The U.S. Securities and Exchange Commission has filed a lawsuit against Spokane-based International Broadcasting Corp., its former president and a former agent, alleging fraud.
According to two complaints filed last week in U.S. District Court in Spokane, then-IBC President Daryn Fleming and agent Mathew Bruce made false statements on broadcasts of the company’s Internet radio show, “Stock Talk Live,” in October and November 2005. Their claims that IBC had purchased or become affiliated with three Florida radio stations boosted the price of IBC stock 50 percent after the first report and 60 percent after the second.
They also filed false statements with the SEC regarding the nonexistent agreements with the radio stations, according to the complaints.
Fleming sold “large quantities” of IBC stock between Oct. 28, 2005, the date of the first broadcast, and Jan. 13, 2006, the date of the SEC filing, the agency alleges.
When SEC investigators interviewed Bruce, who lives in Bradenton, Fla., about his statements, his response was: “I did what they call PR. It’s done all the time in the radio business.”
The agency is asking the court to permanently bar Fleming and Bruce from further misconduct and to impose civil penalties on both. Fleming, the complaint continues, should be ordered to return ill-gotten gains from his stock transactions.
Peter Chan, the SEC’s Chicago-based assistant regional director, declined to specify what penalties Fleming and Bruce might face or how much Fleming pocketed from his sales of IBC stock.
Fleming lives in British Columbia, Chan said, but his assets in the United States can be seized. Agreements between the U.S. and Canada will allow the SEC to pursue recovery there.
“We’re not alleging any violations by anyone currently with the company,” Chan said, adding that IBC has already agreed not to repeat Fleming’s actions.
In a release issued in August, current President Darrell Nether said IBC has had no communication with Fleming after his resignation in 2006.
The SEC complaint says Fleming now operates another stock-talk program, “Wall Street West.”
Neither Fleming nor Bruce could be reached for comment Tuesday.
In December, IBC executed a reverse merger with Copper King Mining Corp., taking the Salt Lake City company public in the process. IBC has become a private company that continues to own “Stock Talk Live” and another business.