A federal judge has ordered Michael J. Forster to pay $144,320 in disgorgement and $12,040 in prejudgment interest for his role in a pump-and-dump scheme involving Cuba Beverage Company stock. The SEC filed the original complaint in May 2022, and the final consent judgment was entered on July 13, 2026, concluding a four-year enforcement effort.
What happened
The Securities and Exchange Commission charged Forster with violating Section 9(a)(2) of the Securities Exchange Act of 1934, which prohibits market manipulation. He was also charged with violating Section 10(b) and Rule 10b-5, the antifraud provisions that form the backbone of federal securities law.
Additionally, the SEC charged Forster with violating Section 17(a) of the Securities Act of 1933, which addresses fraud in the offer or sale of securities. The complaint alleged that Forster controlled Cuba Beverage Company, conducted manipulative trading in its stock, and promoted the shares to retail investors between February and August 2012.
Key facts
| Item | Amount |
|---|---|
| Disgorgement ordered | $144,320 |
| Prejudgment interest | $12,040 |
| Total financial remedy | $156,360 |
| Scheme period | February–August 2012 |
| SEC complaint filed | May 4, 2022 |
| Final judgment entered | July 13, 2026 |
Cuba Beverage Company impact
Forster allegedly controlled Cuba Beverage Company, a publicly traded issuer, and used that control to manipulate the stock price. The SEC said he engaged in manipulative trading and promoted the stock to retail investors as part of the pump phase of the scheme.
After inflating the stock price through these promotional activities, Forster allegedly sold his own shares into the inflated market. The SEC alleged he netted $144,320 from these sales during the six-month scheme period.
The parallel criminal case, United States v. Forster, was filed in the Southern District of California as case number 20-cr-325. The disgorgement and prejudgment interest ordered in the civil case were deemed satisfied by an order of forfeiture in the criminal proceeding.
What investors should do
Pump-and-dump schemes remain a persistent threat to retail investors. The SEC’s complaint emphasized that Forster targeted retail buyers with promotional materials while simultaneously planning to sell his own holdings.
Investors should be wary of stocks that experience sudden promotional campaigns without corresponding business developments. The SEC encourages investors to verify claims through independent research and official filings before making investment decisions.
How to recover your losses
Investors who purchased Cuba Beverage Company stock during the scheme period may have claims for recovery. The SEC’s civil judgment establishes the factual basis for investor claims, and private securities litigation may provide additional avenues for compensation.
Affected investors should review their trading records, account statements, and any communications they received about the stock. Documenting the timing of purchases and the source of any recommendations is critical for building a recovery case.
Haselkorn & Thibaut fights for investor recovery
Haselkorn & Thibaut is a securities law firm founded by former Wall Street defense attorneys who shifted their practice to represent investors. The firm has recovered over $520 million for clients in securities matters and maintains a 98 percent success rate in resolved nontraded REIT cases. Attorneys are AV Preeminent rated through Martindale-Hubbell, designated as Super Lawyers, and hold a 5.0-star client review average. The firm operates on a contingency basis — no recovery, no fee.
Contact Haselkorn & Thibaut today
Time matters in recovery cases. The earlier you act, the stronger your position. The firm offers a free case evaluation to assess your losses, review your account history, and explain your options under arbitration or settlement.
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This article is for informational purposes only and does not constitute legal advice. Investors should consult a qualified securities attorney to discuss their specific situation.
