Christopher S. Knight

ChapmanAlbin LLC brings another critical update to investors regarding a recent administrative proceeding by the Securities and Exchange Commission (SEC). Christopher S. Knight, co-owner of Program Funding Advisors, LLC (PFA), has been barred from participating in any penny stock offerings after admitting to engaging in multiple fraudulent schemes. Knight’s actions have led to significant financial harm for investors and highlight the risks associated with penny stock investments.

Background of the Case

The SEC’s investigation revealed that Knight and PFA, a Delaware-based company advising businesses on stock promotion, were involved in fraudulent activities related to penny stock offerings from 2012 to 2019. These included:

• Mainstream Entertainment, Inc. (MSEI)
• Resort Savers, Inc. (RSSV)
• Axiom Holdings, Inc. (AIOM)
• Union Bridge Holdings, Ltd. (UGHL)
• Virtual Medical International, Inc. (QEBR)

Knight pled guilty to several counts of securities fraud, wire fraud, and conspiracy to commit fraud, which included defrauding investors, paying undisclosed commissions, and artificially inflating stock values to enrich himself and his co-conspirators.

The Fraudulent Schemes

According to the SEC and federal prosecutors, Knight’s fraudulent activities involved:

1. Pump-and-Dump Schemes: Knight and his associates artificially inflated the value of stocks through deceptive promotions and then sold their shares at inflated prices, leaving investors with worthless securities.
2. Undisclosed Commissions: Investors were unaware that Knight and his co-conspirators were paying substantial kickbacks to promoters to induce stock purchases. For example:
   • A co-conspirator received nearly $1 million from MSEI stock sales, sending significant portions to Knight-controlled entities.
   • Knight and his partners profited from nearly $1.5 million in kickbacks related to MSEI stock transactions.
3. Cold-Calling Investors: Knight paid undisclosed commissions to co-conspirators who used high-pressure tactics to convince unsuspecting investors to purchase manipulated stocks.
4. Long-Term Manipulation: From 2015 to 2019, Knight and his team engaged in systematic fraud involving multiple companies, manipulating their stock prices for personal gain.

SEC Sanctions

As a result of these egregious violations, the SEC imposed the following sanctions under Section 15(b) of the Securities Exchange Act of 1934:

• Permanent Penny Stock Bar: Knight is prohibited from participating in any activities related to penny stocks, including promotion, issuance, or trading.
• Investor Protection: This measure aims to prevent Knight from causing further harm to investors.

Lessons for Investors

The case against Christopher S. Knight underscores the risks of penny stock investments and the importance of due diligence. Investors should:

• Be cautious of high-pressure sales tactics and unsolicited investment offers.
• Research the backgrounds of investment advisers and companies.
• Look out for red flags, such as guaranteed returns or vague business descriptions.

How ChapmanAlbin Can Help

If you have invested in penny stocks promoted by Christopher S. Knight, PFA, or related entities and experienced financial losses, ChapmanAlbin LLC can help. Our experienced attorneys specialize in securities fraud cases and are committed to helping investors recover their losses.

Contact us today for a free case evaluation. Our team will work to hold bad actors accountable and protect your financial future.

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