Leader of A Stock Manipulation Ring Now Pleads Guilty

November 4, 2024

The leader of a stock manipulation ring now pleads guilty of committing securities fraud in connection with his role in a long-running “pump-and-dump” schemes.

Damian Williams, the U.S. Attorney for the Southern District of New York, announced that Ronald Bauer has pleaded guilty to conspiring to commit securities fraud as part of a long-running “pump-and-dump” stock manipulation scheme.

Bauer entered his plea before U.S. District Judge Paul A. Engelmayer and is set to be sentenced on May 20, 2025.

U.S. Attorney Williams stated that Bauer orchestrated a vast scheme that exploited U.S. markets, targeting retail investors and profiting immensely at their expense.

He emphasized that this guilty plea sends a strong message about the commitment to hold market manipulators accountable, regardless of their efforts to hide their actions.

Bauer, a Canadian and British citizen living in the UK, had previously faced securities fraud claims from the SEC in 2005.

He was accused of manipulating the market by issuing misleading press releases while secretly offloading millions of shares into the inflated market he helped create.

In 2006, he settled those allegations without admitting wrongdoing, agreeing to a judgment that barred him from serving as an officer or director of a public company for five years and required him to pay $840,000 in disgorgement.

In his guilty plea, Bauer admitted to participating in a conspiracy involving seven companies, including Cantabio Pharmaceuticals and Cyberfort Software.

He and his co-conspirators acquired significant portions of unrestricted stock in these companies and concealed their ownership through nominee entities established by a Swiss corporation, Blacklight, S.A.

They retained control over trading activities and influenced the management of these companies during the scheme.

Bauer and his associates also engaged in “match trades” and financed promotional campaigns to boost interest in the stocks without disclosing their controlling interests or intentions to sell shares.

Following these campaigns, they sold large portions of their holdings and funneled the proceeds back to themselves.

At 49 years old and residing in London, Bauer pleaded guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years.

A money judgment of $4,377,228.74 was also entered against him as part of the plea agreement.

The case has been managed by the Office’s Securities and Commodities Fraud Task Force, with Assistant U.S. Attorneys overseeing the prosecution.

Williams praised the FBI’s efforts and acknowledged the contributions of the Justice Department, the Crown Prosecution Service in the UK, and the SEC, which has initiated separate civil proceedings against Bauer.

For more Regulatory News and updates like this, join the newsletter or opt-in for push notifications.

Also Read: TD Bank Now Gets Caught With Illegal Market Manipulation