SEC screws InvestorsHub - Matthew Brown

Jul 29, 2011
review #252045

SEC target Matthew Brown must pay "financial death_sentence"

2011-07-27 14:47 ET - Street Wire

http://www.stockwatch.com

Matthew Brown, jailed operator of the Investors Hub website, has lost his bid to overturn a $4.78-million criminal penalty for a market manipulation scheme he aided. (All figures are in U.S. dollars.) Delaware Judge Sue Robinson, in an order handed down on Thursday, July 21, dismissed a motion by Mr. Brown to reduce his fine to the amount he actually made, which he calculated at $117,000.

The decision comes as Mr. Brown, 29, is serving a four-year jail sentence for the scheme. Prosecutors claimed that he and others manipulated stocks with prearranged trades and posts on Investors Hub. One of the companies included in the investigation was an Ontario-based pink sheets listing, Playstar Corp. Mr. Brown pleaded guilty to the charges in February, 2010, and the judge sentenced him to four years in jail and entered a $4.78-million forfeiture order.

Before he went to jail, Mr. Brown filed a motion in which he complained that the amount of his fine was excessive. As he understood it, by entering a guilty plea he was only agreeing to forfeit his personal gains from the scheme. He did not know that he would receive a "financial death sentence," he claimed.

He also argued that the government held him liable for profits made by people who were not even charged with anything. "Instead of pursuing these individuals, [prosecutors] have sought to make Brown pay for everybody's gains, despite him having gained among the least amount of money," the motion read.

The government, for its part, argued that the fine accurately represented Mr. Brown's plea agreement. In a response to Mr. Brown's motion filed on June 8, 2011, prosecutors said that Mr. Brown agreed to forfeit all proceeds from the scheme, not just the portion that he received. Moreover, he received notice of the forfeiture six days before his sentencing. The time to raise the dispute was then, and not days later.

In addition, prosecutors cited the substantial harm that Mr. Brown and others inflicted on investors. In one instance, they caused a stock to rise by more than 150 per cent in hours, and sold shares worth $747,609. The government also pointed out that the judge could have ordered Mr. Brown to forfeit as much as $9.4-million, or twice the total proceeds of the scheme.

Judge Robinson, in deciding for the prosecution, simply said that she did not have jurisdiction to alter her earlier forfeiture order. Presumably, this means that Mr. Brown's only option is to appeal the order to a higher court.

Brown's indictment

Federal prosecutors indicted Mr. Brown on May 21, 2009, in the District of Delaware. They claimed that he and others dumped hundreds of millions of shares in manipulated pink sheets companies in 2006 and 2007. While the overall investigation included four stocks, the specific charges against Mr. Brown were limited to two companies.

The first was an anti-aging promotion called GH3 International Inc. In 2006, he and others received millions of GH3 shares through improper Rule 504 offerings, prosecutors claimed. In December of that year, they carried out a series of prearranged trades that coincided with misleading news. Among other things, the company claimed that its revenue would exceed $6-million in 2007.

The stock, which was a thin trader to that point, went from 0.06 cent to 1.8 cents, before quickly falling to 0.01 cent. Its daily volume spiked to nearly 300 million shares. (The U.S. Securities and Exchange Commission eventually halted the company on Dec. 24, 2009, saying its publicly available information was questionable.)

The other manipulation that Mr. Brown pleaded guilty to was that of Asia Global Holdings Inc., a company that purportedly had the rights to the show "Who Wants to be a Millionaire" in China. As with the GH3 manipulation, Mr. Brown and the others improperly issued millions of shares and co-ordinated manipulative trades to coincide with misleading news. The stock had a 41-cent high in 2006 (and was last at 0.38 cent).

According to the indictment, Mr. Brown and the others planned the promotions using the America Online messaging service. Their communications, which prosecutors quoted in the indictment, included information on the timing of the news releases and on how the men were touting the companies on-line. One message, dated Nov. 1, 2006, stated, "u have all the prs [press releases] right, except the first one, which im going to work on tomorrow for sure, we need a plan on line up of events and i need to see the *** prs to see which rumor to spread and how to start the *** thing ... ."

The indictment also described an unusual interstate money transfer, in which Mr. Brown paid a driver $10,000 to take $146,000 in cash from California to Delaware. (Documents in a related asset forfeiture case stated that the driver, who knew Mr. Brown from high school, was to deliver the cash to a Polish citizen named Pawel Dynkowski. The delivery went awry when a Texas police officer stopped the car and discovered the cash. Police had the driver deliver the money to Mr. Dynkowski's home in Delaware. They then searched the home and discovered evidence of the market manipulations.)

Prosecutors separately indicted Mr. Dynkowski for the manipulations on April 30, 2009. Authorities have yet to arrest him and he is listed as a fugitive. Another man charged in the case was Florida resident Gerard D'Amaro, who received three years in jail and was ordered to forfeit $1.49-million. Two others, Marc Riviello and Jacob Canceli, both from California, have also pleaded guilty but have not yet been sentenced.

SEC case

In addition to the criminal charges, Mr. Brown and the others are facing a parallel civil suit from the SEC. The regulator claims that they made $6.2-million manipulating Playstar, GH3 International, Asia Global and Xtreme Motorsports of California Inc. That case is on hold pending completion of the criminal cases.

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Pennyscammer

Mar 31, 2013

Matt Brown should have gotten MORE time in prison - like 10 more years. He owes $4.8 million but that is a tiny fraction of the billions that are lost because iHub is a scandal sheet promoting scams and aiding and abetting penny stock promoters and compensated scammers. The iHub staff actively works with pennystock pump-and-dumpers and you bet they get paid under the table for those services.

1 0 Reply
mad investor

Jan 09, 2013 Santa Maria, California

they should investigate hdogtx on ihub,he pumps/lures investors and dumps on them and on his website he points out he was compensated by that company for doing the promo AFTER he sells out,needs to be investigated asap...even was pumping a huge merger long after one fell apart...that ceo even had to give a press release to tell there was no merger

0 0 Reply
Ihubber

May 16, 2012

I got banned for posting this url on a post for MSLP. They are trying to kill this stock. Buy and you will be rewarded....this is a NEAR future big board stock being help by MM manipulation, Ihub, and short. This is going to explode...do some DD and you can all get back what you lost!!

Good Luck to ALL. MSLP

0 0 Reply
funny

Apr 26, 2012

I'm amused by all the angry comments here. I bet you anything at least half of you were ihubbers that got screwed because you traded on info you got from a MESSAGE BOARD SITE! LOL I "love" this country. People get swindled, and then want to blame the person that duped them... when you should just blame your own stupidity! If those ihub rats should be jailed, then you should too, for being dumb enough to get screwed by them! No one told you to go to some half-baked pump&bash forum and lend credence to what you read! Stop trying to make others the scapegoats for your own shortcomings, assume culpability for your own free will and move on with your damaged life.

0 1 Reply
zardiw

Mar 08, 2012

Unbelievable how the sec screwed a little guy......when they can't even settle the effing trades and turn a BLIND EYE to MASSIVE market corruption and naked shorting:

sec to Matt: 'OH..you thought we meant just YOUR proceeds.....how could you make that mistake???....We DID say ALL proceeds.......lol.....sucka'

z

0 1 Reply
Old Silicon Investor Member

Feb 02, 2012 Erode, Tamil Nadu

Robert Zumbrunnen, Matt Brown, et al., have been operating what appears to be a criminal enterprise for over a decade. The ops has simply moved its base from Silicon Investor to IHUB. This outfit has brought us the likes of Anthony Elgindy and his criminal ring which used members of Silicon Investor to move markets in thinnly traded issues to line their own pockets. This message boards are set-up to be judgment-proof and to protect the posters using the boards to move these markets by protecting their identitites. Matt Brown got off lucky with a few years and a few million in penalties. Robert Zumbrunnen should be sharing Matt's cell. He assisted Elgindy's criminal enterprise by giving Elgindy Silicon Investor and its members to exploit and manipulate. May they all finally get what is coming to them.

1 0 Reply
Reality

Jan 27, 2012

Clueless people, Brown sold iHub before this stuff happened, Zumbrunnen had also sold, there were no claims of wrongdoing by him, iHub or any of its staff. DHS, DOJ, IRS, SEC major investigation and none ever even suggested wrongdoing by any of these parties.

0 0 Reply
billyboy118

Jan 18, 2012

I would be more than happy to join in on any court case against Ihub and their administrators..I also believe that their site should be shut down and their administration jailed for stock manipulation..
Contact me ihubber, get'em, CBAI and Jo..Let's get started..

1 0 Reply
IHub sucks

Dec 16, 2011

Brown got what he deserved. I'm hoping this will prompt the SEC to look into Bob Z, IHub's obnoxious owner.

2 0 Reply
Transfer Technology

Nov 16, 2011

$TTIN is worth a look înto people.

0 0 Reply
ihubber

Nov 07, 2011

I hub continues to suppress positive posters on TYTN while letting bashers run wild with their comments. The administration of Ihub is a bunch of crooked stock manipulators. I am not kidding, I will report attacking posters for attacks and spam as they repeat their nonsense posts over and over without anything being done about it. But if I simply cut and paste their post and put it in a quote then direct it towards them, my post gets deleted and I'm reprimanded for it. Ihub is a bunch of kids who think they are smarter than the law. The website Ihub needs to be shut down and the administration jailed for their stock manipulation schemes. If they are not pumping and dumping they are bashing and suppressing legitimate posts and posters. Report all Ihub suppression and P&D schemes directly to the Judge who is constantly hearing the cases against Ihub. Since I can't post a link, it's easy to find Ihub court cases just by doing a search for Ihub Matt Brown sentenced. Lets put Administrators "Geek Dave" and his co-conspirators behind bars as they think they are above the law.

1 0 Reply
get'em

Aug 10, 2011

whee do you sign up to help out the SEC civil case... count me in!

1 0 Reply
CBAI

Jul 30, 2011

Go check out the CBAI board. UP down, Karin, are moderators of this ill ran board. They are also moderators of the other stem cell boards in direct competition with each other. CONFLICT of INTEREST. They blatently lie and mislead anyone there. They also ban anyone in support of the company and let anyone who speaks bad continue to do so. VERY VERY illiegal. But they are volunteers or are they?

1 1 Reply
jo

Jul 30, 2011

they should get the administrators, shelly, linda, dave and a few others included in this. Plus several of the volenteer??? moderators.

1 0 Reply

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