Leader Of International Stock Manipulation Ring Pleads Guilty

Damian Williams, the United States Attorney for the Southern District of New York, announced today that RONALD BAUER pled guilty to conspiring to commit securities fraud in connection with his role in a long-running "pump-and-dump" stock manipulation scheme. BAUER pled guilty before U.S. District Judge Paul A. Engelmayer and is scheduled to be sentenced on May 20, 2025.

U.S. Attorney Damian Williams said: "For years, Ronald Bauer orchestrated a sprawling 'pump-and-dump' scheme involving the shares of numerous U.S.-based issuers that preyed on ordinary, retail investors. While Bauer and his co-conspirators lived outside of the United States, they took advantage of the U.S. markets to perpetrate their fraud and reaped millions upon millions in profits at the expense of the victims. Today's guilty plea should send a clear message that this Office is committed to holding market manipulators accountable no matter how hard they try to conceal their crimes."

According to allegations in the Indictment, public filings, and statements made in court:

BAUER, a/k/a "Patek," a citizen of Canada and the United Kingdom who resided in the United Kingdom, orchestrated numerous "pump-and-dump" schemes, controlling various aspects of the plans. The Securities and Exchange Commission ("SEC") had previously filed securities fraud claims against BAUER in 2005 for engaging in an alleged market manipulation scheme that was alleged to have issued false and misleading press releases while secretly dumping tens of millions of shares into the inflated market that BAUER and his associates had created. In 2006, without admitting or denying the allegations, BAUER consented to the entry of a judgment against him providing for injunctive relief, barring BAUER from serving as an officer or director of a public company or participating in an offering of penny stock for a period of five years, and payment of disgorgement of $840,000.

As he admitted in connection with his guilty plea, BAUER and his co-conspirators participated in a conspiracy to commit securities fraud with respect to seven issuers: Cantabio Pharmaceuticals Inc. (CTBO) (previously Lion Consulting Group (LIOC)); Virtus Oil and Gas Corp. (VOIL) (previously Curry Gold Corp. (CURGD)); Steampunk Wizards (SPWZ) (previously Freedom Petroleum (FPET)); Black Stallion Oil and Gas Inc. (BLKG) (previously Secure IT Corp.); PetroTerra Corp. (previously Loran Connection Corp (LRNC)); Black River Petroleum (BRPC) (previously American Copper Corp. (AMCU)); and Cyberfort Software Inc. (CYBF) (previously Patriot Berry Farms (PBFI)) (collectively, the "Issuers").

To perpetrate the "pump-and-dump" scheme, BAUER and his co-conspirators obtained ownership and control of all or the vast majority of the unrestricted (i.e., free trading) stock of the Issuers. BAUER and his co-conspirators sought to conceal their beneficial ownership of these controlling interests in the shares of the Issuers by causing their shares to be distributed to and divided amongst nominee entities that had been established by a Swiss corporation called Blacklight, S.A. These entities were nominally owned by unrelated third parties but were, in fact, controlled by BAUER or his co-conspirators. Thereafter, BAUER and his co-conspirators retained trading authority over the blocks of shares of the Issuers held by the Blacklight nominee entities and BAUER regularly provided trading instructions with respect to these shares to executives or employees at Blacklight. In addition, BAUER and his co-conspirators effectively controlled or otherwise maintained significant influence over the management of the Issuers during the "pump-and-dump" scheme.

At times, BAUER and his co-conspirators caused nominees to engage in "match trades"-i.e., place both buy and sell orders in the same stock on the same day-for no legitimate economic purpose. Furthermore, BAUER and his co-conspirators financed and coordinated promotional campaigns touting the Issuers to stoke trading interest in the Issuers' stock, though without publicly disclosing their relationship to the promotional campaigns, their controlling interest, or their intent to sell a significant percentage of their holdings into the buying interest that they intended the promotional campaigns would generate. BAUER and his co-conspirators took steps to conceal the fact that the nominee entities they controlled were the true funding source for the promotional campaigns.

During or shortly after the promotional campaigns, BAUER and his co-conspirators caused the Blacklight nominee entities to engage in trading activity in the Issuers' stock, including selling a large percentage of their holdings of the Issuers' stock, then caused the Blacklight nominee entities they controlled to remit to them the proceeds of the stock sales.

* * *

BAUER, 49, of London, United Kingdom, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison. As part of his guilty plea, a money judgment in the amount of $4,377,228.74 was entered against BAUER.

The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation. He further thanked the Justice Department's Office of International Affairs of the Department's Criminal Division, as well as authorities in the United Kingdom, in particular the Crown Prosecution Service's National Extradition Unit. Finally, Mr. Williams also thanked the Securities and Exchange Commission, which separately initiated civil proceedings against BAUER.

The case is being handled by the Office's Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Jason Richman, Matthew R. Shahabian, Noah Solowiejczyk, and Vladislav Vainberg are in charge of the prosecution.

Public link

Please use the above public link if you want to share this noodl on another website.