Sidoo named in securities fraud lawsuit in New York
Vancouver businessman David Sidoo has been named by the U.S. Securities and Exchange Commission in an alleged far-reaching pump-and-dump securities fraud suit filed in New York.
Two years ago Sidoo was fined US$250,000 and served 90 days in jail after admitting he participated in a vast cheating scheme to help his sons get into U.S. universities.
Sidoo is named along with seven others in a civil complaint that describes a series of highly profitable “pump-and-dump” stock transactions in 17 publicly traded companies from 2006 to 2020.
He has not been charged and the allegations have not been proven in court.
The suit centres on allegations of manipulation of stock and misleading promotions to reel in unsuspecting investors, creating estimated gains of US$145 million at the behest of London-based accused ringleader Ronald Bauer, who describes himself as a dynamic venture capitalist.
“Bauer oversaw nearly every aspect of the scheme and most frequently called upon the other defendants to, among other things, acquire control of the issuer, arrange for the issuance of shares, and conduct promotional activity,” according to investigators who coined the moniker “Bauer Ring” for the most prolific group.
Investigators allege Sidoo was part of a secondary group dubbed “Sidoo and Bauer Ring Coalition.” Along with Bauer and Sidoo, the others named are Craig James Auringer, Alon Friedlander, Massimilano Pozzoni, Daniel Mark Ferris, Petar Dmitrov Mihaylov, and Adam Christopher Kambeitz.
The defendants are named in a handful of securities violations.
The documents track alleged ventures and “bogus documentation” in everything from oil and gas and pharmaceuticals, to heavy metals and software companies that typically used Swiss offshore financial firms.
The suit names Sidoo as the beneficiary of stock sales who “failed both to disclose his beneficial ownership and trading and to register his stock sales as legally required.”
“Through such means, defendants hid their co-ordinated efforts from gatekeepers (transfer agents and brokers) who otherwise would have treated their shares as restricted stock, which could not have been freely purchased, sold or transferred in the retail market,” the suit alleges.
“Defendants also flouted their affirmative obligations under the federal securities laws, as controlling shareholders, to report their holdings, trading, and agreements as to the same, and, by so doing, hid their co-ordinated efforts from investors.”
The securities commission is seeking civil penalties and injunctions against the defendants participating in any penny stock offerings — and repayment of alleged “ill-gotten gains.”
Sidoo's Boston-based lawyer Martin Weinberg did not return a message requesting comment, but told Business in Vancouver that Sidoo denies the allegations.
Sidoo, a prominent University of B.C. alumnus and former Canadian Football League player, was previously sentenced to 90 days behind bars for paying US$200,000 to have someone secretly take the SAT college entrance exam in place of his two sons, who were later admitted to California universities.