This brand new New York bribery case is an important lesson to all you wannabe stock promoters out there:

(if you want to see the details of the stock manipulation, I suggest you read this rather long but illuminating SEC complaint)

(and teaches you future TIMalert subscribers and PennyStocking DVD students that yes there is blatant penny stock manipulation and yes, it is predictable and yes, it is legal to profit from stocks that are manipulated):

Manhattan Stock Promoter Pleads Guilty in Stockbroker Bribery Case

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that SHAY KEREN, 39, of New City, New York, pleaded guilty yesterday in Manhattan federal court to participating in a conspiracy to bribe stockbrokers. According to the Information filed in this case and statements made during the guilty plea proceeding before United States District Judge BARBARA S. JONES:

KEREN, also known as David Schmidt, was a principal of Manhattan-based Onyx Consulting Group. KEREN, together with fellow Onyx Consulting principals GLENN GROSSMAN and STEVEN COHEN, schemed from March through September 2008 to defraud investors in Guyana Gold Corporation (”Guyana Gold”) by paying secret cash bribes to an undercover FBI agent posing as a middleman for the transactions. As part of the sting operation, the undercover agent agreed to recruit stockbrokers who were prepared to buy Guyana Gold common stock from KEREN and his partners and to sell the stock to the brokerage firm’s retail customers. In exchange, the stockbrokers and undercover agent posing as the middle man were to receive secret, cash payments for their roles in the deal respectively totaling approximately 23 and 7 percent of the value of the stock sold to customers. From May through August 2008, KEREN and his co-conspirators paid the undercover agent and the purported “stockbrokers” whom the agent had purportedly recruited, bribes totaling approximately $21,800. The bribes represented 30 percent of the nearly $75,000 worth of Guyana Gold stock the recruited “stockbrokers” had purchased in trades.

GROSSMAN and COHEN previously pleaded guilty to conspiring to bribe stockbrokers. GROSSMAN was sentenced on July 20, 2009, to 12 months and one day in prison; COHEN awaits sentencing.

KEREN faces a maximum of 5 years in prison and a fine of the greater of $250,000 or twice the gross gain or loss from the offense.

Mr. BHARARA praised the work of the FBI, the Vancouver Integrated Market Enforcement Team of the Royal Canadian Mounted Police, the Vancouver Police Department, the Criminal Prosecution Assistance Group of Financial Industry Regulatory Authority, and the United States Securities and Exchange Commission for their assistance in the investigation.

Assistant United States Attorney RAY LOHIER is in charge of the prosecution.

Tags: Penny Stock Manipulation, Penny Stock Promoters Are Idiots, Penny Stocks Are Corrupt, SEC Busts Stock Promoters, Stock Bribery Case