Troy Joseph Flowers, who has been in trouble on and off with securities regulators and criminal investigators, is back in trouble again. The Securities and Exchange Commission on July 19 charged Flowers and Sean Nevett with illegally concealing their control and ownership of Licont Corp. and Artec Global Media.
According to the Securities and Exchange Commission, Flowers through his newly-renamed Fruition, Inc. of Del Mar, along with Nevett, manipulated the shares of the two companies through a technique called "matched trading" — trading that appears to involve third parties' buying or selling stock, when in reality it was controlled by Flowers and Nevett.
They then dumped the shares on the market, reaping a $3.8 million gain, according to the securities agency. Flowers has taken the Fifth Amendment during testimony in this matter, says the SEC.
Flowers spent much of his brokerage career with La Jolla Capital (later named Cortez Securities), a fast-buck trader of penny stocks and grossly-inflated shares -- one of the most crooked brokerage houses in the United States when it was still going. When it was closed down by the state, investors got 2.5 cents on the dollar.
The district attorney's office took on the case of Natural Born Carvers, one of the stocks Pacific Cortez dumped on customers. Harold Bailey (B.J.) Gallison, head of Pacific Cortez, got five years in prison. Flowers spilled the beans to the government and only got probation. Flowers was barred from the industry by the Financial Industry Regulatory Association in 2002, but somehow got back in the business for this caper.
Gallison, known for offshore shenanigans, last year got 18 years in the Big House for running a pump-and-dump scheme through offshore entities.