A U.S. District Court magistrate judge has ordered Copper King Mining Corp. and three men involved in promotion of its unregistered stock to pay $3.8 million to the Securities Exchange Commission.
Magistrate Judge Samuel Alba also ordered stock promoter Wilford R. Blum to pay an as yet-undetermined civil penalty. The defendants agreed to be permanently barred from participating in any future penny stock offerings or to engage in any other penny stock-related transactions and dealings.
As part of the settlement, the mining company and other defendants neither admitted nor denied the allegations in the civil lawsuit.
In June 2011, federal securities regulators sued the company, former President Mark D. Dotson and Blum over the sale of millions in unregistered company shares. The SEC alleged Dotson made false and misleading claims about the expected production of copper, silver and gold at the Beaver County mine before being ousted as president in March 2010.
To finance the operation, the company, Dotson and Blum offered to sell stock shares under a rule that allows sales of up to $1 million in a 12-month period. But regulators claimed Blum bought and sold far more shares through his company Alexander Lindale. Regulators claimed Blum raised $12.3 million selling the unregistered stock from 2008 to 2010; he turned over $9 million to Copper King.
The judgment also named former attorney Stephen G. Bennett.
Copper King Mining filed for Chapter 11 bankruptcy in May 2010.