Feds Target Execs Over Penny Stock Fraud, Bribery

Law360, New York (June 30, 2011, 10:04 PM EDT) -- The federal government launched parallel civil and criminal suits in Florida on Thursday against three executives and a penny stock promoter for allegedly using kickbacks and bribes in microcap trading schemes.

The U.S. Securities and Exchange Commission and the U.S. attorney's office charged Real American Brands Inc. CEO Douglas Newton, KCM Holdings Corp. CEO Donald W. Klein, SmokeFree Innotec Inc. CEO Thomas Schroepfer and penny stock promoter Brian Gibson with civil and criminal charges of securities violations and conspiracy to commit securities fraud.

The alleged schemes...
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