Java executives sued by SEC for Bob Marley pump-and-dump scheme
U.S. regulators sued a group of alleged penny stock manipulators in a $78 million scheme where they hijacked a small coffee company formed by Bob Marley’s son to reap profits from the name and trademarks of the late reggae singer.
Former Jammin’ Java Chief Executive Officer Shane Whittle went into business with Marley’s son Rohan Marley, who created the coffee company, and then orchestrated the fraud by promoting its stock to inflate the share price before dumping it on unsuspecting investors, according to a statement Tuesday from the U.S. Securities and Exchange Commission. The business was built on the name of Rohan’s father, the famed reggae musician who died in the 1980s. Whittle used offshore entities to promote the shares, while using a reverse merger to conceal his ownership of Jammin’ stock.
“The defendants made millions of dollars in illicit profits at the expense of the investing public and attempted to conceal their misconduct through complex offshore networks that were revealed in our investigation,” said David Glockner, head of the SEC’s Chicago office.
The Wall Street regulator has been working to stamp out manipulation in the prices of shares that can trade as low as fractions of a penny. The SEC announced in July 2013 a task force to go after serial offenders and gatekeepers, such as attorneys, broker-dealers and stock promoters.
The Jammin’ scam started in 2005 when Whittle met Rohan in Los Angeles, according to the SEC complaint. After learning that Rohan had bought a small Jamaican coffee farm, Whittle proposed to start a large-scale coffee production business built on Bob Marley’s name. Rohan’s involvement in the management of the business was minimal, the complaint said. In 2008, Whittle entered into a reverse merger with a purported waste management company and changed its name to Marley Coffee, under ticker symbol JAMN. While secretly controlling millions of shares, Whittle used a group of promoters to increase the stock price by sending blast emails and posting on investor message boards.
The regulator is seeking penny stock bars from all of the individuals as well as penalties and disgorgement. The SEC is also seeking an officer and director bar against Whittle. The SEC sued seven others tied to the scam, including twin brothers Alexander and Thomas Hunter. The regulator previously sued the two U.K. citizens in April 2012 for defrauding 75,000 investors in which they touted a “stock picking robot.”
Rod Anderson, an attorney for Whittle, and Eric Bruce, an attorney for the Hunter brothers, didn’t immediately return messages seeking comment.
© 2015, Bloomberg News
You may be interested
High culture, low canvas in Costa RicaKatherine Stanley - March 19, 2018
One of the favorite attractions for the crowds that flocked to this weekend's Transitarte festival in San José was the…
Poll: Fabricio Alvarado holds slight lead in Costa RicaAFP - March 19, 2018
The evangelical preacher and former legislator Fabricio Alvarado has a slight advantage over former Labor Minister Carlos Alvarado in one…
PHOTOS: Transitarte brings art, music to sunny San José streetsKatherine Stanley - March 19, 2018
This year's Transitarte festival brought josefinos to the parks and streets of the east-central section of Costa Rica's capital city…