Federal prosecutors have reached a plea agreement with one of 15 people alleged to have participated in an international pump-and-dump ring that netted more than $30 million.
Court records show that Mark Harris, a stock promoter who lives in Arizona, pleaded guilty to conspiracy in one of two related criminal cases. According to a document submitted last week, Harris will not be sentenced until after the trials in those cases, which currently are set for next March and June, respectively.
It is unclear whether Harris has agreed to testify against the other defendants in the case. A filing spelling out the specifics of his plea deal was sealed by the judge.
Prosecutors have identified the architects of the two schemes as Regis M. Possino, a disbarred lawyer with convictions for drug dealing and fraud, and Sherman Mazur, a former real estate mogul who also has a prior conviction for fraud. They once operated from a shared office space in Santa Monica, Calif.
The indictments announced earlier this year allege that Possino and Mazur headed two intertwined networks that fraudulently inflated the share prices of small public companies before dumping their holdings on unsuspecting investors.
The indictments said the participants in the schemes acquired a large percentage of the shares in those companies and distributed those shares to nominees to conceal their ownership. They boosted the share prices through manipulative trading and misleading press releases, then sold the shares.
Authorities said the schemes defrauded more than 20,000 investors in the United States and abroad. They said the participants in one set of alleged pump-and-dumps reaped more than $18 million, while those in the other made at least $13 million.
Harris, Possino, Moyal and Nix are defendants in both cases.
The public companies used as vehicles in the schemes included Sports Endurance Inc. (OTCBB: SENZ); GenMed Holding Corp. (OTCBB: GENM) and BioStem U.S. Corp. (OTCBB: HAIR).
According to an article in the Vancouver Sun, Harris made a fortune in the 1980s and 1990s working for offshore boiler rooms that used high-pressure sales tactics to sell shares of dubious companies to investors around the world.
Those activities were disclosed as part of a contentious divorce case. More recently, Harris has worked to promote the shares of penny-stock companies. Among other things, he paid others to conduct tout campaigns on behalf of those companies.