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The Securities and Exchange Commission (SEC) has filed charges against a group of penny stock players for setting up shell companies concealed as mining companies. Tom and Elizabeth Coldicutt, veterans of the wild Vancouver penny stock scene, raked in $5 million from the scheme, according to the SEC. Other defendants include Susana Gomez of Chula Vista; Christopher Greenwood of San Diego, Mrs. Coldicutt's son; and Robert C. Weaver, Jr., a San Diego securities attorney who previously was the lawyer for Cortez Securities (nee La Jolla Capital), a now-defunct penny stock operation whose major operative went to prison. (The SEC filing doesn't mention Weaver's past. More on Weaver below.)

According to the SEC, Tom Coldicutt, while trading in Vancouver, lost his license for five years for securities violations. Both Coldicutts were involved in trading unregistered stock of a sham corporation, says the SEC, and were permanently enjoined from further violations of securities laws. In the current case, the SEC charges the Coldicutts claimed to be setting up mining companies, but never had any intention of having any substantive mining. The companies were set up to be shells parading as mining companies.

In the current suit, the SEC charges that Weaver, a long-time friend of Tom Coldicutt, knowingly helped the Coldicutts sell shell companies with the aid of nominee officers and directors. Weaver was the lawyer for Cortez Securities and its predecessor, La Jolla Capital. The brokerage frequently ran afoul of regulators and considered fines just another cost of doing business. Eventually, Harold B.J. (Bailey) Gallison, the chief executive, went to prison on fraud charges. Weaver was charged with violations by Nasdaq but the charges were dismissed in 1999.

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