Death-Spiral Whiz Kid Sason Sued by SEC for Stock Fraud (1)

Joshua Sason, a financier who made a fortune on penny stocks while he was in his 20s, was sued by the Securities and Exchange Commission for fraud.

Sason and his company Magna Group allegedly participated in elaborate schemes to illegally obtain free-trading shares of penny stock companies which it could quickly unload on individual investors, the SEC said Feb. 15. The transactions generated more than $25 million. The SEC also sued Magna’s former head of research and two other people involved in the deals.

“Magna Group and its co-defendants used fake debt instruments to unlawfully obtain shares in microcap companies, ...