The defendants are insiders or promoters of publicly traded companies who made stock sales to a hedge fund in exchange for illegal kickbacks to an individual whom they believed to be the hedge fund manager, but who was in reality an undercover FBI agent.

In related criminal prosecutions, the United States Attorney's Office for the Southern District of Florida on Friday announced the criminal indictments of 6 individuals involved in the schemes.

"This case illustrates the Commission's ability to work together with criminal authorities in creative ways to uncover fraudulent schemes and to protect our markets," observed Linda Chatman Thomsen, Director of the SEC's Division of Enforcement.

David Nelson, Director of the Commission's Miami Regional Office, added:

"The Commission will continue to target corrupt practices in the securities industry in South Florida, and provide resources where necessary to ensure that those who engage in illegal schemes will be found and prosecuted. Our office worked closely with the criminal authorities and provided information and technical assistance throughout the FBI sting operation in order to minimize harm to innocent investors."

The SEC charged a total of 10 individuals, who reside in South Florida, New York, California, and Nevada, with securities fraud.

The Commission's complaints alleged that, in each case, the undercover FBI agent purporting to be a hedge fund manager told the seller or promoter that the kickback had to be kept secret, because buying stock in exchange for kickbacks would violate his fiduciary obligations to the hedge fund.

The complaints alleged that all of the defendants violated the antifraud provisions of the federal securities laws, specifically, Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.