Silicon Valley Streaming Service Executive, David Foley Indicted in Alleged “Pump and Dump” Stock Fraud Scheme
CHICAGO (STL.News) A former executive of a Silicon Valley video streaming service has been indicted by a federal grand jury in Chicago for allegedly engaging in a “pump and dump” stock fraud scheme.
While serving as a director of San Jose, Calif.-based Nanotech Entertainment Inc. (“NTEK”), DAVID FOLEY schemed with an investment manager to manipulate purchases and sales of shares in NanoTech Gaming Inc. (“NTGL”), a Las Vegas, Nev.-based business that had formerly operated as a division of NTEK, according to a ten-count indictment returned Jan. 11, 2021, in U.S. District in Chicago. The indictment charges Foley, 55, of Los Gatos, Calif., and the investment manager, BENNIE BLANKENSHIP, 49, of New Carlisle, Ohio, with wire fraud and securities fraud. Arraignments are scheduled for Jan. 19, 2021, at 10:00 a.m., before U.S. District Judge Steven C. Seeger.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. The government is represented by Assistant U.S. Attorney Matthew Getter.
According to the indictment, Foley acquired shares in NTGL and fraudulently caused them to be unrestricted. Blankenship promoted the NTGL shares by exaggerating the stock’s prospects for success, thereby artificially inflating the share price, the indictment states. Foley then schemed with others to sell the pumped-up stock to the investing public, the indictment states. The fraud scheme lasted from 2013 to 2016, and during a portion of that time Foley was incarcerated in California on an unrelated criminal conviction, the indictment states.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.