The men were accused of inflating the stock price of Conversion Solution Holdings by giving company investors false financial statements, the U.S. Attorney’s office said. The men then transferred CSHC stock to family members, who sold it on the open market at inflated prices.
“This was a classic stock ‘pump-and-dump’ scheme,” U.S. Attorney Sally Quillian Yates said.
Harris was found guilty on eight counts, including falsely certifying CSHC’s annual filing to the U.S. Securities and Exchange Commission.
He and Stanley could face up to 25 years in prison and a fine of up to $250,000 for each of the securities, conspiracy and wire fraud charges. Harris faces additional time for his other charges.
Horton faces up to five years in prison and a fine of up to $250,000.
The SEC filed a complaint against Harris in 2006 for inflating CSHC’s stock by giving the commission false financial statements as well as issuing fraudulent press releases. A U.S. District Court judge issued penalties of $1.2 million and $250,000 against Harris and barred him from being an officer or a director of a publicly traded company for seven years.