Costa Mesa communications company Harrison Digicom Inc. said Friday it has been the victim of a stock manipulation scheme that cut its shares to less than half their original price.
Harrison, whose stock trades over-the-counter, said it put on hold a $1-million private placement when it discovered that a company taking part in the placement was using an offshore brokerage firm to dump the stock and drive down the price so it could be bought cheaply.
John Bush, president and chief executive of Harrison, declined to name the brokerage firm, the selling company or any of the other parties involved in the private placement, citing a fear of potential litigation.
Bush also said that Harrison has not notified the Securities and Exchange Commission about the alleged manipulation because it does not come under the SEC's reporting requirements. An SEC official said the agency was unaware of the allegations.