Cane’s Futile Last-Ditch Efforts Before Trial


With most of Kyleen Cane’s motions to sever her trial and dismiss counts against her denied, it seems she’s running out of options.

Involved in a scheme to manipulate trading in four microcap stocks between October 2012 and July 2014, trading patterns resembling illegal pump and dump strategies, Kyleen Cane and her associates’ backs are against the wall with time running out as the trial date nears.

Cane has submitted several last-ditch efforts to help in her case, including objecting to details of prior business dealings between Discala and Cane (citing an attorney-client relationship), arguing that the manipulation patterns of stock from other companies is irrelevant, denying that her direction of trading Cubed (one of the microcap companies) stock was legal, arguing for the admittion of additional intercepted calls and texts to paint the narrative her way, and wanting certain witness testimonies excluded, arguing they are mini-trials against her.


Despite her desperate tactics, the mountain of evidence weighs heavily against her, from her incriminating text messages and calls to her use of escrow accounts to misrepresent stock to her history of manipulating the stock price and volume of other companies not part of this case.

Cane’s best hope now is jury selection, of which she hopes her proposed questionnaire will help her get a favorable jury. Of note is the request for the addition of a question asking if the potential juror has had any prior negative experiences with an attorney (such as Cane) that would affect their ability to hear the case.

Even Cane knows dealing with attorneys like herself would leave a bad taste in people’s mouths.

Cane and her co-defendants go to trial on April 2nd, 2018.

Cane Seeks to Sever Her Trial From Co-Defendants

Cane’s lawyers filed a pretrial motion on September 15th to, among other things, have her trial severed from her co-defendants, arguing that defendants DiScala and Josephberg are allegedly involved in four pump and dump schemes while Cane is only involved with one.

Referencing a Supreme Court case, Zafiro v. United States, Cane’s attorneys cited Rule 14 of the Federal Rules of Criminal Procedure to justify severing her trial:

If the joinder of offenses or defendants in an indictment…appears to prejudice a defendant or the government, the court may order separate trials of counts, sever the defendants’ trials, or provide any other relief that justice requires.

Cane’s camp further contends that most evidence used against DiScala and Josephberg would be irrelevant at her own individual trial, not to mention that DiScala and Cane will “blame the other for at least part of the allegations contained in the indictment…each will effectively act as a second prosecutor at a joint trial.”

In addition to calling for the sever to undermine the arguments against her, she has also asked for the dismissal of the counts against her, stating they are duplicitous. These counts include 1) Conspiracy to Defraud the United States; 2) Attempt and Conspiracy to Commit Mail Fraud; and 4) Manipulative and Deceptive Devices. The counts are felony-level offenses.

Cane is currently in Nevada and required to give 24 hours’ notice before leaving the state. She is due to appear in court on 12/8/2017.

TERI BUHL's Blog Update. Feds Finally Arrest DiScala’s Microcap Attorney Ofsink

Attorney Ofsink, another co-conspirator in the pump-and-dump scheme with attorney Kyleen E. Cane.
TERI BUHL’s Blog Update.

Cane Connected To Yet Another Pump and Dump Scheme – And This Time, It’s Political


“I’ve never seen a super PAC used to promote a penny stock.”

In the era of super PACs, where an unlimited of money can be spent to campaign for or against political figures and policies, loose regulation and lack of oversight can make it a lucrative enterprise if abused just the right way.

And no one knows how to abuse the system better than Kyleen Cane.

As reported by ProPublica, a publically-traded company called CrossClick Media had been awarded a contract by a super PAC known as, “Voters For Hillary” to run call centers and provide other services for Hillary Clinton’s campaign. CrossClick (XCLK) stock, initially trading at a hundredth of a penny, soared in the OTC markets following the announcement, its price going up as much as twelve-fold. Anyone selling at peaks would’ve made a tidy profit, which indeed happened multiple times.

But as ProPublica investigated deeper into the relationships between CrossClick and Voters For Hillary, they discovered questionable relationships and spending habits (or lack thereof). It turned out that the majority shareholder for CrossClick is married to the chairman of Voters for Hillary, and that the super PAC has not spent one dime supporting Secretary Clinton’s campaign.

What’s interesting is the money loaned to Voters for Hillary. Some of the lenders, contributing sums up to $250,000, were also registered Republicans. Among the lenders was Kyleen Cane herself, who lent $10,700 of her own money.

Billions of CrossClick’s shares were outstanding by mid 2015, its price history resembling a sharp mountain ridge with steep drop-offs, a sure sign of pumping and dumping. Sadly, the names of whoever made a profit from dumping CrossClick’s shares will never be known as they are not public if trades contain less than 10% of total shares or the seller isn’t a senior officer.

But knowing her history, it’s very likely that Cane was one of those profiteers.

TERI BUHL's Blog Update. The Seedy World of Microcap Stock Advisors

TERI BUHL’s Blog Update. Republished here.

UPDATE March 6th 2015: AJ Discala’s trading partner at OmniView Capital has thrown in the towel. Marc E. Wexler who was charged on multiple counts of securities fraud plead guilty to two felony charges on October 15th and agreed to pay a forfeiture bond of $1.4 million. Wexler who lives in Colts Neck New Jersey plead to conspiracy to commit securities fraud and securities fraud in the stock CodeSmart ($ITEN). The DOJ’s original complaint said they believed Wexler had made $2.2 million in manipulative trading of CodeSmart. Sentencing appears to be held in Wexler’s case as it is possible he is turned government witness against his partner AJ Discala. Discala switched criminal lawyers a few months ago hiring New York-based Charles A. Ross. AJ and his fellow co-defendants are still slugging through motions for discovery and fighting the DOJ charges. Ex-SEC enforcement attorney Tom Sporkin who ran the microcap fraud unit is also helping Discala on the case. Sporkin is now a white-collar defense lawyer for Buckley Sandler in Washington D.C. The SEC parallel case was stayed in mid-November, which is typical when the DOJ leads on criminal charges. If convicted Discala faces years in prison. AJ told this reporter he will fight the case to trial.

Original Article Sep 18,2014
The CEO of a merchant bank that helped fund dozens of micro-cap companies claims he is a target of regulatory overreach after he was indicted in late July on ten counts of criminal misconduct for his alleged role in pump and dump stock schemes. Abraxas J. Discala (known as A.J.), CEO of Connecticut-based OmniView Capital Advisors, was arrested while on business in Las Vegas in July after the Justice Department revealed what appeared to the DOJ to be damaging wiretaps labeling him as a ringleader who tried to manipulate the price of penny stocks and mislead investors about financials in public companies. The DOJ used Discala’s status as the ex-husband of an actress to get their arrest splashed across international headlines in a move to show Obama’s task force on financial fraud is finally arresting Wall Streeters. But a look inside the deal documents show the Justice Department doesn’t know who the bad actors really are in this case. This reporter was given exclusive access to deal contracts, executive’s emails, and conducted interviews with some of the players involved in one of the alleged stock frauds called CodeSmart ($ITEN). The case shows a unique look at the backroom deals made to help small entrepreneurial companies raise capital through alternate public offerings and highlights the questionable tactics microcap advisors use to get discounted free trading stock.

AJ DiScala Co-Conspirator admits they did illegal trades in Microcap Fraud Ring –


Included here…

UPDATE 8.8.16– Court records show Goodrich was ordered to pay only $3,938 in forfeiture fines for his role in the manipulation of a stock called Cubed. He is still waiting to be sentenced.

Original Text

A So-Cal stock broker admitted to aiding in the pump and dump of penny stock Cubed with accused microcap fraudster AJ DiScala last week. Darren C. Goodrich, 37-year-old head trader at BMA Securities, plead guilty in Brooklyn federal court on June 27th to one count of conspiracy to commit securities fraud for his role in artificially controlling the price and volume of Cubed shares through fraudulent concealment of AJ’s crew’s ownership interest in the stock and engineering price movements through wash and match trades. The charge caries a 5 year max jail term plus criminal forfeiture of assets through fines and restitution. Goodrich was arrested on multiple counts of securities and wire fraud on November 2, 2015 with the possibility of over 20 years in jail.
reported extensively since 2014 on the alleged pump and dump stock schemes the DOJ thinks AJ DiScala led with New York-based attorney Darren Ofsink and Nevada-based attorney Kyleen Cane. All three are still fighting the charges with plans to go to trial. The DOJ has now secured four guilty pleas from DiScala’s crew of co-conspirators, which included his investment banking partner at OmniView Marc Wexler, who are presumable now helping the DOJ with their case. The DOJ says Goodrich only acted illegally in the manipulation of one of four stocks in their complaint.

According to FINRA records Goodrich was a licensed investment advisor and broker for 14 years. He spent most of his career as a broker for Burt Martin Arnold who founded El Segundo-based broker-dealer BMA Securities. The broker dealer has multiple FINRA enforcement actions, fines and sanctions against them. On November 11th, 2104 the broker dealer, Goodrich, and Arnold were charged by their regulator for failure to supervise deficiencies regarding sales of unregistered securities, failure of duty to conduct a reasonable inquiry into the issuance of large blacks of stock to only a few clients who sold millions of shares just six days after being issued the free trading shares. The manipulation of Cubed occurred between March-July 2014. The FINRA charges don’t say which microcap stock these charges are for but they sound very familiar to how the DOJ described the Cubed manipulation in their complaint against Goodrich a year later. Goodrich and Arnold (who was not charged by the DOJ) were suspended by FINRA for 30 days and broker dealer had to pay a hefty fine of $325,000. Goodrich left BMA Securities a month before he was arrested.

Goodrich’s plea deal causes new headaches for attorney Kyleen Cane. She is alleged to have been the thought leader behind their shares into escrow account scheme. According to DiScala, who I first interviewed in September 2014, Cane came up with the idea that the mom and pop investors, who brokers like Goodrich would convince to buy Cubed’s stock, would have their shares deposited in an escrow account for the first six months to a year to make sure their wasn’t a rush to dump the stock of the newly reverse merged company–this included AJ’s own shares he said he agreed to have put in escrow in an effort to support the newly traded stock. The DOJ says unbeknownst to investors Cane, who controlled the shares going in and out of escrow accounts, released millions of the shares, that were suppose to be restricted, to dummy nominee accounts that AJ and his co-conspirator brokers controlled. And those shares are what aided in creating a false impression there was a buying and selling in the stock to make a market and increase the share price. Cane in her legal motions denies her leadership role in the escrow scheme. But with Goodrich now pleading in open court that Cane told him how she was doing the scheme there is new strong evidence against her. This is on top of the wire taps that DOJ has of AJ and Darren talking about Cane’s scheme.

Cane was formerly a man named Michael Cane, according to bar records. She has filed some aggressive litigation in Stamford and Las Vegas state courts against some of the investor deal finders in Cubed who were not arrested named Max Kahn and Michael Caridi. She throws out the notion that Kahn and Caridi are two of the confidential witnesses the DOJ doesn’t name in their original charges in her complaint. According to Kahn and Caridi’s attorney at Anderson Kill this claim is ‘absurd’. But whoever got the DOJ’s attention to bring to case and ask for wire taps of AJ’s cell phone is still unknown.

Goodrich is still out on bail, his father an LA-based litigator Brenton Foster Goodrich put up $250,000 for his son’s million dollar bond and his wife Mindy Goodrich put their amazing ocean view home as collateral. There is no date set for his sentencing yet as I am sure the DOJ will wait till the DiScala case is concluded. Goodrich, who grew up in the Palos Verde section of L.A.’s southbay, was forced to sale his family home for $6.15 million in May. You can see a sales video tour of the beautiful 5 bedroom, five bath modern home here. I am assuming the house was sold to help pay legal fees and upcoming restitution.
Goodrich and BMA Securities did not return a call for comment. I reached out to AJ’s attorneys about Goodrich saying ‘AJ’s guilty’ but they did not return an email for comment.

Kyleen E. Cane's Possible Connection to the Panama Papers

In the recent weeks, news of the so-called “Panama Papers,” a leak containing documents listing the financial details of thousands of offshore companies, has been circulating around the media sphere. Big names, including Russian president Vladimir Putin, British Prime Minister David Cameron, and Argentine superstar footballer Lionel Messi, have been found among the documents, and while the ownership of offshore business entities isn’t illegal in itself, some of these entities listed are shell corporations likely involved in fraud.

Shell corporations…sound familiar?

Details from the papers are still surfacing, but it remains a fact that Kyleen Cane and her firm, Cane Clark, LLP, once did business with former Panamanian President Ricardo Martinelli, now hiding in Florida as a fugitive from the Panamanian government for corruption. Martinelli, through his brokerage, Financial Pacific (which he is the primary beneficiary of), transferred $50,000 to Cane Clark, LLP on February 1st, 2010 and another $50,000 on April 23rd of that same year. Given Cane’s current charges for securities fraud and Martinelli’s history of graft, one can only imagine where those funds were going, but the transfer in itself was illegal, as Panama law prohibits sending money to unidentified third parties.

The question remains: is there a deeper connection to other names and entities in the Panama Papers? We shall find out when the papers are released in early May.

As for Cane’s case, prosecutors are currently undergoing re-discovery (against Cane’s wishes) and combing through over 44,000 documents on her smartphone for evidence, which could be as damning as anything found in the Panama Papers.


Feds Hand Down Superseding Indictment to Cane and Her Co-defendants.

Superseding Indictment Against Kyleen Cane


On November 2nd, 2015, the Feds filed a Superseding Indictment against Cane and her co-defendants including among other charges conspiracy to commit mail and wire fraud.  The update to the indictment mainly included 3 additional professionals, who were also arrested.  The complexity, scope, and pervasive corruption of lawyers and brokers is par for the course of a fraud involving Kyleen Cane.   (20151102 US v Cane Information Sheet20151102 Application for Leave to File Document Under Seal20151102 Superseding Indictment US v Cane Case No. 14-cr-00399-ENV20151104 US v Cane Unsealing Order Superceding Indictment) On November 4th, the complaint was unsealed and on November 20th, new defendants arrested, old defendants were again arraigned and plead not guilty. (20151120 US v Cane Superceding Indictment Arraignment & Status Conference) Three defendants Marc Wexler, Matthew Bell, and Victor Azrak have already plead guilty (obviously  cooperating) and are awaiting sentencing.

An overview of the schemes and defendants is also discussed in the FBI Press Release. Another article also covering the additional arrests of another attorney and registered brokers can be found here.

Page 6 of the Superseding Indictment provided an overview of the conspiracy to commit securities fraud and the schemes the defendants employed: “In or about and between October 2012 and July 2014, the defendants ABRAXAS J. DISCALA, also known as “AJ Discala,” IRA SHAPIRO, CRAIG JOSEPHBERG, also known as “Jobo,” KYLEEN CANE, DARREN GOODRICH, DARREN OFSINK and MICHAEL MORRIS, together with others, agreed to defraud investors and potential investors in CodeSmart, Cubed, StarStream and Staffing Group (collectively, the “Manipulated Public Companies”) by artificially controlling the price and volume of traded shares in the Manipulated Public Companies through, inter alia: (a) false and misleading press releases; (b) false and misleading SEC filings; ( c) fraudulent concealment of the defendants’ and their co-conspirators’ beneficial ownership; (d) engineering price movements and trading volume in the stocks; and ( e) unauthorized purchases of stock in accounts of unwitting investors.” 20151102 Superseding Indictment US v Cane Case No. 14-cr-00399-ENV

Page 16 of the Superseding Indictment briefly cited Cane’s role in one of the schemes, “During four telephone calls that day, May 23, 2014, the defendant ABRAXAS J. DISCALA’s, also known as “AJ Discala,” control of the price of Cubed’s stock is apparent. During a telephone call that morning, DISCALA and the defendant KYLEEN CANE discussed the jump in Cubed’s price to $7 per share, and CANE stated, in part, “We need to keep it back down now. We need to keep it back down.” Later that day, during a telephone call between DISCALA and Co-Conspirator 2, DISCALA stated, in part, “I talked to Kyleen [CANE], and we, we don’t want this. We would want 6.35 today, 6.30, something like that, and then let, let news rip it next week.” DISCALA also called Co-Conspirator 3, a corrupt investor whose identity is known to the Grand Jury, to explain the trading in Cubed’s share price, and stated, in part, “Yeah like .. .it just looks stupid! It went up, and up, and then it came back, you know-it’s like, look, if we ended at 6.30, we’re good. I wanna bring it back up to 6.55; 6.55 on Tuesday, which I can, with some news, right? And just keep stepping it.” Finally, during a telephone call with the defendant DARREN GOODRICH, DISCALA stated, “So Kyle’s [CANE] re-tweaking this thing to 6.35, I just wanted to let you know.” 20151102 Superseding Indictment US v Cane Case No. 14-cr-00399-ENV

Will Kyleen Cane run? Will she go to trial? Will she commit suicide? Will she plea? It’s anyone’s guess.