SEC Sues Men Allegedly Behind $100 Million N.J. Deli
27 September 2022 - 4:53AM
Dow Jones News
By Will Feuer
The U.S. Securities and Exchange Commission sued three men with
ties to the company once known as Hometown International Inc. for
allegedly perpetrating fraudulent and manipulative stock-trading
schemes.
James T. Patten, Peter Coker, Sr., and Peter Coker, Jr., all
were previously connected to Hometown International, which has
since merged with bioplastics company Makamer Holdings Inc.
Hometown International garnered intense scrutiny last year after
hedge-fund manager David Einhorn flagged the company's curiously
high market valuation in a letter to his investors. Hometown
International was the parent company of a single deli in Paulsboro,
N.J., that had around $35,000 in combined sales over the prior two
years.
The SEC alleges that since 2014, the three men have sought to
inflate the stock price of the company through a series of
so-called matched and wash trades, and to sell their shares at
artificially high prices.
According to the SEC's complaint, the three men would buy shares
of the company, artificially inflate the price through manipulative
trading and use the company to buy privately-held business in
reverse mergers only to then sell their shares at inflated prices.
Beyond Hometown International, the three men perpetrated a similar
scheme with a separate shell company called E-Waste Corp., the SEC
alleges.
"We allege that the defendants' brazen schemes resulted in the
artificial inflation of the stock price of two publicly traded
companies with little to no annual revenues," said Scott Thompson,
the SEC's associate director of enforcement in the Philadelphia
Regional Office.
The SEC's complaint, filed in the U.S. District Court for the
District of New Jersey, charges all three defendants with
violations of the antifraud provisions of the securities laws. The
complaint also charges Mr. Patten with violating market
manipulation provisions of the securities laws and charges Mr.
Coker Sr. and Mr. Coker Jr. with aiding and abetting those
violations.
In a parallel action, the U.S. Attorney's Office for the
District of New Jersey announced criminal charges against the three
defendants, as well.
Write to Will Feuer at Will.Feuer@wsj.com
(END) Dow Jones Newswires
September 26, 2022 14:38 ET (18:38 GMT)
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