According to a press release from the U.S. Attorney’s office, two registered brokers, Matthew Bell and Craig Josephberg, along with four other individuals were indicted on charges of securities fraud in connection with an alleged $300 million market manipulation scheme in four publicly traded companies.

Bell and Josephberg worked as independent brokers, however, they were both affiliated with registered brokerage firms. According to BrokerCheck, Bell worked briefly with Securities America from 08/2013 – 10/2013. He previously worked with WFG investments from 07/2009 – 06/2013 in San Antonio, Texas.

Josephberg’s BrokerCheck indicates he has been affiliated with New York brokerage firm Meyers Associates since 10/25/2013. From 11/2010 – 10/2013, he was employed by Halcyon Cabot Partners.

According to the press release, the indictment alleges that between October 2012 and July 2014 that the defendants and others orchestrated two “pump and dump” schemes, defrauding investors in the public companies: CodeSmart, Cubed, StarStream and Staffing Group. In order to artificially control the price and volume of shares in those companies, they coordinated their trading activity and concealed their own ownership interests in those companies.

Furthermore, it’s alleged that company press releases and SEC filings containing false and misleading information were issued, and that company shares were sold to clients of Bell and Josephberg without their clients’ knowledge or consent.

In the press release, U.S. Attorney Loretta E. Lynch stated, “They took companies with essentially no assets or activity and deceived the market into believing they were worth hundreds of millions of dollars through a dizzying round of insider and unauthorized trades. When the defendants stopped their criminal game of musical shares it was the unsuspecting investors who were left holding the bag.”

In some cases, the brokerage firms that employed Bell and Josephberg may be liable for investment losses. Brokerage firms have a legal responsibility to adequately supervise the business activities of their employees. If a broker engages in a scheme that misleads clients the brokerage firm that employs them may be liable for negligent supervision.

If you were a client of Matthew Bell or Craig Josephberg and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 312-238-9650 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to the representation of investors in FINRA arbitration claims against brokerage firms throughout the United States. Our offices are located in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group, please visit the firm’s website at www.WhiteSecuritiesLaw.com.