TaxConnections


 

SEC Obtains $58 Million Judgment Against Perpetrator of International Pump-and-Dump Scheme Involving Marley Coffee



William Byrnes, Tax Advisor

The Securities and Exchange Commission obtained a $58 million judgment against a UK and Canadian resident charged with perpetrating a multi million-dollar, international pump-and-dump scheme involving the stock of Jammin’ Java Corp., a company that used trademarks of the late reggae artist Bob Marley to sell coffee products.

The final judgment against Wayne Weaver, entered on October 2, 2017, permanently enjoins Weaver from violating Section 5 of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder; permanently bars Weaver from participating in penny stock offerings; and orders Weaver to pay disgorgement of $26,371,585, prejudgment interest of $5,221,809, and a civil penalty of $26,371,585, for a total of $57,964,979. On September 15, 2017, Weaver filed a notice of appeal.

The SEC previously obtained consent judgments against all other defendants named in the action, ordering the payment of more than $8 million in disgorgement, interest, and penalties. The judgments, entered from July 2016 to May 2017, permanently enjoin:

  • Jammin’ Java, Shane Whittle, Stephen Wheatley, Michael Sun, Kevin Miller, Mohammed Al-Barwani, and Rene Berlinger from violating Section 5 of the Securities Act;
  • Alexander Hunter (now known as John Alexander) and Thomas Hunter from violating Section 17(a) of the Securities Act;
  • Whittle, Alexander Hunter, and Thomas Hunter from violating Section 10(b) of the Exchange Act and Rule 10b-5;
  • Whittle and Sun from violating Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2; and
  • Whittle from violating Section 16(a) of the Exchange Act and Rule 16a-3.

The judgments also order:

  • Jammin’ Java to pay $605,331 in disgorgement, together with $94,669 in prejudgment interest, for a total of $700,000;
  • Whittle to pay disgorgement of $1,894,669, prejudgment interest of $360,940, and a civil penalty of $250,000, for a total of $2,505,609;
  • Alexander Hunter and Thomas Hunter each to pay a civil penalty of $300,000;
  • Wheatley to pay $2,364,125 in disgorgement, together with $385,875 in prejudgment interest, for a total of $2.75 million;
  • Sun to pay disgorgement of $400,000 and prejudgment interest of $33,796;
  • Miller to pay disgorgement of $783,369 and prejudgment interest of $116,631;
  • Al-Barwani to pay disgorgement of $270,000 and prejudgment interest of $41,204; and
  • Berlinger to pay disgorgement of $47,070 and prejudgment interest of $6,692.

The judgments also bar:

  • Wheatley and Miller from participating in penny stock offerings permanently;
  • Whittle from serving as an officer or director or participating in penny stock offerings for ten years; and
  • Alexander Hunter, Thomas Hunter, Sun, Al-Barwani, and Berlinger from participating in penny stock offerings for five years.

Jammin’ Java, Shane Whittle, Alexander Hunter, Thomas Hunter, Stephen Wheatley, Michael Sun, Kevin Miller, Mohammed Al-Barwani, and Rene Berlinger each consented to entry of the judgments against them without admitting or denying the SEC’s allegations.

The SEC’s litigation was conducted by Timothy S. Leiman, Daniel J. Hayes, Robert M. Moye, and Peter Senechalle in the Chicago Regional Office. The investigation that led to the SEC’s charges was led by Paul M. G. Helms, who also assisted with the litigation.

The SEC acknowledges the assistance of the Financial Industry Regulatory Authority, the British Columbia Securities Commission, the Capital Markets Board of Turkey, the Cayman Islands Monetary Authority, the Jersey Financial Services Commission, the Mexican Comisión Nacional Bancaria y de Valores, the Ontario Securities Commission, the Republic of the Marshall Islands Banking Commission, the Swiss Financial Market Supervisory Authority, the United Kingdom Financial Conduct Authority, the Superintendencia del Mercado de Valores de Panamá, and the Financial Market Authority Liechtenstein.

Have a question? Contact William Byrnes

Your comments are welcome!

William H. Byrnes has achieved authoritative prominence with more than 20 books, treatise chapters and book supplements, 1,000 media articles, and the monthly subscriber Tax Facts Intelligence. Titles include: Lexis® Guide to FATCA Compliance, Foreign Tax and Trade Briefs, Practical Guide to U.S. Transfer Pricing, and Money Laundering, Asset Forfeiture; Recovery, and Compliance (a Global Guide). He is a principal author of the Tax Facts series. He was a Senior Manager, then Associate Director of international tax for Coopers and Lybrand, and practiced in Southern Africa, Western Europe, South East Asia, the Indian sub-continent, and the Caribbean. He has been commissioned by a number of governments on tax policy. Obtained the title of tenured law professor in 2005 at St. Thomas in Miami, and in 2008 the level of Associate Dean at Thomas Jefferson. William Byrnes pioneered online legal education in 1995, thereafter creating the first online LL.M. offered by an ABA accredited law school (International Taxation and Financial Services graduate program).

Leave a Reply

Your email address will not be published. Required fields are marked *

TaxConnections