Fourteen people were arrested today and charged with stock manipulation that bilked 20,000 investors out of an accumulated $30 million.
According to the United States Attorney's Office for the Central District of California, the accused gained control of the majority of the stock of publicly-traded companies, often co-opting company management. The accused then inflated the stock's price through slick marketing campaigns.
Stock promoters engaged in cross trading to make it appear the stocks were actively traded. Profits were then moved to offshore accounts.
The companies targeted were marginal but touted as having achieved some breakthrough in their sector. Companies ranged from hair restoration to oil and gas development.
Pamela Anderson, who is not implicated of any wrongdoing, was the spokesperson for one of the companies, frogads.com.
The case is a three-year investigation by the FBI and Internal Revenue Service.
"This case has dismantled a far-reaching stock market manipulation scheme run with ruthless efficiency and operated with one goal in mind – to steal money from the investing public," said United States Attorney André Birotte Jr. in a news release.
"This type of predatory behavior cheats the average investor, erodes overall confidence in the markets, and has a devastating impact on companies and their employees."
The frogads.com promotion is still on YouTube.