The Oklahoma Securities Commission accused a Tulsa brokerage firm, a Utah man and nine other individuals of operating a stock manipulation scheme costing investors millions of dollars.
The commission accused Fitzgerald, DeArman and Roberts Inc. of manipulation and abusive promotion of several penny stock companies, including GoldCor, a Florida company that claimed to have a secret process for converting black volcanic beach sand in Costa Rica into gold."We estimate that investors in Oklahoma lost at least $4 million," said Susan Bryant, administrator of the Oklahoma Department of Securities. "Nationwide, investor losses could top $300 million in GoldCor alone."
Bryant said FDR also faces three lawsuits filed in Tulsa federal court by disgruntled investors, and the federal Securities and Exchange Commission has brought suit against GoldCor in Florida.
The Oklahoma action seeks to revoke the license of FDR and bar its salesmen from any further association with securities firms in the state.
The salesmen are accused of promoting several penny stock companies through the use of high-pressure, abusive sales tactics that manipulated the price of 39 million shares of GoldCor stock from about $2 to more than $8 per share. Bryant said the stock peaked at more than $11 per share and is now trading at 3 to 9 cents.
Bryant said FDR, a 25-year-old investment firm, closed June 23 and has been in liquidation proceedings with the Securities Investor Protection Corp. since June 28. She said FDR had operated 17 brokerage branch offices in 10 states.
Among those the commission seeks to bar from doing business in Oklahoma are Richard D. Brown of Daytona Beach, Fla., president of GoldCor; William M. DeArman of Phoenix and Walton Carlisle of Jacksonville, Fla., identified as principals of FDR; and Carl W. Martin of Mapleton, Utah, who is accused of improperly promoting GoldCor and five related companies.
Also named were six Oklahoma residents - James R. Chisholm of Broken Arrow, Charles P. Culp of Drumright and Robert T. Adams Jr., Robert D. Bell, John R. Thomas and Rudolf F. Pickert, all of Tulsa.
The commission said its notice of intent to take administrative action gives the parties named 15 days to request a hearing.