SEC: Broker Faked Press Releases to Spike Stock Prices

Submitted by Melissa Lajara on Tue, 10/27/2009 - 14:40

A securities broker from Merrick, N.Y., has been charged with securities fraud for "repeatedly creating and then distributing fake press releases to manipulate the stock prices of multiple publicly traded companies."

The Securities and Exchange Commission (SEC) complaint alleges that Lambros Ballas, a registered representative of New York stock brokerage firm Global Arena Capital Corporation, purported to announce good news regarding the companies, including that Google was buying one of them at a substantial premium. Ballas then posed as an investor on Internet message boards, touting the announcements he had fabricated. In one instance, his scheme caused the stock price to increase by nearly 80 percent within a few hours of the issuance of his phony press release.

"The scheme is all the more disturbing and warranting of this swift SEC action because Ballas is an industry professional responsible for handling his customers’ brokerage accounts," said Marc Fagel, director of the SEC’s San Francisco Regional Office.

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