SECRET STOCK MANIPULATION NETS $33 MILLION IN SHAM SCHEME!

SEC v. James B. Panther, Jr., Francisco Abellan Villena, Faiyaz Dean, et al. — U.S. Securities and Exchange Commission Litigation Release No. 26253, dated February 21, 2025.

The SEC secured a final judgment against James B. Panther, Jr. for his role in a $33 million scheme to secretly control and inflate the price of Biozoom, Inc. shares. Panther aided Francisco Abellan Villena in manipulating the stock price through deceptive practices, nominee accounts, and promotional campaigns, ultimately netting millions in illegal proceeds. The court ordered Panther to pay a $100,000 civil penalty and barred him from penny stock offerings for ten years.

In Plain English

Imagine a group of people secretly bought up all the shares of a small company. Then, they pretended there was a lot of interest in the company by making fake trades and telling everyone it was a great investment. This made the stock price go way up. They then sold their shares to unsuspecting buyers at the high price, making millions of dollars. The SEC stepped in to stop this trickery and hold them accountable.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Acquire a Shell Company Francisco Abellan Villena and Guillermo Ciupiak, with help from attorney Faiyaz Dean, acquired all shares of an inactive company. Dean arranged for these shares to be placed in the names of Argentine nationals who had no real interest in them, hiding the true owners' control.
2. Conceal Share Ownership Dean falsified transaction documents to hide the fact that the acquired shares could not be immediately resold to the public. This created a false appearance of legitimate share availability.
3. Create Biozoom, Inc. Abellan and Ciupiak effectively merged a subsidiary of the shell company with a German biomedical company, resulting in the creation of Biozoom, Inc. Their previously acquired shares in the shell company now represented ownership in Biozoom.
4. Deposit Shares into Nominee Accounts Panther and Dean arranged for the Biozoom shares to be deposited into brokerage accounts held in the names of the Argentine Nominees. These accounts were used to facilitate the eventual sales of the manipulated stock.
5. Manipulate Share Price Starting May 16, 2013, Abellan, Ciupiak, and Panther engaged in 'laddering' trades, buying Biozoom stock at ever-increasing prices among nominees and traders to artificially inflate its price. This created the false appearance of active trading and rising demand.
6. Coordinate Trading and Sales While artificially propping up the stock price, Abellan, Ciupiak, and Panther simultaneously caused millions of Biozoom shares to be illegally sold into the market from the nominee accounts.
7. Launch Promotional Campaign To further drive up demand and the stock price, the defendants organized an extensive online, print, and radio promotional campaign that coincided with their manipulative trading activities.
8. Achieve Peak Price and Sell The stock price, which started at a pegged $1.10 per share, peaked at $4.50 per share on June 19, 2013. The defendants then sold their shares to retail investors at these artificially inflated prices.
9. Generate Illicit Proceeds The entire scheme culminated in the defendants' illegal sales of Biozoom stock, which netted over $33 million in unlawful proceeds from unsuspecting investors.

The Enforcement Action

On January 24, 2025, the U.S. District Court for the Southern District of New York granted the SEC’s motion for summary judgment and ordered final judgment against James B. Panther, Jr. for his role in a fraudulent scheme to secretly control and inflate the price of shares of Biozoom, Inc. Panther was permanently enjoined from violations of antifraud and registration provisions, ordered to pay a $100,000 civil penalty, and received a ten-year penny stock bar. The SEC previously obtained default judgments against Faiyaz Dean ($160,000 civil penalty) and Francisco Abellan Villena ($15 million civil penalty, permanent injunctions). A final judgment was also obtained against Guillermo Ciupak, including permanent injunctions. In a prior 2013 action, the SEC froze proceeds from unlawful Biozoom sales and established a fair fund that returned over $16 million to harmed investors.

Named in this action: James B. Panther, Jr., Francisco Abellan Villena, Faiyaz Dean, Guillermo Ciupak.

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