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Showing posts from February, 2015

Securities Fraud: Irrevocable Liability Establishes the Locus of a Securities Transaction For Purposes of Determining Whether a Transaction was Domestic

In United States v. Georgiou, Nos. 10-4774, 11-4587, and 12-2077, the Third Circuit upheld the defendant’s securities fraud, wire fraud, and conspiracy convictions against a host of legal challenges.Georgiou was accused of engaging in a scheme to manipulate the markets of four over-the-counter stocks, i.e. stocks not listed on an American stock exchange.Georgiou and his co-conspirators opened brokerage accounts in Canada, the Bahamas, and Turks and Caicos and then used these accounts to engage in manipulative trading in the target stocks.By trading stocks between the various accounts they controlled, the co-conspirators were able to artificially inflate the stock prices to create an impression that each target stock had an active market.The manipulation allowed Georgiou and his co-conspirators to sell their shares at inflated prices and to use the inflated shares as collateral to fraudulently borrow funds on margin and obtain millions of dollars in loans from different brokerage firms…