A microscopic mining company called CMKM Diamonds Inc., which was trading under a penny, has been accused of a $64 million penny stock fraud. The allegations are that the company issued hundreds of billions of shares illegally, leaving 40,000 investors nationwide without their money.
With assistance from a transfer agent and an attorney, allegedly CMKM fraudulently issued hundreds of billions of shares of purportedly unrestricted stock to John Edwards and his nominees, as well as to the nominees of Urban Casavant, the company's chief executive officer.
The SEC complaint charges CMKM, a broker dealer and transfer agent, as well as 11 individuals, including Casavant.
In its complaint, the commission identifies John Edwards as the brains behind the fraud. It is believed that Edwards and others pumped their unregistered stock into the public markets. According to the SEC, Edwards pocketed $26.4 million from sales through a single brokerage firm and that Casavant received about $31.5 million.
The SEC's investigation is continuing.
SECURITIES AND EXCHANGE COMMISSIONwww.cmkmdiamondsinc.com