Penny Stock Company and Ceo Charged by SEC for Illegal Stock Offering and Insider Trading

On June 5, 2013, the Securities and Exchange Commission (SEC) charged that Laidlaw Energy Group was targeted in an SEC trading suspension involving questionable penny stocks, and also charged the CEO, Michael B. Bartoszek, who allegedly profited from selling his shares while investors were unaware of the company's financial struggles.

According to Reuters, Laidlaw Energy (Ticker Symbol: LLEG.PK) is in the development of independent power plants that generate electricity from renewable resources, with a particular emphasis on biomass power and combined heat and power projects. Laidlaw Energy is headquartered in New York, New York.

The SEC's complaint states that Laidlaw Energy Group and its CEO Michael B. Bartoszek sold more than two billion shares of Laidlaw's common stock in 35 issuances to three commonly controlled purchasers at deep discounts from the market price. Laidlaw did not register this stock offering with the SEC, and no exemptions from registration were applicable. Bartoszek knew that the purchasers were dumping the shares into the market usually within days or weeks of the purchases to make hundreds of thousands of dollars in profits. Laidlaw's $1.2 million in proceeds from these transactions was essentially the sole source of funds for the company's operations during most of its existence. The SEC suspended trading in Laidlaw stock in June 2011.

The SEC's complaint goes on to say that Bartoszek violated insider trading laws when he personally sold more than 100 million shares of Laidlaw common stock from December, 2009, to June, 2011, and made more than $318,000 in profits. Bartoszek was in possession of non-public information while making these trades on the basis of his insider knowledge about Laidlaw's poor financial condition, the illegal "fire sale" of more than 80 percent of Laidlaw's stock, and adverse developments about Laidlaw's business prospects. As a result of the volume of Bartoszek's sales and the lack of current, publicly available information about the company, these sales also violated the registration requirements of the federal securities laws.

Additionally, the SEC alleges that Laidlaw and Bartoszek made false statements about the ownership of Laidlaw shares in SEC filings to register certain common stock following the trading suspension. Laidlaw and Bartoszek misled investors to believe that the purchasers of the two billion unregistered shares had acquired them to hold as an investment in the company. The filings falsely represented that these purchasers were the current "beneficial owner" of more than 80 percent of Laidlaw's common stock, an assertion that only could have been true if the purchasers had not sold any of their Laidlaw stock. In fact, as Laidlaw and Bartoszek knew, the purchasers had long ago dumped all of the stock.

If you have experienced a financial loss due to a Laidlaw Energy, call Soreide Law Group for a free consultation with an attorney on how to potentially recovery your investment at: 888-760-6552.