Post by jcline on Jun 14, 2006 10:13:36 GMT -4
SEC bans Bermuda Short targets Huard, Cowen
2006-06-12 15:35 ET - Street Wire
by Mike Caswell
The U.S. Securities and Exchange Commission has permanently banned Joseph Huard, the Bermuda Short target who tried to bribe an undercover FBI agent into stuffing a fund with Vancouver-based Medinah Minerals Inc. In the same action, the SEC has banned Bruce Cowen, the right-hand man to fallen fund manager Michael Lauer.
Mr. Huard and Mr. Cowen were nabbed in Bermuda Short, the massive RCMP-FBI sting that resulted in 58 arrests on both sides of the border. Mr. Huard's Bermuda Short co-defendant was Vancouver promoter Les Price, who the jury acquitted.
Like so many in Bermuda Short, Mr. Huard was caught after he tried to do a small test trade with an undercover FBI agent, who was posing as a corrupt fund manager. In the deal, the agent bought a small amount of overpriced Medinah shares, purportedly for the non-existent fund.
Mr. Cowen was caught in a similar fashion, trying to unload overpriced shares of New Jersey-based Lighthouse Fast Ferry Inc. He and Mr. Huard both pled guilty.
Mr. Huard was sentenced to eight months of home detention and five years of probation, while Mr. Cowen received two years in jail and three years of probation.
Mr. Huard and Mr. Cowen's SEC bans prohibit them from acting as a promoter, consultant, agent or anything else connected to penny stocks. While Mr. Cowen and Mr. Huard were already banned from stocks as a condition of their probation, the SEC action makes that ban permanent.
Before Bermuda Short, Mr. Huard was one of the founders and an officer of Shamrock Partners Ltd., a Pennsylvania-based brokerage known for its former star broker, Rafi Khan, an admitted market manipulator. After his arrest, Mr. Huard changed sides, "flipped" as they say in policeman jargon, and agreed to testify for the prosecution. He was a key witness against former Shamrock president James Kelly, another Bermuda Short target. (A jury finally acquitted Mr. Kelly in November, 2004, after two trials.)
Before Bermuda Short, Mr. Cowen was a managing director of the Lancer Group, the hedge fund run by Mr. Lauer. In 2003 the SEC shut down Lancer, once purportedly worth $1-billion, alleging Mr. Lauer was manipulating some of the stocks in the fund. Lancer is now under court-ordered administration and its former manager, Mr. Lauer, is in the midst of a long civil fraud case with the SEC.
(The Lancer case has been bogged down in litigation for three years. A Florida judge recently took the extraordinary step of preventing Mr. Lauer from testifying in his own defence after he disobeyed court orders to produce Lancer documents. Among Lancer's holdings, in fact its most valuable, is Zi Corp., a money-losing Toronto Stock Exchange listing based in Alberta.)
Most, if not all, of the Bermuda Short prosecutions have wound their way through the courts, and the SEC has been systematically banning those found guilty. The most notable recent ban was handed to Mark Valentine, the former head of defunct brokerage Thomson-Kernaghan.
www.stockwatch.com/swnet/newsit/newsit_newsit.aspx?bid=B-569465-C:*SEC&symbol=*SEC&news_region=C