Thanks to some DD by a poster (BigBake) on another board...

http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1814277&symbol=*SEC&news_region=C

SEC seizes Ryan, McKeown's Florida accounts

2011-03-01 14:23 ET - Street Wire

Also Street Wire (U-*SEC) U.S. Securities and Exchange Commission
Also Street Wire (U-AWSL) Atlantic Wind & Solar Inc
Also Street Wire (U-BEHL) Biocentric Energy Holdings Inc

by Mike Caswell

The U.S. Securities and Exchange Commission has won an order seizing $1.07-million in stocks and cash formerly belonging to Montreal penny stock promoters Dan Ryan and Carol McKeown. (All figures are in U.S. dollars.) The money represented the proceeds from a scalping scheme, in which the couple promoted stocks through their website as they sold millions of shares.

The decision comes one month after the SEC won $3.79-million in penalties against the couple for the scheme. The judgment was a victory by default, as Mr. Ryan and Ms. McKeown failed to respond to the case.

The seizure order, handed down on Feb. 25, 2010, by Florida Judge James Cohn, directs several brokerage firms to turn over all the stocks and cash held by two private companies the couple control. The stocks, which the SEC values at $943,802, will be returned for cancellation. The couple's accounts had been frozen since the SEC launched the suit in June, 2010.

Mr. Ryan and Ms. McKeown did not appear in court to oppose the seizure. Their only appearance in the case was early on, when Ms. McKeown wrote the judge to ask for time to secure a lawyer. She said that the asset freeze left her and Mr. Ryan with no financial ability to defend themselves. Judge Cohn denied the request on Sept. 3, 2010.

The SEC then sought and won the default judgment against the couple, in which the judge ordered them to disgorge $3.79-million in ill-gotten gains and permanently banned them from participating in penny stock offerings. Judge Cohn also awarded the SEC yet-to-be-determined civil penalties.

SEC's complaint

The SEC launched the case on June 23, 2010, when it filed a civil complaint against Mr. Ryan and Ms. McKeown in the Southern District of Florida. According to the complaint, the couple touted U.S. listed companies through their website, called PennyStockChaser, as well as on Facebook and Twitter. As they were touting the stocks, they failed to properly disclose that they were selling shares in those same companies.

The SEC listed six stocks affected by the scheme, one of which was Toronto pink sheets listing Atlantic Wind and Solar Inc. The company, which touts itself as a developer of "rooftop solar energy parks," first appeared in PennyStockChaser on Oct. 14, 2009. A posting that day read, "[Atlantic] closed at $2.10 yesterday and it is poised to go into break out mode, THIS PICK IS HEADED TO $10.00." Another post, dated Oct. 21, 2009, advised readers "buckle in" as the company had big news coming.

The next day, the stock reached an all-time high of $4.84 on volume of over one million shares. According to the SEC, Mr. Ryan and Ms. McKeown sold 360,000 shares into the demand, at prices between $1.49 and $3.37. They grossed $780,600 from the sales. (The stock has since declined to $1.30, which the company partly attributes to three stock dividends.)

Another promotion the complaint described was that of Biocentric Energy Holdings Inc., a pink sheets company that was trying to make Omega-3 oil out of algae, among other projects. A July 12, 2009, post stated: "We think [Biocentric] could move past .10 and then .20.... Members should be buying this stock @.029 and socking the stock away... THIS WILL BE A HUGE WINNER."

The stock, which had been trading under a penny, went to three cents, and its volume ranged from 10 million to 30 million shares. The SEC claimed that Mr. Ryan and Ms. McKeown sold 24 million shares during the promotion, grossing $569,000. (The stock was most recently at 0.02 cent.)

The SEC said investors did not receive proper notification that Mr. Ryan and Ms. McKeown were selling the shares. Their website only contained a disclaimer which stated that they "may be selling shares of the stock at the same time the profile is being disseminated to potential investors; this should be viewed as a definite conflict of interest and ... the reader should take this into consideration."

The other four promotions, which followed similar patterns, were with Avro Energy Inc., Converge Global Inc., Bluewave Group Inc. and MSE Enviro-Tech Corp.

The SEC sought disgorgement of ill-gotten gains, appropriate civil penalties and permanent penny stock bans. In addition to Mr. Ryan and Ms. McKeown, the complaint named their two private companies, Meadow Vista Financial Corp. and Downshire Capital Inc., as defendants. The asset freeze and subsequent seizure order applied to Florida brokerage accounts that the companies controlled.