SEC v. Colin McCabe (D/B/A Elite Stock Report, The Stock Profiteer, and Resource Stock Advisor), Case No. 2:13-cv-00161 (D. Utah). On March 4, 2013, the SEC announced fraud charges against Canadian stock promoter Colin McCabe. According to the SEC, McCabe made false statements about how he selected the stocks he was recommending; did not tell his newsletter subscribers that he was being paid large sums of money to recommend certain stocks; and made untrue statements about the assets of one of the issuers he recommended. McCabe claimed that his publications were the result of extensive research conducted by researchers with relevant expertise. In reality, the research consisted of reviewing SEC filings, press releases, and websites. In addition, McCabe did not have any assistance in researching stocks or writing his publications. At the same time that he was hyping the quality of his research, McCabe did not tell his newsletter subscribers that he was paid more than $16 million to promote some of the same stocks he recommended to them in his other publications. The SEC charged McCabe, doing business as Elite Stock Report, The Stock Profiteer and Resource Stock Advisor, with violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The SEC seeks injunctive relief, civil monetary penalties, and disgorgement plus prejudgment interest.
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