Uh Oh for Otto - SEC goes after two Seattle Attorneys
Federal regulators have filed suit against two attorneys of The Otto Law Group for alleged misdeeds involving artificial inflation and dumping of stock. The game is often played on the penny exchange, whereby someone buys a cheap stock, send out notices aimed at getting people to buy the stock, then dumps the stock to reap quick profits.
Attorneys for the SEC say Otto, 50, gained control of the MitoPharm through a complex series of mergers and stock sales.
The SEC attorneys allege in court documents that Otto, Van Siclen and others then began promoting the company's supposed products -- Restorade and Stamina Solution -- in 2007, at a time when the company had no way of producing or distributing either item.
In the months that followed, SEC attorneys claim the company sent out a flurry of press releases aimed at boosting the value of MitoPharm stock. At the same time, Otto allegedly began off-loading shares of the company.
The SEC claims the move netted Otto nearly $1.3 million while crushing MitoPharm's stock price, driving it from a per-share high in August 2007 of $2.31 to 5 cents-a-share in November 2007.
The suit names David Otto and Todd Van Siclen (not to be confused with Robert Craig Van Siclen of Van Siclen Stocks & Firkins, who are not involved).