A small North Idaho mining company and a former executive have settled a series of stock fraud allegations brought by the U.S. Securities and Exchange Commission.
Federal investigators accused penny stock firm Atlas Mining Co. and former chairman and chief executive William Jacobson of filing false financial documents and hiding bogus stock sales in order to raise money for the struggling business.
Atlas Mining Co., which changed its name to Applied Minerals Inc. this fall and moved its headquarters from the Silver Valley town of Osburn to New York, said the settlement frees the company from a troubled chapter in its recent past and gives new management a chance to operate its contract mining business.
Jacobson, fined $50,000 and barred from serving in a leadership role of a publicly traded company or participating in any penny stock offering for five years, now lives in Missoula. He could not be reached for comment.
Neither the company nor Jacobson admitted or denied the allegation.
From 2002 to 2005 “Jacobson tried to keep Atlas Mining afloat by orchestrating illegal stock schemes, and then fabricated documents and made false statements in the company’s public filings to cover his tracks,” said Marc Fagel, the SEC’s regional director in San Francisco.
SEC attorney Cameron Hoffman said the actions harmed investors by withholding accurate financial information.
In a news release, Atlas said it undertook “significant remedial efforts” when it learned of Jacobson’s actions. Those efforts included turning over its internal investigation to the SEC; replacing all members of management; changing the makeup of its board of directors; and adopting a code of conduct and ethics.
During 2009 the firm resolved a class-action lawsuit by investors.
Subscribe to the Morning Review newsletter
Get the day’s top headlines delivered to your inbox every morning by subscribing to our newsletter.