Product Details
CompanyCapt. Crab, Inc.Certificate TypeCommon StockDate IssuedSeptember 19, 1983CanceledYesPrinterAce Industries, Inc. of MiamiSignaturesMachine printedApproximate Size12" (w) by 8" (h)ImagesShow the exact certificate you will receiveGuaranteed AuthenticYesAdditional DetailsNA
Historical Context
Capt. Crab, Inc. was incorporated in Florida in 1976 as the franchisor of Capt. Crab's Take-Away, a small chain of seafood restaurants primarily located in the Sunshine State.
In 1986, the company was charged by the SEC in relation to a stock manipulation scheme. According to the SEC complaint, which was filed in U.S. District Court in Illinois, Capt. Crab. and its chairman, Edward Scharps, made false statements and projections about the firm's prospects ''to condition the market for Capt. Crab securities'' from March, 1982, to June, 1982. The complaint also charged that Capt. Crab, Scharps, Rooney Pace and others participated in a scheme to manipulate the market price of Capt. Crab`s stock from October, 1982, through September, 1983.
Among the charges, the SEC claimed that Scharps and Rooney Pace, which created a market in Crab stock, artificially increased the stock's market price by publishing false and misleading statements about the company's prospects. The same information was later used to induce brokers to buy Crab shares and, at a later time, keep the stock price artificially high, the SEC said. Specifically, before the first public offering, Scharps and Capt. Crab made numerous claims that the company planned to build 25 restaurants after the initial public offering was complete. In addition, sales of $1 million to $1.5 million were projected for each unit. But the SEC said the estimates were misleading since only nine restaurants were originally planned, and the projected revenues were based on the results of the first few months of operations for Capt. Crab's only unit.
As a result of the alleged manipulative activity, the bid price for Crab's stock rose to $8.37 in September, 1983, from $1.62 in October, 1982, the SEC said. The SEC said Scharps profited $3.8 million. Pace, meanwhile, allegedly received $250,000 in trading profits, while Joseph Lugo, a Pace broker, received $800,000 in commissions tied to trading in Capt. Crab and Crab House, one of its affiliates. Lewis Leeds, a Miami stockbroker, was charged with profiting $700,000. As a penalty, the SEC wants Scharps and the others to give up their profits, and refrain from trading in Capt. Crab stock.
Capt. Crab later entered a consent agreement with the SEC without admitting or denying guilt.
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