Last Friday, the SEC charged Anthony K. Welch, a former investment advisor and former resident of Oxford, Mississippi, with securities fraud for issuing a series of false and misleading press releases that allegedly were designed to artificially inflate stock prices.
Welch served as the Chairman and CEO of eHydrogen from January 2007 through August 2010, and the Chairman and CEO of ChromoCure from June 2009 through at least August 2010. The SEC alleges that prior to Welch’s assumption of control over the companies, they each had functioned largely as “shell corporations” with frequently changing names. Then, as now, they allegedly had little to no revenue or actual business operations.
Despite the allegedly defunct state of the companies, however, the SEC alleges that Welch distributed a series of press releases and other public disclosures that contained intentionally false and misleading information about the companies’ revenues and technological acquirements in order to increase stock purchases.
“From approximately March through October 2010, Welch spearheaded an internet based promotional campaign for eHydrogen and ChomoCure, pumping out a high volume of near-weekly press releases containing a wide degree of, at best, questionable assertions regarding future business operations,” alleged the Complaint. “In multiple instances such statements were intentionally false and misleading, distributed by Welch for no purpose other than to incite trading activity and artificially inflate the price and trading volume of eHydrogen and ChomoCure.”
Another company formerly controlled by Welch (Maxim Advisors, LLC) also was sanctioned for using false and misleading promotional material while under his control. The Financial Industry Regulatory Authority revoked the firm’s registration in 2004.
Welch now lives outside of the United States. The SEC is seeking a variety of injunctions and bars against him, as well as disgorgement and civil penalties. For more information, access the full SEC Complaint here.