SEC Accuses Putnam Resident of Penny Stock Manipulation

The Securities and Exchange Commission has charged Putnam County resident Guy Gentile, 39, with perpetrating penny stock manipulation schemes.

Pumping up the prices of stocks in two companies and then selling them to investors generated $17.2 million in gross trading proceeds for Gentile and his associates, according to Bloomberg.com.

Gentile, who lives in Putnam Valley, owns a broker-dealer in Carmel.

He is a member of the Putnam Valley Volunteer Fire Department and the Friends of Don Smith, the Putnam County Sheriff, and his LinkedIn profile also lists other local and national affiliations.

The SEC alleges that he engaged in manipulative trading, provided illegal kick-backs, and distributed promotional materials-- with fake publication names like "Stock Trend Report" and "Global Investor Watch" -- all in order to tout the stocks of purported gold and silver exploration company Raven Gold Corporation (RVNG) and natural gas production company Kentucky USA Energy (KYUS).

The newsletters misled investors with purportedly positive -- but fake- - price and volume trends for these stocks and other false information about the promoters' identity, compensation, and control of the stock, SEC officials said.

In reality, most of that market activity was generated by Gentile and his associates who controlled large blocks of the companies' stocks, SEC officials said.

Last year, the SEC charged attorney Adam Gottbetter for his role in the KYUS scheme, as well as Canadian stock promoters Mike Taxon and Itamar Cohen for their roles in the RVNG and KYUS schemes.

Taxon and Cohen pleaded guilty, according to Bloomberg.com.

The SEC's complaint, filed in federal court in New Jersey March 23, alleges that Gentile violated Sections 5(a), 5(c), 17(a) and 17(b) of the Securities Act of 1933, and violated and aided and abetted violations of Section 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule 10b-5.

So he's charged with securities fraud, which carries a maximum prison term of 20 years, and conspiracy to commit securities fraud, according to Bloomberg.com.

The SEC seeks disgorgement of ill-gotten gains, civil money penalties, injunctions against future violations, and a bar against participation in penny stock offerings.

Read: SEC Complaint

PHOTO/LinkedIn