NY Lawyer Disbarred After Admitting Role in Stock Scheme
Darren Ofsink was one of a number of people indicted in 2015 over a so-called "pump-and-dump" scheme. His guilty plea to a conspiracy charge last year triggered an automatic disbarment.
October 29, 2018 at 02:48 PM
3 minute read
A New York lawyer who pleaded guilty last year to taking part in an $86 million pump-and-dump stock manipulation scheme has now been disbarred after a ruling from the New York Appellate Division, First Department.
The lawyer, Darren Ofsink of Merrick, New York, formerly headed a four-lawyer firm called Ofsink LLC in Manhattan. He was indicted in 2015 along with a pair of registered securities brokers as part of a criminal case that also targeted several other co-defendants. The U.S. Attorney's Office for the Eastern District of New York accused Ofsink and the others of engineering a reverse merger that turned CodeSmart Holdings Inc. into a publicly traded company and then manipulating CodeSmart's stock value.
“After gaining control of CodeSmart's 3 million purportedly unrestricted shares, the co-conspirators on two occasions fraudulently inflated CodeSmart's share price and trading volume and then sold their shares at a profit when the price reached desirable levels,” the U.S. Attorney's Office said in an October 2017 statement.
At a high point in July 2013, CodeSmart traded at $6.94 a share—valuing the company at more than $86 million, according to prosecutors. The same day, however, CodeSmart submitted a regulatory filing listing $7,600 in revenue and net losses of more than $103,000. By December 2013, the company's stock was trading at $0.01 per share.
Ofsink pleaded guilty on Oct. 18, 2017, to one count of conspiring to commit securities fraud. As part of the plea, he admitted to defrauding more than 10 victims and raking in some $292,409 in illicit profits from the stock manipulation scheme. A sentencing hearing has yet to be scheduled, according to court records.
In its disciplinary ruling, issued on Thursday, the First Department found that Ofsink's guilty plea to the crime triggered an automatic disbarment under New York judiciary law, retroactive to the date last year when Ofsink entered his plea. The ruling also notes that Ofsink “accepts full responsibility” and has expressed “remorse and contrition” for his conduct.
Contacted for comment on Monday, a defense lawyer for Ofsink in the criminal case, Christopher Bruno of Bruno & Degenhardt, referenced a letter that Ofsink sent to disciplinary authorities in New York. Ofsink indicated in the letter that he would not oppose his name being struck from the attorney rolls in the state.
“In the letter he also apologized for his conduct,” Bruno said. Ofsink represented himself in the disciplinary case.
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