The final, final chapter?: Stock Promoter Pleads Guilty To Role In $12M Fraud 10/18/0 18:16 (New York)
By Colleen DeBaise
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--A convicted stock promoter pleaded guilty Wednesday to
his role in a market manipulation scheme that authorities say bilked investors
out of $12 million.
Peter Tosto, also known as Peter Lybrand, acknowledged that he artificially
inflated the stock prices of three companies by manipulating trades to create
the illusion of a real market for the shares.
Tosto told U.S. District Judge Denny Chin in Manhattan federal court that he
concealed from investigators his control of eight offshore entities through
which he bought stock in the three companies.
Prosecutors said Tosto, 36, used so-called "wash" trades and "matched" buy
and sell orders in order to inflate the share prices of Polus Inc. (POLU) ,
Citron Inc. (X.CTO), and Electronic Transfer Associates Inc. (ECTS).
All three stocks soared in early 1999 until the Securities and Exchange
Commission halted trading, citing concerns about the adequacy and accuracy of
reports about the companies.
Tosto also was charged with issuing misleading press releases in order to
boost market demand for the stock. He eventually sold his personal holdings
for
a profit of $6.4 million, prosecutors said.
The SEC filed related civil charges against Tosto and three other men who
allegedly helped him manipulate the market. That case is still pending in
Manhattan federal court.
Tosto, a former stock broker, pleaded guilty in 1998 to conspiracy to commit
securities fraud in connection with a broker-kickback scheme involving San
Diego Bancorp securities. He was awaiting sentencing in that case when the
latest charges were brought. He has been held without bail since February.
The judge granted a joint request from Assistant U.S. Attorney Joanna Hendon
and Tosto's attorney, Charles Ross, that Tosto be sentenced in both cases on
Jan. 3. Under his plea agreement with prosecutors, Tosto faces a prison term
in
the range of six to seven years, and fines of more than $1 million, on all
counts.
Ross said his client changed his name to Lybrand, his wife's last name, in
May 1998. He said he didn't know the reason for the name change.
-Colleen DeBaise, Dow Jones Newswires, 212-227-2017,
colleen.debaise@dowjones.com |
