The SEC charged the operators of a $33 million international microcap stock scheme involving 8 OTC and Pink Sheet U.S. companies HQ'd in the People's Republic of China, Canada, and Israel.  The three companies and eight individuals are charged with engaging in spam e-mail campaigns to pump and dump securities of microcap companies. It is alleged that each scheme was primarily organized and devised by one or all of the following;

• Francis A. Tribble, is a U.S. citizen and former stock promoter.
• How Wai Hui (a.k.a. John Hui), a dual citizen of Hong Kong and Canada, former CEO of China World Trade Corp.
• Kwong-Chung Chan (a.k.a. Bernard Chan), A citizen, resident of Hong Kong and former CFO of China World Trade Corp.
• Gregg M.S. Berger, a stockbroker from Yonkers, N.Y.

There's a parallel criminal proceeding, led by the U.S. Department of Justice today against Berger, charging him with one count of conspiracy to commit securities fraud and wire fraud.  Previously, in related criminal actions, Hui and Tribble pleaded guilty to conspiracy to commit wire fraud, mail fraud and to violate the CAN-SPAM Act, as well as to committing wire fraud and engaging in money laundering for their roles in the scheme to artificially inflate the prices of the securities of several companies, including China World Trade. Hui and Tribble each were sentenced to 51 months in prison for their actions.

    Corporate Insiders Charged.   The SEC also charged the following corporate insiders for participating in the pump-and-dump schemes, and for engaging in a fraudulent scheme to conceal the sales of millions of shares of their companies' securities:

• Xiaoqing Du (a.k.a. Angela Du), who is a dual citizen of Canada and China and CEO and director of Global Peopleline Telecom Inc.
• Chi Shing Ng (a.k.a. Daniel Ng), who is a citizen and resident of Hong Kong and CEO and director of China Digital Media Corp.
• Shay Ben-Asulin, who is a citizen and resident of Israel and former Chairman of m-Wise Inc.
• Mordechai Broudo, an Italian citizen and resident of Israel and former CEO of m-Wise.
• The three companies charged are China Digital, Global Peopleline, and m-Wise.

    SEC Allegations.   Between January 2005 and December 2007, each of the defendants allegedly engaged in 1 or more schemes to pump up the price and volume of the securities of one or more of the companies by paying for false spam e-mail campaigns to drive up demand in the stocks by, among other things, touting non-existent IPOs and acquisitions, presenting an unrealistic picture of the companies' business prospects, providing baseless share price projections, or including false disclaimers.

Defendants then dumped millions of shares of these securities through nominee brokerage accounts they had opened with Berger, reaping millions of dollars in profits.  All eight companies' stocks were dually quoted on the Over-the-Counter Bulletin Board and Pink Sheets.

• Tribble masterminded the pump-and-dump schemes with respect to five of the companies, and arranged for the spam e-mail campaigns for two other companies. 

• Berger, a long-time friend of Tribble, played a central role in the schemes by arranging for the pump and dump of m-Wise and facilitating the sales of millions of shares in all eight companies through nominee brokerage accounts.

• John Hui and Bernard Chan also played key roles in the fraudulent schemes by finding U.S. public shell companies to use in bringing private Chinese companies public through reverse mergers. They arranged for the deposit and sale of stock through nominee brokerage accounts, and coordinated the transfer of the unlawful trading proceeds to pay for the spam e-mail campaigns among other things.

The SEC's investigation is continuing.  For details on to-date settlements, go to:   [SEC PR 11-33, 2/1]