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Manhattan Stock Promoter Pleads Guilty in Stockbroker Bribery Case
PREET BHARARA, the United States Attorney for the
Southern District of New York, announced that SHAY KEREN, 39, of
New City, New York, pleaded guilty yesterday in Manhattan federal
court to participating in a conspiracy to bribe stockbrokers.
According to the Information filed in this case and statements
made during the guilty plea proceeding before United States
District Judge BARBARA S. JONES:
KEREN, also known as David Schmidt, was a principal of
Manhattan-based Onyx Consulting Group. KEREN, together with
fellow Onyx Consulting principals GLENN GROSSMAN and STEVEN
COHEN, schemed from March through September 2008 to defraud
investors in Guyana Gold Corporation ("Guyana Gold") by paying
secret cash bribes to an undercover FBI agent posing as a
middleman for the transactions. As part of the sting operation,
the undercover agent agreed to recruit stockbrokers who were
prepared to buy Guyana Gold common stock from KEREN and his
partners and to sell the stock to the brokerage firm's retail
customers. In exchange, the stockbrokers and undercover agent
posing as the middle man were to receive secret, cash payments
for their roles in the deal respectively totaling approximately
23 and 7 percent of the value of the stock sold to customers.
From May through August 2008, KEREN and his co-conspirators paid
the undercover agent and the purported "stockbrokers" whom the
agent had purportedly recruited, bribes totaling approximately
$21,800. The bribes represented 30 percent of the nearly $75,000
worth of Guyana Gold stock the recruited "stockbrokers" had
purchased in trades.
GROSSMAN and COHEN previously pleaded guilty to
conspiring to bribe stockbrokers. GROSSMAN was sentenced on July
20, 2009, to 12 months and one day in prison; COHEN awaits
sentencing.
KEREN faces a maximum of 5 years in prison and a fine
of the greater of $250,000 or twice the gross gain or loss from
the offense.
Mr. BHARARA praised the work of the FBI, the Vancouver
Integrated Market Enforcement Team of the Royal Canadian Mounted
Police, the Vancouver Police Department, the Criminal Prosecution
Assistance Group of Financial Industry Regulatory Authority, and
the United States Securities and Exchange Commission for their
assistance in the investigation.
Assistant United States Attorney RAY LOHIER is in
charge of the prosecution.
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