Pump and Dump
The Illinois Administrator has filed a complaint based on a securities fraud conspiracy conviction
Beginning no later than September 2014 and continuing until in or around January 2017, Respondent, Michael Wexler, Ongkaruck Sripetch, and Brehnen Knight conspired to commit securities fraud and manipulative securities trading, in violation of Title 18, U.S.C. § 371. Specifically, Respondent, Wexler, Sripetch, and Knight conspired to conduct an illegal pump-anddump scheme surrounding VMS Rehab Systems, Inc. (“VMS”) and its stock. Wexler was the chief executive officer of VMS. Sripetch ran a stock promotion website called Stockpalooza and controlled Optimus Prime Financial, Inc. Respondent maintained a domestic brokerage account.
A pump-and-dump scheme was a fraudulent scheme that involved the artificial inflation of the stock price of a publicly traded company (the “pump”) so that individuals who controlled a substantial portion of the company’s stock could sell shares of that stock at artificially high prices (the “dump”). Generally, such schemes effected the artificial inflation in share price by, among other things, issuing news releases and promotional materials regarding the company and its stock – often containing false, misleading, or exaggerated information – and by engaging in manipulative trading of the stock to affect its price and generate the appearance of demand for the shares…
Between at least March 2016 and January 2017, Respondent, Wexler, Sripetch, and Knight, carried out various aspects of their agreement to perpetrate a pump-and-dump scheme involving VMS and its stock.
Federal criminal charges
In the plea agreement, Respondent admitted that he committed each element of the offense of conspiracy to commit securities fraud and manipulative trading. Respondent further admitted that the unlawful gain that resulted from the offense was approximately $499,100.
On January 29, 2024, the Honorable Marilyn L. Huff, United States District Judge, entered a judgment of conviction against Respondent as to Count 1 of the indictment in case number 20CR0160H, and imposed a sentence of 3 years’ probation and a $100 assessment. Judge Huff also ordered Respondent to pay restitution in the amount of $41,953.26 to the victims of his offense. The judge dismissed Count 2 as to Respondent on the motion of the United States.