SEC Charges San Francisco-Based Penny Stock Comp

SEC Charges San Francisco-Based Penny Stock Company CEO for Defrauding Investors in Pump-and-Dump Scheme
FOR IMMEDIATE RELEASE
2014-255
Washington D.C., Nov. 17, 2014 — The Securities and Exchange Commission today charged a San Francisco-based penny stock company CEO with defrauding investors by issuing false and misleading press releases portraying his purported marketing and infomercial company as a successful venture in order to drive the stock price up while he covertly sold millions of shares into the public market for more than $300,000 in illicit profits.
According to the SEC’s complaint filed against Joseph A. Noel in federal district court in San Francisco, the deceptive press releases about his company YesDTC Holdings touted exclusive distribution rights, licensing agreements, and certain products purportedly certified by the government.  Noel’s promotional campaigns based on such false information caused a spike in YesDTC’s thinly-traded stock and enabled him to dump millions of his own shares for a profit.  To conceal his sales, Noel sold the shares through a company he created in his teenage daughter’s name without disclosing as required that he was actually selling the shares.

The SEC also suspended trading in YesDTC stock today, and instituted an administrative proceeding to revoke its registration.

“Noel issued false press releases to pump up the price of the stock and set up a nominee company to dump the shares into the market to unwitting investors,” said Jina L. Choi, Director of the SEC’s San Francisco Regional Office.  “We’re always on the lookout for penny stock company CEOs who manipulate the market to line their own pockets.”     

The SEC’s complaint charges Noel with violating antifraud and registration provisions of the federal securities laws.  The SEC seeks disgorgement of ill-gotten gains plus prejudgment interest and a financial penalty as well as a permanent injunction.  The SEC also is seeking an officer-and-director bar and a penny stock bar against Noel.