14 DAY TRIAL // A new York Broker has been charged with conspiracy to commit fraud for his alleged role in a multimillion-dollar pump-and-dump stock scheme ran by the notorious spammer Alan Ralsky.
According to Detroit prosecutors, Gregg M. Berger helped sell over 30 million shares for thinly traded Chinese and Israeli stocks after their value was artificially inflated through spam.
Evidence shows that he generated almost $30 million in revenue for Alan Ralsky and his gang, and kept $600,000 as commission.
Pump-and-dump schemes refer to the illegal practice of promoting stock via spam with the purpose of convincing a lot of people to buy shares and increase their value.
When the price is high enough the scammers sell their own shares for significantly more money than what the originally paid.
"Pump-and-dump schemes undermine the integrity of our stock markets. When stock brokers exploit their trusted positions to enrich themselves at the expense of innocent investors, as Mr. Berger is charged with doing here, we will pursue them vigorously," said Assistant Attorney General Breuer.
Berger is also accused of providing Ralsky's co-conspirators with confidential information like trade amounts, prices, cash balances and wire transfer details, without authorization from the owners of brokerage accounts he had access to.
Alan Ralsky, who used to sit at the top of the world's worst spammers list, was sentenced to 51 months in prison in November 2009 for instrumenting the whole pump-and-dump scheme. Nine of his accomplices have also been found guilty and jailed.
Berger is scheduled to be arraigned on February 8. He faces a maximum sentence of 25 years in prison and a $250,000 fine. The U.S. Securities and Exchange Commission (SEC) also filed a civil lawsuit against the former broker and others suspected of being involved in the scheme.