The United States Securities and Exchange Commission has charged Â鶹´«Ã½Ó³»businessman David Sidoo with stock fraud offences nearly two years after being sentenced to jail for criminal wire fraud for his participation in the U.S. college admissions and bribery scandal.
On April 14, the SEC issued a civil complaint in the Southern District of New York against Sidoo and seven other men for allegedly orchestrating a complex, international stock manipulation scheme that generated at least $145 million in illicit profits. Sidoo is charged with fraud in the offer or sale of securities, fraud in the purchase or sale of securities and unregistered offerings of securities for his alleged part in two “pump and dump” operations.
A once-prominent based out of Â鶹´«Ã½Ó³»and a former BC Lions football player, the 62-year-old faces a permanent ban from the U.S. stock market and monetary fines if proven guilty.
According to the complaint, the alleged scheme’s central figure is Canadian citizen Ronald Bauer, who allegedly partnered with others to manipulate the shares of at least 17 public companies illegally. In a separate case revealed the same day, Bauer, 46, was criminally charged on multiple counts of fraud and conspiracy to commit money laundering. , Bauer, then living in a luxury condo in Vancouver, was banned from directing companies for five years after settling with the SEC on allegations of market manipulation.
“Bauer oversaw and coordinated virtually every aspect of every penny stock fraud perpetrated by the various groups he led,” stated the commission.
Sidoo is accused of partnering with Bauer to use two public companies he directed — one registered in B.C. — to conduct pump-and-dumps.
According to the complaint, Bauer and others allegedly amassed millions of cheap insider shares, then concealed them across an array of international private shell entities. Then, they allegedly heavily promoted the companies with "misleading" marketing materials to generate investor interest before illegally selling the shares at artificially-inflated prices, resulting in significant profits at the investors' expense.
“Like others, Sidoo used offshore omnibus vehicles and front companies to conceal the fact that he was the beneficiary of stock sales and failed both to disclose his beneficial ownership and trading and to register his stock sales as legally required,” the commission alleges.
The complaint states that Sidoo’s North American Oil and Gas Corp. generated USD $15.23 million in illicit proceeds between July 2013 and August 2014. In contrast, American Helium Inc. generated USD $1.45 million between March 2018 and February 2020.
Some alleged illegal activity occurred after Sidoo was arrested on March 8, 2019, in San Jose, California, on charges by the U.S. Department of Justice related to the high-profile U.S. college admissions and bribery scandal. Sidoo was in a federal jail after eventually admitting he paid $200,000 for test expert Mark Riddell to take his son’s entrance exams. Riddell was sentenced to five months in prison this month for his part in the scheme.
“Between March 2018 and February 2020, accounts associated with the ‘Sidoo & Bauer Ring Coalition’ sold at least 7.64 million American Helium shares, for proceeds of at least $1.45 million,” the complaint notes.
“Sidoo was involved in engaging almost all of the firms used for the American Helium promotional campaign” that “caused dramatic rises in demand for American Helium stock,” the complaint states.
The commission shows intercepted emails to and from Sidoo and/or his office associate showing how Sidoo first amassed shares in American Helium before promoting them.
Sidoo initially amalgamated three B.C. companies into American Helium and used an unnamed Â鶹´«Ã½Ó³»broker to create numerous accounts to receive and sell the shares. Sidoo then sold new company shares to hand-picked entities he ultimately controlled, according to the complaint.
“Note that David [Sidoo] is managing the process and he is carefully monitoring the [subscriber] list and who else needs to be added,” reads an email from a Sidoo associate to alleged co-conspirators in the complaint.
The commission further outlines some of the alleged manipulation Sidoo undertook as a company director for North American Oil and Gas Corp.
Sidoo first bought a Nevada-based public shell company for $350,000 (via a Swiss entity) and split the stock 19:1, leaving him and Bauer with nearly 30 million shares, or 92% control of all shares.
“By having their North American Oil shares allocated in multiple different tranches, each of which fell below 5% of the company’s total outstanding shares, to various nominee shareholders and omnibus vehicles administered by various Offshore Platforms, Defendants Sidoo, Bauer and Auringer created the false appearance …that multiple different, unrelated offshore corporate entities each held less than 5% of North American Oil’s stock,” the commission asserts.
The commission alleges Sidoo understood federal securities laws and thus was aware of his illegal actions: “For his part, Sidoo had worked for eight years as a stockbroker…and as such had significant exposure to, and therefore awareness of, the federal securities laws’ antifraud, registration, beneficial ownership reporting and insider transaction reporting provisions.”
The commission brought the since investors there bought shares from over-the-counter markets.
Sidoo spent three months at SeaTac Federal Detention Center, from October 2020 to December 2020. Following his conviction, the provincial government stripped Sidoo of his Order of B.C.
Sidoo resides in a home valued at $35 million on Belmont Avenue in Vancouver’s West Point Grey neighbourhood near UBC. He has none of which have been commercially successful.
