UK Broker-Dealer Snagged In Undercover FBI Probe

Josh O'Neill

6 March 2018

Wall Street’s main watchdog has charged a UK-based broker-dealer Beaufort Securities and its investment manager with manipulating trades of shares in HD View 360, a US microcap issuer.

The Securities and Exchange Commission also charged HD View’s chief executive, another individual and three entities they control for manipulating HD View’s securities and shares in West Coast Ventures, another microcap issuer.

The charges stemmed, in part, from an undercover operation by the Federal Bureau of Investigation , the SEC said. The regulator alleged that Peter Kyriacou, an investment manager at Beaufort, manipulated the market for HD View’s common stock.

“The scheme involved an undercover FBI agent who described his business as manipulating US stocks through pump-and-dump schemes,” the SEC said. “Kyriacou and the agent discussed depositing large blocks of microcap stock in Beaufort accounts, driving up the price of the stock through promotions, manipulating the stock’s price and volume through matched trades, and then selling the shares for a large profit.”

A second complaint filed by the regulator describes how HD View chief executives Dennis Mancino and William Hirschy in a phone call with the undercover FBI agent agreed to manipulate their firm’s common stock by fraudulently creating retail demand through the agent’s network of brokers.

According to the complaint, the trio agreed that Mancino and Hirschy would manipulate HD View stock to a higher price before using the agent’s brokers to liquidate their positions at an artificially-inflated price. The SEC’s complaint also alleges that Mancino and Hirschy executed a “test trade” on 31 January, 2018, coordinated by the agent, consisting of a sell order placed by the defendants filled by an opposing purchase order placed by a broker into an account at Beaufort.

“We allege that Kyriacou engaged in a scheme to manipulate the market of HD View stock by matching trades to create a false appearance of liquidity for unwitting investors,” said Marc Berger, regional director of the SEC’s New York office. “The SEC and its law enforcement partners will continue to aggressively work together to root out such manipulation, wherever the alleged perpetrators and their brokerage firms reside, and despite their best efforts to conceal and disguise their methods."