SEC Charges John Rizzo with Running A Boiler Room Scheme

SEC v. John G. Rizzo, Case No. 3:13-cv-01801 MMA BLM (C.D. Cal.).  On August 6, 2013, the SEC announced fraud charges against John G. Rizzo, the former CEO of iTrackr Systems Inc.  The SEC alleges that Rizzo used escrow agents and bank accounts in the U.S. to make iTrackr investments appear more legitimate.  However, once investors wired funds, Rizzo arranged to have the money transferred to bank accounts in Belize.  According to the SEC, he did this to hide his use of investor money to pay boiler room operators and his own expenses.  The SEC alleges that Rizzo would pay boiler room operators large commissions for the money they raised from investors.  He did not disclose this arrangement.  The SEC charged Rizzo with violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5. The SEC seeks financial penalties, disgorgement, officer-and-director and penny stock bars, and injunctive relief.

This entry was posted in Securities and tagged , , , . Bookmark the permalink.