SEC v. Magdalena Tavella et al., Case No. 13 CIV 4609 (S.D.N.Y.). On July 3, 2013, the SEC announced charges against eight Argentine citizens for selling millions of shares of Biozoom. The SEC also obtained an emergency order to freeze assets in the U.S. brokerage accounts of the eight defendants and two other Argentine citizens who had Biozoom shares but had not yet sold them. Last week, the SEC suspended trading in Biozoom. According to the SEC, the ten defendants received about one-third of the outstanding shares of Entertainment Art, which later became Biozoom. Eight defendants allegedly sold millions of shares which yielded almost $34 million, nearly half of which was wired to overseas bank accounts. The remaining proceeds were in U.S. brokerage accounts were frozen by the court. The SEC sued Magdalena Tavella, Andres Horacio Ficicchia, Gonzalo Garcia Blaya, Lucia Mariana Hernando, Cecilia De Lorenzo, Adriana Rosa Bagattin, Daniela Patricia Goldman and Mariano Pablo Ferrari — along with two others, Mariano Graciarena and Fernando Loureyro, who received shares but did sell them. The SEC alleges that the when the defendants put the Biozoom stock into their U.S. brokerage accounts, they said they got the shares from Entertainment Art shareholders who purchased them in private placements. The defendants provided fake stock purchase agreements to substantiate the claim. As a result, the defendants’ shares of Biozoom were deposited into their accounts as shares that purportedly could be freely traded and the defendants sold them even though no registration statement was filed with the SEC for any of the sales transactions. The defendants are charged with violating Section 5 of the Securities Act. The SEC seeks injunctive relief, disgorgement, and civil monetary penalties.
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