Litigation Release No. 25131 / July 1, 2021
Securities and Exchange Commission v. Contrarian Press, LLC, Scott S. Fraser, and Nathan Yeung, No. 16-civ-6964 (S.D.N.Y. filed Sept. 6, 2016)
The Securities and Exchange Commission has obtained a final judgment against the CEO of a sexual health products company and a paid promoter whom it charged with orchestrating fraudulent promotional campaigns to tout the company’s stock.
According to the SEC’s complaint, filed in September 2016, Scott Fraser, who was a major shareholder in Las Vegas-based penny stock issuer Empowered Products Inc., also ran Contrarian Press, a newsletter publishing business. Fraser and Contrarian Press allegedly coordinated three promotional campaigns touting Empowered Products’ stock while concealing their involvement. The SEC alleged that in one of the campaigns, Fraser authored and published the articles in Contrarian Press newsletters using the “Charlie Buck” pseudonym, and in the other two campaigns, Fraser and Contrarian Press hired other promoters to disseminate the promotions to their respective subscriber lists in exchange for fees. According to the complaint, the promotional publications failed to disclose that Empowered Products and Fraser approved and paid for the advertisements.
The final judgment against Fraser, entered on July 1, 2021, by the U.S. District Court for the Southern District of New York, enjoins Fraser from violating the anti-touting provisions of Section 17(b) of the Securities Act of 1933 and the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and orders him to pay a civil penalty of $125,000. The judgment also bars Fraser from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act or that is required to file reports pursuant to Section 15(d) of the Exchange Act, and bars him from participating in the offer of any penny stock.
The SEC dismissed the action against Contrarian Press, LLC, which is now defunct. Yeung, who the SEC alleged coordinated one of the promotional campaigns on behalf of Contrarian Press, consented to a final judgment entered on August 28, 2019, enjoining him from violating Section 17(b) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, ordered disgorgement and prejudgment interest totaling $38,276, and a civil penalty of $75,000, as well as barring Yeung from participating in the offer of any penny stock.