CONTROLLING PRINCIPAL OF FIRST PUBLIC SECURITIES TRANSFER CORP. PLEADS GUILTY TO CONSPIRACY TO MANIPULATE MICROCAP STOCKS
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (“FBI”), Miami Field Office, announce that defendant Tzemach David Netzer Korem, 57, of Los Altos, CA (aka a/k/a David Korman, David Netzer Korem Tzemach, David Korem, Mark Pedley, Mark Wellington, Mark Logan Wellington and Jack Williams) pled guilty today before U.S. District Court Judge Ursula Ungaro to one count of conspiracy to commit securities fraud in connection with a scheme to defraud the investing public by manipulating the quoted share price and volume of stock issued by ZNext Mining Corp., Inc., a publicly traded company. Sentencing has been scheduled for February 4, 2011. At sentencing, the defendant faces a statutory maximum sentence of 5 years in prison.
On October 29, 2010, co-defendant Jean “Richard” Charbit, 65, of Miami, pled guilty to one count of conspiracy to commit securities fraud in connection with the same manipulation scheme.
According to the court documents, Korem and Charbit attempted to pay illegal inducement payments to a stock broker to get the stock broker to misuse client accounts to buy worthless or overvalued shares of stock. In this way, Korem and Charbit artificially raised demand for the stock, allowing the stock holders to dump their holdings into the market at inflated prices.
U.S. Attorney Wifredo A. Ferrer stated, “Although no investment is risk free, all investments should be free of fraud and manipulation. Mr. Korem abused the public’s trust by manipulating the market for his personal benefit. Such manipulation is illegal, unethical, and will not be tolerated.”
John V. Gillies, Special Agent in Charge of the FBI’s Miami Office, stated, “We will not tolerate people who take advantage of unsuspecting investors by illegally influencing financial markets. Mr Korem, who engaged in this type of behavior, will now have to face the consequences.”
Mr. Ferrer commended the investigative efforts of the FBI and the cooperative efforts of the Miami Regional Office of the Securities and Exchange Commission. This case is being prosecuted by Assistant U.S. Attorney Ryan Dwight O’Quinn.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.