in federal court charging Stephen J. Wilshinsky, 59, of Woodland Hills, California, and former stock broker with the Compass Group of Oppenheimer Inc. and Marquis Financial Services of Indiana, Inc. with one count of conspiracy to commit securities fraud, securities laws violations, and wire fraud, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of FBI’s Cleveland Office.
The information charges that on or about March 13, 2008, through in or around September 2012, Wilshinsky, together with at least three other co-conspirators, agreed to defraud investors and potential investors in public companies Kensington Leasing, Ltd. and Lenco Mobile, Inc.
They did this by issuing millions of shares to themselves at little or no cost and then artificially controlling the price and volume of traded shares by, among other means, paying undisclosed commissions to brokers and former brokers for directing client funds to make both authorized and unauthorized investments and fraudulently concealing the co-conspirators’ ownership interests in the manipulated public companies, according to the information.
The co-conspirators then profited by selling their shares of the companies’ stock at artificially inflated prices to Wilshinsky’s clients at Oppenheimer and Marquis. Little or no portion of the investments went to fund the operations of the companies. Rather, Wilshinsky and his co-conspirators used the investments to enrich themselves, according to the information.
Wilshinsky received approximately $1.2 million in undisclosed cash commission payments and approximately 500,000 shares of stock from one or more co-conspirators as part of the scheme, which Wilshinsky then sold or transferred. In total, Wilshinsky received more than $1.4 million in cash and stock for participating in the conspiracy, according to the information.
The information was filed by Assistant U.S. Attorneys Christos N. Georgalis and Adam Hollingsworth after an investigation by agents of the Federal Bureau of Investigation.
If convicted, the defendant’s sentence will be determined by the Court after a review of factors unique to the case, including the defendant’s prior criminal record, if any, Defendant’s role in the offense, and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
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