The U.S. Securities and Exchange Commission might finally be closing the book on the fraudulent team of Justin Costello and David Ferraro. On July 11, the agency received a final judgment against Ferraro for his role in alleged microcap stock promotion schemes that generated more than $140,000 in profits for Ferraro.
In January, Green Market Report outlined the complaint against the two. Costello pretended to be a billionaire, claimed he was a war veteran, and took money from investors for cannabis businesses. Instead, he spent that money on himself, including funding his lavish wedding. Costello pleaded guilty in a few months after a dramatic capture by an FBI SWAT team in California.
According to the SEC’s complaint, from at least October 2019 through January 2021, Ferraro and Costello engaged in a stock promotion scheme in which Ferraro recommended and promoted to his Twitter followers and the public at least five microcap stocks that Costello owned. Ferraro did not disclose that he and Costello intended to sell shares of those stocks as their prices rose, or that Costello would pay Ferraro a portion of his profits from some of those sales.
The SEC’s complaint also alleged that Ferraro separately conducted his own stock promotion scheme with two additional microcap stocks, generating profits of approximately $68,000.
Ferraro was a GRN Holding Corp. (OTC: GRNF) investor who had posted about the company on various investor message boards. Ferraro controlled a Twitter account under the handle @computerbux, which had nearly 10,000 followers as of December 2019. He posted at least 7,900 tweets in 2019 and at least 5,000 tweets from January through June 2020. Nearly 90% of these tweets referenced a specific stock or stocks.
Other stocks that Ferraro pumped included Powerdyne International and South Beach Spirits.
Ferraro agreed to a settlement and consented, without admitting or denying the allegations in the complaint, to be barred from participating in any offering of a penny stock. The final judgment against Ferraro orders him to pay disgorgement in the amount of $142,724.97, plus prejudgment interest thereon in the amount of $11,704.92, for a total of $154,429.89.