PAULSBORO, NJ – Did you know there was a publicly traded delicatessen operating in New Jersey that was worth $100 million dollars? When the Securities and Exchange Commission got wind of the astronomical valuation, they investigated, because something at the deli didn’t smell right, and it wasn’t the cold cuts.
The SEC noticed the anomaly when the deli’s stock price rose from $1 per share to $14 per share in a matter of about a year, even though the business was barely making any money at all.
This week, the Securities and Exchange Commission today charged Peter L. Coker Sr., Peter L. Coker Jr., and James T. Patten for their roles in orchestrating fraudulent manipulative securities trading schemes related to the deli.
“These schemes included artificially inflating the share price of Hometown International, which operated a New Jersey deli producing less than $40,000 in annual revenue, from approximately $1 per share in October 2019 to nearly $14 per share by April 2021, leading to a grossly inflated market capitalization of $100 million,” the SEC said in the complaint filed against the owners.
The Coker’s used Hometown International as a front to artificially inflate the stock price of the business through a shell company called E-Waste Corp. to artificially inflate the stock prices through manipulative trading, the SEC alleges.
“We allege that the defendants’ brazen schemes resulted in the artificial inflation of the stock price of two publicly traded companies with little to no annual revenues,” said Scott A. Thompson, Associate Director of Enforcement in the Philadelphia Regional Office. “Such manipulative schemes diminish the trust investors must have in the integrity of the markets, and we will pursue those who engage in such wrongdoing.”