Reuters reports that the office was supposed to belong to a corrupt hedge fund representative looking for kickbacks from small companies in which the fund would invest. But the scam was actually on the companies themselves. The office, set up in a suburb of Boston, turned out to be that of an undercover agent for the Federal Bureau of Investigation.
On Thursday the FBI, the Justice Department and the Securities and Exchange Commission brought charges against 13 individuals they said they caught using kickbacks in the loosely regulated world of microcap stocks. The SEC also suspended trading in seven companies whose executives it said were involved in the matter.
The charges were the latest to involve thinly traded securities and arose from stings similar those employed last year in South Florida. They come as regulators in Washington weigh whether to loosen controls on small-company stocks. According to a filing in U.S. District Court in Boston the undercover agent pretended to represent "a major hedge fund," though it was not clear if the agent ever identified an actual fund by name.….
Find out more at http://www.reuters.com/article/2011/12/01/microcap-fraud-idUSN1E7B00YV20111201
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