SEC Sanctions Mt. Kisco Lawyer Over Stock Manipulation Scheme

MOUNT KISCO, NY — The SEC has sanctioned Mount Kisco attorney Peter DiChiara for helping a company owner hide his involvement in a stock fraud scheme.

DiChiara was banned from handling or advising on legal matters under the agency's jurisdiction for three years, at which time he may apply to resume appearing or practicing before the SEC. Earlier this month, a federal judge in Boston fined him $57,168 and also barred him from providing legal counsel to anyone selling securities for five years.

DiChiara helped a client create a scheme that made it look as if publicly traded companies were being acquired, but instead stock prices were artificially being inflated and then dumped for a huge profit by the owners. In the case of a company known as Environmental Packaging, the conspirators went to great lengths to conceal their fraud.

The stock trades were designed so they “appeared to be ordinary trading,” the SEC said in its civil complaint.

"DiChiara helped Tobin transfer his shares though a network of nominee entities to evade legal restrictions on stock sales," according to the complaint. "This enabled Tobin to sell his shares in bulk during a stock promotion, as Environmental Packaging shares more than doubled in price."

DiChiara helped his client Morrie Tobin hide ownership of the company. The lawyer also helped Tobin to transfer $1 million to an offshore stock promotions company hired to promote the one of the stocks at the center of the fraud.

DiChiara's offer of settlement was accepted by the SEC and he consented to the sanctions imposed by the commission.

DiChiara's client, Tobin, meanwhile, entered a a guilty plea last year to criminal charges related to the stock fraud. He was ordered to pay $4 million in restitution along with a $100,000 fine and sentenced to one year in prison.