California Lawyer Goes to Prison for Securities Fraud

Richard Weed, a financial services lawyer, has been sentenced to four years in prison over his involvement in a stock scam involving a number of publicly trading companies. His sentence was issued in the U.S. District Court in Boston.

Weed was convicted of securities fraud and wire fraud in May. He and two others are accused of conspiring to make it appear as if CitySide, a ticket reseller based in Boston, was growing as a company when, in fact, it was in financial trouble. Weed was the ticket reseller’s secretary and on its board.

He drafted false and misleading legal opinion letters in order for his co-conspirators to get free trading stock. He also had the stock distributed to various entities under their control to hide their ownership of CitySide. Because of this, said the U.S. Attorney’s Office, District of Massachusetts, the co-conspirators were able to manipulate the reseller’s stock and sell shares at prices that were artificially inflated.

The government has been seeking to stop fraud involving microcap stock markets. In addition to his conviction, Weed was also the subject of an SEC complaint brought in 2014 accusing him of involvement in a pump-and-dump scam utilizing CitySide stock. The regulator accused him of playing a part in structuring the ticket reseller into a publicly traded company via reverse mergers, false legal opinion letters, and backdated promissory notes so that Coleman Flaherty and Thomas Brazil could get millions of unrestricted stock shares in CitySide.

As a result, said the SEC, investors were subject to a promotional campaign that was misleading and false. When the company’s stock went up because of the hype generated by the campaign, Flaherty and Brazil sold their shares, making about $3M in illicit profits. Meantime, Weed is said to have made hefty legal fees for his involvement.

CitySide’s stock would fail soon after and the company would shut down.

Our securities fraud law firm are here to help investors in getting their fraud losses back. We represent clients throughout the US. Contact Shepherd Smith Edwards and Kantas, LTD LLP today.

California Attorney Convicted by Massachusetts Jury of Securities Fraud in Scheme to Manipulate Stock of Sports Ticket Broker, SEC, May 16, 2016

Read the SEC Complaint (PDF)

Securities Attorney Sentenced to Prison for Securities Fraud, DOJ, August 23, 2016