The U.S. Securities and Exchange Commission has filed civil charges against California lawyer Brian Reiss for helping several companies fraudulently issue free-trading shares. The SEC claims that Mr. Reiss repeatedly wrote opinion letters that removed trading restrictions, without even making token inquiries into whether the stock could be traded. He continued doing so even after the pink sheets banned him, the SEC says.
The companies that Mr. Reiss allegedly serviced included Primegen Energy Corp., a Vancouver-linked pink sheets promotion that included William Scott Marshall on its board. The SEC says that Mr. Reiss helped Primegen issue 20.5 million shares that the company ultimately used to pay a promoter. That promoter, in turn, helped the company issue a number of news releases that falsely claimed drilling success in Russia, among other things, the SEC claims.
Opinion letter charges
The allegations against Mr. Reiss are contained in a civil complaint that the SEC filed on Thursday, March 7, in the Southern District of New York. The complaint describes Mr. Reiss, 59, as a lawyer who ran a website called 144letters.com (a reference to Rule 144, which allows companies to make restricted shares tradable if a number of conditions are met). The website offered an opinion letter service at a rate of $285 per letter, with a volume discount that brought the rate down to $195. (All figures are in U.S. dollars.) The site included the note "penny stocks not a problem."
