On September 30, the Commission filed a lawsuit against 2DoTrade, Inc.,
its president, several recidivist stock promoters, and two attorneys in
a "pump-and-dump" market-manipulation case. 2DoTrade is an SEC-
reporting company whose stock was formerly quoted publicly on the OTC
Bulletin Board. According to the SEC's complaint, from July to November
2001, the defendants engaged in a fraudulent scheme in which they
artificially pumped 2DoTrade's stock with false press releases, spam e-
mail, and a fraudulent website and then illegally dumped millions of
shares into the inflated market. At one point in the scheme-amid
recurring reports of fatal anthrax attacks in the United States-several
of the defendants sought to profit from the nation's fear of terrorism
with false press releases about 2DoTrade's purported imminent
distribution of an anti-anthrax compound in the United States. In a
separate civil lawsuit filed on the same day, the SEC alleged securities
fraud and other violations against a California attorney and accountant
who created and sold the public shell company used in the 2DoTrade
scheme.
The 2DoTrade complaint alleges that, in June 2001, defendants Barry W.
Gewin, 36, of Enon Valley, Pennsylvania, Eric T. Landis, 38, of
Charlottesville, Virginia, and Dominic Roelandt, 26, of Dehderhoutem,
Belgium, gained de facto control of 2DoTrade-a shell company with no
assets or revenue-by acquiring control over virtually all of its "free-
trading" stock. Then, in collusion with 2DoTrade's president, defendant
George R. Taylor of Ayrshire, Scotland, they manipulated 2DoTrade's
stock price in two fraudulent promotional campaigns. The first
campaign, which took place in July and August 2001, touted 2DoTrade's
ownership of certain import/export contracts supposedly worth $300
million. In reality, these contracts were worthless. The second
campaign, which began in October 2001, claimed that 2DoTrade was testing
an anti-anthrax compound called "ATHOQ" at a hospital and a university
in the United Kingdom for imminent distribution in the United States.
In reality, ATHOQ was a sham, and no anthrax testing or product
distribution ever occurred.
During the bogus-contract campaign, the defendants dumped millions of
shares into the market, collectively realizing approximately $1.6
million in trading profits. As the defendant's sold their shares, the
share price gradually declined by the end of August 2001. Beginning on
Oct. 31, 2001, however, the bogus anti-anthrax campaign drove up
2DoTrade's stock price again, this time by approximately 400%. During
this period, certain defendants dumped over 700,000 shares into the
market, for which they collectively received approximately $240,000. An
SEC trading suspension on Nov. 6, 2001, halted trading in 2DoTrade's
stock and prevented some of the defendants from dumping millions of
additional shares.
Other defendants named in the 2DoTrade complaint include several nominee
companies controlled by Gewin, Roelandt, and Landis, as well as the
following:
sec.gov |
