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by Mike Caswell
The U.S. Securities and Exchange Commission has filed a civil action against a Florida man and his company for a scheme involving the unregistered sale of 7.4 billion shares in several companies. The SEC claims that Ibrahim Almagarby made $1.47-million selling the shares, which he had acquired in shares-for-debt transactions. (All figures are in U.S. dollars.) The companies that he is accused of selling include at least three with Canadian addresses.
The allegations are contained in a civil complaint that the SEC filed on Nov. 17, 2017, in the Southern District of Florida. The complaint identifies Mr. Almagarby, 27, as a resident of Tamarac, Fla. (which is about an hour north of Miami). Also a defendant is a Microcap Equity Group LLC, a private entity that Mr. Almagarby controls.
The scheme, as described in the complaint, stems from Mr. Almagarby's acquisition of aged convertible debt instruments in a group of penny stocks. According to the SEC, Mr. Almagarby acquired the instruments over a three-year period. The debt instruments were in 39 different companies, all of which were microcap issuers. He immediately converted them into tradable shares, the complaint states. This allowed him and his company to sell the shares on the market for a profit, within weeks in at least one instance, the SEC says.
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