Since 2011, Shalon, Aaron, Orenstein, and their co-conspirators orchestrated multimillion-dollar stock manipulation – or “pump and dump” – schemes to manipulate the price and trading volume of dozens of publicly traded microcap stocks (penny stocks) in order to enable members of the conspiracy to sell their holdings in those stocks at artificially inflated prices. In some instances, Shalon and Aaron caused the companies to become publicly traded in furtherance of the scheme. To do so, Shalon caused privately held companies to engage in “reverse mergers” with publicly traded shell corporations Shalon controlled. Orenstein managed bank and brokerage accounts used in furtherance of the schemes under aliases that he supported with false passports and other false personal identification information.
To artificially manipulate the trading volume and prices of dozens of stocks, among other things, at pre-arranged times, Shalon and Aaron disseminated materially misleading, unsolicited messages by various means – including by email (spam) to up to millions of recipients per day – that falsely touted the stock in order to trick others into buying it. Shalon and Aaron engaged in the U.S. Financial Sector Hacks in part to acquire email and mailing addresses, phone numbers and other contact information for potential victims to whom they could send such deceptive communications. Shalon and his co-conspirators generated tens of millions of dollars in unlawful proceeds from the securities market manipulation schemes.