L.A. Man Faces Federal Charges Over Stock
A former tree trimmer accused earlier this month of pocketing nearly $1.4 million from a “pump-and-dump” scheme involving shares of a San Pedro company, is now facing criminal securities fraud charges, federal prosecutors said Monday. But his whereabouts remain unknown.
The U.S. attorney’s office in Los Angeles issued a warrant for the arrest of Stephen Sayre, 43, whom prosecutors accused in a criminal complaint filed Friday of violating federal securities laws in connection with his promotion of the stock of EConnect Inc.
Sayre, who authorities said is a onetime owner of a tree-trimming business, did not return repeated calls seeking comment Monday.
The SEC made identical accusations against Sayre in a separate civil case filed against him on April 7.
A federal judge issued findings of fact that supported several of the SEC’s statements at a hearing Friday in U.S. District Court. Sayre did not appear at the hearing, and was believed to have fled the area, said Aimee Dominguez-Silvers, senior trial counsel for the SEC. The judge also ordered a freeze on Sayre’s assets until his trial.
Sayre is accused of boosting EConnect stock through four phony investment opinions claiming to be from an objective research firm, Independent Financial Reports, which he distributed over a news release service in late February and early March.
The opinions said EConnect was undervalued and could be worth as much as $135 per share within a year. Sayre then allegedly sold 177,300 shares at inflated prices through accounts he controlled for a firm called Silver Screen Industries, according to an FBI investigator.
Most of the profit was transferred to Canadian bank accounts that Sayre allegedly controlled, prosecutors said.
Shares of EConnect rose from $1.39 on Feb. 28 to a high of $21.88 on March 9, the SEC said, bolstered by Sayre’s opinions and by several news releases from EConnect that were later the subject of separate SEC litigation.
In an April 11 interview, Sayre denied profiting from the sale of the EConnect shares. He said that he issued the opinions to build a reputation for his fledging IFR, and that he was an advisor to the owner of the Silver Screen accounts.
EConnect stock rose 6 cents Monday to close at $0.88 in over-the-counter trading.
