Hemp Industry Daily reports…
Three California men have been convicted for trying to boost the stock price of a shell CBD company by writing bogus press releases making it seem like the business was prospering.
Chip Hackley, George Matin and Harold Minsky pleaded guilty to conspiracy, wire fraud and securities fraud, Law360.com reported. Hackley and Matin were sentenced last week to 15 months in prison and two years of supervised release.
The trio had acquired all of the company’s restricted and free trading shares to control the timing, volume and price of trades after issuing press releases, according to court documents. Prosecutors said the men agreed to give an initial 40% cut to someone to write the fake releases, but the person cooperated with the FBI.
DOJ Press Release
Three California Men Sentenced for Scheme to Manipulate Stock Prices of Two Public Companies
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Chip Hackley, 49, of Hermosa Beach, CA, and George Matin, 51, of Los Angeles, CA, were each sentenced to 15 months in prison, to be followed by two years of supervised release, by United States District Court Judge Paul S. Diamond for conspiracy, wire fraud, and securities fraud. Previously, on September 16, 2020, Judge Diamond sentenced their co-conspirator, Harold Minsky, 81, of Northridge, CA, to one year and one day in prison, to be followed by the same term of supervised release.
Minsky, Matin, and Hackley conspired to manipulate the stock price and trading volume of public companies. As part of this conspiracy, Minsky and Matin attempted to manipulate the stock of two public companies: WGE Holdings Corp. (ticker symbol WGE), a gold mining business, and Holy Grail (ticker symbol HGRL), which produced and sold hemp and Cannabidiol (“CBD”) products. Hackley joined the scheme later, participating only in the manipulation of HGRL.
The conspirators planned to manipulate the stock of these companies by establishing control over both their restricted and free trading shares and coordinating the issuance of press releases with the stock promotions in order to give the false impression of market interest in the stock. As part of this conspiracy, they also agreed to engage in prearranged stock trades and to bribe purchasers to buy the stock.
In attempting to manipulate the stock of both WGE and HGRL, Minsky and Matin intended to generate approximately $9 million in illegal proceeds for themselves and their co-conspirators, and to cause corresponding losses to the conspiracy’s victims. With respect to HGRL, Hackley intended to generate approximately $4 million in illegal proceeds.
Minsky, Matin, and Hackley were charged by separate Informations, each charging conspiracy, wire fraud, and securities fraud. Minsky pleaded guilty on May 2, 2019, Hackley on May 15, 2019, and Matin on October 10, 2019.
“Innocent individuals who try to legitimately invest and save money for the future are the ones who lose big when greedy fraudsters like Minsky, Matin and Hackley manipulate the markets with pump and dump stock schemes,” said First Assistant U.S. Attorney Williams. “Market manipulation also causes our economy to take a hit because the public cannot trust that the markets are free and fair. Thanks to the excellent work of the FBI, SEC, and prosecutors from this Office, these defendants’ days of profiting off of others’ misfortune are over.”
The case is being investigated by the Federal Bureau of Investigation, with the assistance of the Securities and Exchange Commission. It is being prosecuted by Assistant United States Attorney Patrick J. Murray.