Skip to main content
Press Release

Woburn Promoter Charged in Stock Price Manipulation Scheme

For Immediate Release
U.S. Attorney's Office, District of Massachusetts

BOSTON – A stock promoter from Woburn was charged today in U.S. District Court in Boston with securities fraud in connection with his participation in a scheme to manipulate the market for the publicly traded stock of a microcap company.

Louis Buonocore, 60, was charged with conspiracy and securities fraud based on his involvement in the manipulation of the stock of YaFarm Technologies, Inc. (YaFarm), a penny stock company that claimed to be entering the stem cell therapy business.

In a parallel action, the Securities and Exchange Commission (SEC) announced securities fraud charges today against Buonocore and another individual, Frank Morelli, in connection with the scheme.

According to the Information, in late 2012, Buonocore and his co-conspirators secretly acquired majority control of YaFarm’s free-trading shares, using nominees to conceal their ownership from the SEC and others.  In early 2013, with millions of shares at their disposal, Buonocore and his co-conspirators launched a misleading promotional campaign to persuade investors that YaFarm was acquiring a successful stem cell therapy business and the new laboratory it was building in Cancun, Mexico.  In reality, YaFarm had no meaningful operations, the institution being acquired was still in development, and it lacked the funds needed to build the laboratory.  As a result of the hype created by the misleading press releases, Buonocore and his co-conspirators were able to sell their YaFarm stock to unwitting investors at artificially high prices.

These charges arise out of a multi-year investigation focusing on preventing fraud in the microcap stock markets.  Microcap companies are small publicly traded companies whose stock often trades at pennies per share.  Fraud in the microcap markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse.  This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the SEC.

Today’s charges follow a series of cases filed by the SEC and the U.S. Attorney for the District of Massachusetts in which more than 20 individuals have been criminally charged and convicted for using kickbacks and other schemes to trigger investment in, or manipulate the stock of, thinly-traded stocks.

The charge of securities fraud provides a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $5 million.  The conspiracy charge provides a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000, or twice the gross loss to the victim.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Ortiz and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  The criminal case is being prosecuted by Assistant U.S. Attorney Eric Christofferson of Ortiz’s Economic Crimes Unit and SEC Attorney Andrew Palid, who was appointed as a Special Assistant U.S. Attorney.

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

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

Updated January 8, 2018

Securities, Commodities, & Investment Fraud