A 6th Guilty Plea In Stock Manipulation Scheme That Sent Ex-Council Member To Prison – Connecticut News

A 6th Guilty Plea In Stock Manipulation Scheme That Sent Ex-Council Member To Prison – Connecticut News

Another discredited stock broker pleaded guilty to fraud and tax charges Wednesday, admitting he was part of a group of disbarred securities traders who helped carry off the $20 million stock swindle that sent former Hartford city councilor Corey Brinson to prison.

Brian Ferraioli, 40, of Sayville, N.Y., is the sixth person to plead guilty in the case. Four of the six, including Ferraioli, are Long Island men with histories of securities violations who participated in a series of Connecticut-based stock manipulations beginning a decade or so ago.

Federal prosecutors have said the manipulations ensnared more than 12,000 victims across the country, many of whom are retirees and lost life savings. The investigation is continuing and more arrests are expected.

The conspirators ran what is known as a pump-and-dump scheme. They acquired blocks of stock in worthless shell companies and then pitched the companies to investors as being on the cusp of a commercial breakthrough, often in fields such as rare earth mining or software development.

The stock manipulators used rigged stock trades, phony announcements about business developments and other fraudulent means to pump up share prices of the stock, much of which they controlled. Then, the conspirators dumped, or sold their blocks of stock as prices rose, collapsing share value and leaving unwitting investors with worthless shares.

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