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by Mike Caswell

The U.S. Securities and Exchange Commission has won $2.12-million in penalties and a permanent ban against Michael Skerry, a New Westminster man who was behind a scalping scheme on the OTC Link. (All figures are in U.S. dollars.) The SEC said that Mr. Skerry boosted a company called Success Holdings Group International Inc. with mass e-mails and on-line postings. He realized $957,000 in gains over just five months, according to the SEC.

The penalties for Mr. Skerry are contained in a default judgment handed down on Monday, Dec. 30, in federal court in Indiana. His $2.12-million penalty includes disgorgement of his gains, plus interest, and a $957,000 fine. The judge has also permanently banned Mr. Skerry from penny stocks and has entered an injunction against future violations.

While the decision counts as a victory for the SEC, the likelihood of collecting the penalty seems remote. Mr. Skerry has mostly ignored the case. He initially filed an answer in which he denied any wrongdoing, but trouble arose when it came time for him to enter the U.S. for a pretrial deposition. He refused to attend, citing concerns that he could be arrested. (The SEC's case is civil, which means there is no possibility of jail. There is, of course, no telling what hidden criminal matter could await him.) After Mr. Skerry's failure to attend, the judge found him in default, which allowed the SEC to request penalties without a trial.

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