New York securities lawyer is accused of stock manipulation
A Manhattan securities lawyer is among three people arrested on Wednesday in an expanding probe of a $300 million scheme to manipulate the prices of penny stocks.
The lawyer, 46-year-old Darren Ofsink, was accused along with two investment advisers of using press releases, false filings with the Securities and Exchange Commission, and manipulated trading activity to defraud the securities markets and the investing public, report the New York Law Journal (sub. req.), BloombergBusiness and an FBI press release.
The scheme caused the value of four traded companies to surge as high as $300 million, though the corporations had virtually no assets or business activity, according to prosecutors. When prices reached acceptably high levels, the defendants sold their stock in the companies, prosecutors say.
Ofsink is accused of manipulating the stock of CodeSmart Holdings, which merged with a shell company in 2013 and became public.
One of the defendants already charged in the alleged scheme is Abraxas Discala, an investment adviser who was once married to Jamie-Lynn Sigler, an actress on The Sopranos. Another previously charged defendant is Las Vegas corporate lawyer Kyleen Cane, accused of playing a role in inflating the stock price of a company called Cubed.
Ofsink’s lawyer, Christopher Bruno, told BloombergBusiness and the New York Law Journal that he and his client were “extremely disappointed by the government’s determination to file charges” against Ofsink, who “looks forward to trying this case.”
