A Bahamian broker/dealer has slammed US regulators for “contradicting themselves” over whether it should have uncovered an alleged $11.834 million ‘illegal unregistered share offering’.
In their latest barb trading with the Securities & Exchange Commission (SEC), Gibraltar Global Securities and its principal, Warren Davis, said the regulator’s position in the case filed against them in the southern New York district court “flies squarely in the face” of the stance it took in Florida two years ago.
In their latest filing, Gibraltar and Mr Davis noted that the SEC previously described the offering of 10 million shares in Magnum d’Or, a small, thinly-traded company, as being so well designed that the wrongdoing was almost impossible to detect.
Yet, they alleged, the SEC’s New York lawsuit was now alleging that the scheme was “so obvious” that Mr Davis and Gibraltar had to know what was happening.
Responding to the SEC’s attempt to rebuff their efforts to have the case against them dismissed, Gibraltar and Mr Davis said the regulator was “missing a critical piece” of evidence to prove they violated US law.
This was the SEC’s inability to prove that Gibraltar solicited a single US customer via its website, which has now been shutdown as the Bahamian broker/dealer completes the winding-up of its business.
While the original SEC complaint alleged that they had operated “unlawfully” in the US by selling $100 million worth of stocks, Gibraltar and Mr Davis argued that the regulator was using “unreliable” analysers of traffic to their former website to prove American clients were solicited via this means.
Referring to a second SEC-initiated lawsuit in which Gibraltar and Mr Davis have also been named as defendants, the duo said both cases collectively involved ‘pump and dump’ schemes covering $15 million worth of shares – some 15 per cent of the alleged US transactions it was said to have facilitated.