The Securities and Exchange Commission has sued the self-declared investment guru who drove up the stock of a tiny Tacoma company with claims he and his disciples were creating a "short squeeze" that would force major market players to pay exorbitantly for the shares.
While Jerry S. Williams instructed his flock on an Internet message board and in costly seminars to buy and hold the stock of Cascadia Investments until it cornered the market, he himself was "scalping" — secretly unloading tens of millions of shares, the SEC charged in a federal civil suit filed July 20 in New Haven, Conn.
As reported here in February 2010, Cascadia shares soared more than a hundredfold from two-tenths of a cent in mid-2009 despite no sign of success in the company's purported switch from real-estate investments to Internet games.
At its peak of 72 cents in March 2010, Cascadia's market capitalization was about $150 million even though its quarterly revenues were just a few thousand dollars and its Central Tacoma headquarters was a shabby one-room office. (It's unrelated to Cascadia Investment, the Bill Gates company.)
The stock's steep climb was orchestrated by Williams and his Monk's Den investment chat room, according to the SEC suit. Williams "reaped unlawful profits" of more than $2 million through what was essentially a pump-and-dump scheme, selling at least 24 million Cascadia shares while making false and misleading statements to "a large group of followers," says the suit.