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by Mike Caswell

The U.S. Securities and Exchange Commission has banned Joseph Padilla, a California man jailed for a an OTC Markets scheme that he ran through a Canadian brokerage. The SEC said that Mr. Padilla helped insiders secretly unload millions of shares on the markets, in one case facilitating the illegal sale of over $100-million worth of stock amidst a paid promotion. (All figures are in U.S. dollars.) He and an associate routed share sales and money through offshore accounts, at one point meeting with someone Mr. Padilla called a "straight gangster banker."

The fine and ban for Mr. Padilla are contained in a proposed judgment that the SEC filed on Thursday, Nov. 7, in federal court in Boston. The judgment bars Mr. Padilla from penny stocks and finds him liable for disgorgement of $3.1-million in gains, plus interest, with the total to be offset in part by $3-million that he was ordered to pay in a related criminal case. The sanctions represent a negotiated settlement, and still require approval from the judge. The judge also must determine the length of Mr. Padilla's ban.

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