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Stock Manipulation Scheme Unraveled: CEO Sentenced to 9 Months in Prison
BOSTON – In a significant blow to the world of penny stocks, Learned Jeremiah Hand, 59, of Durham, N.C., has been sentenced to nine months in prison for his role in a sophisticated stock manipulation scheme.
Hand, the CEO of Crown Marketing, a microcap company claiming to own valuable patented drug delivery technology, conspired with his brothers to manipulate the market for the company’s publicly traded stock. The scheme involved a pump-and-dump strategy, where the brothers concealed their control over the majority of Crown’s free-trading stock, artificially inflating the share price, and then secretly sold their shares to unwitting investors.
The Hand brothers, including Jehu Hand, 61, who was convicted by a federal jury of conspiracy, securities fraud, and wire fraud, and Adam Hand, 53, of Newport Beach, Calif., who pleaded guilty to conspiracy to commit securities fraud, engaged in a complex web of deceit to deceive investors and reap millions of dollars in profits.
As part of the scheme, Jehu Hand filed false registration statements with the Securities and Exchange Commission (SEC), allowing the co-conspirators to sell their shares to the public. Meanwhile, Learned Hand orchestrated a press campaign, distributing press releases containing false and misleading statements regarding the drug delivery technology purportedly owned by Crown.
The scheme was uncovered by the Federal Bureau of Investigation, Boston Field Division, with valuable assistance from the Securities & Exchange Commission and Financial Industry Regulatory Authority. United States Attorney Andrew E. Lelling and Harold H. Shaw made the announcement today.
The United States Attorney’s Office received assistance from the Securities & Exchange Commission and Financial Industry Regulatory Authority during the investigation. Assistant U.S. Attorney Jamie Herbert of Lelling’s Criminal Division and SEC Attorney Andrew Palid prosecuted the case.
Learned Hand will serve one year of supervised release following his prison sentence, and restitution will be determined at a later date. His brother, Adam Hand, was sentenced to 30 months in prison and three years of supervised release for his role in the scheme.
Key Facts
- State: Massachusetts
- Category: Financial Crimes
- Source: DOJ Press Release â†â€â€
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