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The former chief executive of a coffee company, built on the name of late reggae star Bob Marley, has been charged in the US with running a stock scheme that netted US$78 million in illegal trading profits.
The US Securities and Exchange Commission (SEC) filed fraud charges on Tuesday against Shane Whittle, the former CEO of Jammin' Java Corporation, a company he co-founded in Los Angeles with Rohan Marley, the late singer's son.
Marley, who is still involved with the company, was not accused of any wrongdoing.
The SEC said Whittle, helped by eight outside accomplices, illegally profited by secretly taking control of millions of shares of Jammin' Java, inflating their value and later dumping them on unsuspecting investors.
The scheme allegedly involved setting up a front company to make it appear that Jammin' Java had a financial backer and making various promotional announcements that helped boost the share price.
The alleged accomplices , none of who are affiliated with the company, are accused of various promotional activities, including publishing false stock reports and facilitating illegal stock transactions through offshore holding companies.
The company was founded in 2008.The alleged illegal activities occurred in 2010 and 2011.
According to public filings, in May 2011, shares of Jammin' Java, which also does business under the name Marley Coffee, surged to $6.35 cents, a price that valued the company at more than $400 million, even though its revenue the previous year was a little over $1,000.
Soon after reaching that peak, the defendants sold the shares, which later nose-dived to less than one dollar.
The dramatic rise and fall of the share price prompted the SEC's investigation.
The company, which moved to Denver in 2013, continues to sell coffee under the Marley Coffee brand.
It lost $10.3 million last year, and $9.6 million in revenue.
The US Securities and Exchange Commission (SEC) filed fraud charges on Tuesday against Shane Whittle, the former CEO of Jammin' Java Corporation, a company he co-founded in Los Angeles with Rohan Marley, the late singer's son.
Marley, who is still involved with the company, was not accused of any wrongdoing.
The SEC said Whittle, helped by eight outside accomplices, illegally profited by secretly taking control of millions of shares of Jammin' Java, inflating their value and later dumping them on unsuspecting investors.
The scheme allegedly involved setting up a front company to make it appear that Jammin' Java had a financial backer and making various promotional announcements that helped boost the share price.
The alleged accomplices , none of who are affiliated with the company, are accused of various promotional activities, including publishing false stock reports and facilitating illegal stock transactions through offshore holding companies.
The company was founded in 2008.The alleged illegal activities occurred in 2010 and 2011.
According to public filings, in May 2011, shares of Jammin' Java, which also does business under the name Marley Coffee, surged to $6.35 cents, a price that valued the company at more than $400 million, even though its revenue the previous year was a little over $1,000.
Soon after reaching that peak, the defendants sold the shares, which later nose-dived to less than one dollar.
The dramatic rise and fall of the share price prompted the SEC's investigation.
The company, which moved to Denver in 2013, continues to sell coffee under the Marley Coffee brand.
It lost $10.3 million last year, and $9.6 million in revenue.
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