Coleman Flaherty of Hingham has been charged by federal prosecutors with participating in a conspiracy to defraud investors in a Boston-based ticket broker.
HINGHAM – A Hingham stock promoter and two others have been charged with defrauding investors in a Boston-based ticket broker.
Coleman Flaherty of Hingham was charged with conspiracy, securities fraud and wire fraud.
The charges were announced by U.S. Attorney Carmen Ortiz and Vincent Lisi, special agent in charge of the Boston office of the FBI.
Charged along with Flaherty was stock promoter Thomas Brazil of Topsfield and Richard Weed, 52, a partner in a Newport Beach, Calif., law practice.
The three are also facing legal action by the Securities and Exchange Commission, including seeking what regulators say are illicit proceeds of $3 million, plus interest and penalties.
According to the complaint, the three conspired to create the appearance that CitySide Tickets was a growing company when it was in dire financial straits.
Weed, the firm’s secretary and one of its two board members, also helped his co-conspirators obtain free trading stock, which was sold at artificially high prices, authorities allege.
“CitySide was billed as the hottest ticket in town and investors were encouraged to get in the game when the playing field was actually tilted against them,” said Paul Levenson, director of the SEC’s Boston regional office.
The charges follow a multi-year investigation into fraud in the so-called “penny stock” markets, publicly traded companies whose stocks trade at pennies per share.