Feds file charges stemming from penny stock fraud

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BOSTON (AP) -- Federal officials have filed cases against corporate executives, lawyers and stock promoters who allegedly used fraud to spur investments in small companies known as penny stocks.

Prosecutors filed a criminal case Thursday charging 13 defendants who agreed to pay kickbacks to an undercover FBI agent they believed was an investment fund representative in exchange for having his purported firm buy stock in certain companies.

The Securities and Exchange Commission also filed a civil case against four people, alleging they used kickbacks to manipulate trading in "microcap," or penny stocks.

The SEC also suspended trading in seven microcap companies involved in the kickback-for-investment scheme. They include 1st Global Financial Inc. of Las Vegas, Augrid Global Holdings Corp. of Houston, ComCam International Inc. of West Chester, Pa., MicroHoldings US Inc. of Vancouver, Wash., and Outfront Companies based in Florida.