Everblu's Blumenthal faces court over rigging claims
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The news: ASIC has launched federal court action against Adam Blumenthal, alleging market rigging and directorial duties at his corporate advisory firm Everblu and cannabis play Creso Pharma.
The numbers: The regulator says Blumenthal facilitated loans from his private company, Anglo Menda, to his Everblu clients to trade in Creso Pharma shares while serving on both boards. This included lending financial influencer Tyson "ASX Wolf" Scholz more than $7 million and another Everblu client more than $5 million.
ASIC claims Blumenthal engaged in market rigging on 14 occasions where he enabled client orders to purchase Creso shares in order to inflate the perceived trading market for the stock, also known as wash trading.
It also alleges Blumenthal breached his duties as a Creso director in helping secure marketing and promotional contracts for Scholz and another party related to Everblu, at costs of more than $2 million and $1.2 million respectively.
The context: The first case management hearing has not yet been published by the Federal Court. Under a court-enforceable undertaking, Everblu will not offer any financial services to new clients and will apply for the cancellation of its Australian Financial Services Licence within eight weeks. Blumenthal has also undertaken to cease from offering financial services for five years and will be forced to re-train before returning to the industry. Creso now trades as Melodiol Global Health.
The source: ASIC Media Release
