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Press Release

Vancouver Man to Plead Guilty to Securities Fraud Conspiracy

For Immediate Release
U.S. Attorney's Office, District of Massachusetts
Defendant allegedly conspired to facilitate pump-and-dumps of microcap securities using nominee entities under his control

BOSTON – A British Columbia resident has agreed to plead guilty to facilitating pump-and-dump securities fraud schemes by using nominee entities to conceal the common ownership of shares of microcap securities, also known as “penny stocks,” that he then sold on behalf of other conspirators.

Steve M. Bajic, 53, has agreed to plead guilty to one count of conspiracy to commit securities fraud. A plea hearing has not yet been scheduled by the Court. 

According to the charging documents, Bajic and his co-conspirators owned and/or controlled foreign corporations that they used to conceal the common ownership of shares of various publicly traded microcap companies. It is alleged that Bajic and his co-conspirators used these nominee entities to hold shares in blocks of just under five percent of the underlying companies’ total outstanding shares, in order to conceal from transfer agents and the investing public that the shares were under common control and subject to sale restrictions under the federal securities laws. Bajic and his co-conspirators then allegedly sold the shares at the control persons’ direction during promotional campaigns intended to create investor demand for the shares (conduct known as a “pump-and-dump”). Bajic and his co-conspirators also allegedly distributed the illicit proceeds for the control persons’ benefit while keeping commissions for themselves. In total, Bajic and his co-conspirators are alleged to have facilitated the sale of the securities of dozens of microcap companies for trading proceeds in the tens of millions of dollars, including over $6 million generated from the sale of shares of the company Blake Insomnia Therapeutics, Inc. (ticker symbol BKIT).

The charge of conspiracy to commit securities fraud provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

Acting United States Attorney Joshua S. Levy and  Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement. Assistant U.S. Attorney James R. Drabick of the Securities, Financial & Cyber Fraud Unit is prosecuting the case.

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Updated November 29, 2023

Securities, Commodities, & Investment Fraud