Brokers Accused of Penny Stock Fraud: Federal...

Brokers Accused of Penny Stock Fraud: Federal regulators charged 10 New York-area brokers with bilking investors of about $1.4 million through fraudulent penny stock sales, in a case that names only the securities salesmen and not their firms. A civil lawsuit filed in Manhattan federal court said the brokers conducted illegal trading at several firms using techniques that included pressuring investors to buy stock, refusing to let them sell and promising that prices would rise. The Securities and Exchange Commission complaint alleges that the brokers made more than $270,000 in commissions from 60 defrauded customers and seeks recovery of all ill-gotten gains.