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by Mike Caswell
Ibrahim Almagarby, a Florida man accused by the U.S. Securities and Exchange Commission of improperly selling 7.4 billion shares in a group of companies (including at least four Canadian listings), has asked that a judge dismiss the case. He says that his actions were entirely innocent. All that he did was acquire cheap shares and sell them at a profit.
Mr. Almagarby is responding to a civil case in which the SEC cited him for a scheme involving debt instruments. The SEC claimed that he acquired aged convertible debt instruments in a group of penny stocks. He then converted that debt to shares and sold it on the market for a profit, generating $1.47-million. (All figures are in U.S. dollars.) In doing so, he acted as an unregistered dealer, the SEC said.
For his part, Mr. Almagarby claims that there was nothing wrong with his actions. In a motion to dismiss filed on Jan. 18, 2018, he says that the SEC is trying to stretch the rules by considering him to be a dealer when he is just a trader. "If the SEC's position in the instant action were to be accepted, then every single day trader, hedge fund, or other market participant who purchased and sold securities for a profit would be acting as an unregistered dealer, and subject to sanctions," the motion states.
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