THE FEDERAL authorities in the US have halted trading in shares in an investment company that claimed to be in talks with State assets agency Nama to buy properties in the Republic.
The Securities and Exchange Commission, which regulates US stock markets, and the FBI have halted trading in the shares of seven companies, including Las Vegas-based 1st Global Financial Corporation, following an investigation into share dealing.
The US authorities also filed fraud charges against 1st Global executive Albert Reda, of Tustin, California, who was arrested as a result of a federal sting operation. Mr Reda has since resigned.
1st Global said the rest of its management believed the transaction that is the subject of the federal charge was isolated and occurred without the knowledge of any executives other than Mr Reda.
It added that it was implementing new controls and procedures before completing further transactions. It is also reviewing all transactions for which Mr Reda had responsibility.
The authorities allege, in complaints lodged with a number of US courts, that the companies and individuals were engaged in kickbacks – paying investors to buy their shares to drive up the value.
The FBI alleges that an undercover agent posing as an investor received $16,000 (€11,953) from Mr Reda and 1st Global in return for buying $32,000 (€23,905) worth of its shares.
In the statement last month, 1st Global Financial said it intended to have further meetings with Nama representatives to “explore the possible acquisition of additional Nama assets”.
It said it had proof of funds of €1 billion and had made offers to Nama to buy Irish commercial properties controlled by the assets agency.
Its chief executive, John Bannister, added that the company was making the announcement to confirm its commitment to “participate in the economic revival of the Republic of Ireland”.
It is understood that 1st Global Financial Corporation has appointed an agent in the Republic but has not agreed any deals with Nama.
The company says it has been “creating strategic partnerships with individual and institutional owners of property portfolios in Ireland, the United Kingdom, Europe, USA and the Caribbean to finance the acquisition of those portfolios”.
Following the suspension of its shares, which will last until December 14th, and Mr Reda’s arrest, Mr Bannister said that he hoped that these events would not have a “chilling effect” on the plans.
Kickback schemes are designed to artificially boost company share prices so holders can sell them at a profit. They are normally focused on small “penny” stocks.
