For anyone who has ever taken a chance and invested their money in stock promised to be a “sure thing”, they have no doubt experienced the term “pump and dump.” Penny stocks are often known for falling into this category. Whether Gery Shalon has been guilty of touting such infamous pump and dump investments (among other things) remains to be determined, however, the Securities and Exchange Commission has taken steps to get to the bottom of his activities.
The Israeli financier has found himself under heavy investigation with both the FBI and the SEC for his trading and casino activities, along with his possible involvement in serious cyber breaches. It is believed that Shalon, along with one other Israeli partner as well as an American associate, participated in a massive e-mail spam scheme to market penny stocks which many believe were sub par investments. It is believed that this scheme netted Shalon and his associates nearly $3 million.
When the SEC released a press statement on Tuesday, July 21, naming Shalon and his confederates (Israeli Zvi Orenstein and American Joshua Samuel Aaron) the two Israeli men were detained by the Israeli authorities and will likely face extradition charges to the United States. Aaron is still at large.
Within hours, an Israeli court had ordered the two Israeli men be held without bail pending the extradition hearings. However, what is most culpable were the findings of a preliminary search of Shalon’s Israeli home, which revealed a stash of more than half a million U.S. dollars.
The penny stocks which Shalon and his partners were alleged to have solicited to various email recipients had apparently been acquired by the group of men, who then sold their holdings for obscene profits when the stock surged. It has been stated by authorities that the Shalon group saw a profit of about 1,800% before the stocks collapsed.
The SEC in their statement have accused the Shalon group of writing the solicitous emails, disseminating them to unsuspecting investors and providing operational support by setting up and handling certain brokerage accounts under many different aliases. If convicted of these charges, the group of men could face up to 20 years in prison.
But the men have also been tied with Rogue Casinos, many of which no longer exist due to failed business operations. Their online-casino operation, which was incorporated in the Netherlands, is being investigated for spamming operations and not paying winners their proceeds. They have also been linked to a hacking campaign which is alleged to have targeted various Google blogs to promote their own operations.
There have been many reports surfacing which claim that Shalon and Orenstein were involved with the casino operation, Affactive. This operation is actually connected with the Netad Management online casinos group, and for many years has been deemed a rogue casino site by watchdogs such as Casinomeister.com. Among their offences have been the high volume of unwanted spam and ignoring removal requests by site owners. But even more serious have been the continual complaints that they either underpaid or ignored users’ requests to receive cashouts on winnings.
Affactive was also accused of hacking several thousand WordPress blogs during 2014 and into 2015 to manipulate Google searches and algorithms, thus forcing many users to their own gambling sites.
But this is not the only online casino transgression that Shalon and his group have been credited with. Revenue Jet is another such alleged culprit, which, along with Affactive, has been accused of denying winners their dues. As such, both Revenue Jet and Affactive have been blacklisted from most reputable online casino websites.
But Shalon’s infamy has extended beyond the financial markets and online casinos. While many people are familiar with the serious security breaches that occurred last summer with JP Morgan Chase (which was not discovered until the following autumn), what many did not realize at the time was that Shalom and his group may have been directly linked to that cyber attack.
The breach, which was one of the largest ever experienced by the bank, involved scores of financial information and account data for millions of customers. While the extend of Shalon’s involvement has not been totally unraveled yet, this charge, along with the others, will be closely followed.
If the U.S. authorities are successful in their extradition hearing, which is due to take place shortly, Shalon and his team will be on U.S. soil soon to answer these charges. If convicted, they will have much to answer for.
Personal Note: I will never understand the greed of some people. If I was running a succesful group online casinos, I think I would be happy with the millions I was making, and run a legitimate and honest casino operation. Why some casinos feel the need to scam players is beyond me. They would rather walk over $100 bills to pick up pennies. Don’t they understand once your casino has a black eye, you will make much less than you would if you just ran a reputable outfit? I just don’t get it.