The former chief operating officer of a Davis natural pesticides company has been arrested and charged with 16 counts of securities fraud, wire fraud and mail fraud.
Hector Absi is charged with artificially inflating Marrone Bio Innovations sales and revenues from 2013 to 2014 to increase the value of the company's stock.
Tom Osborne is with the Saramento field division of the Federal Bureau of Investigation.
He says Absi sold shares for $17/share at a profit of $200,000.
"You know, certainly, we think securities fraud happens typically only on Wall Street. This case certainly highlights that it can occur on any jurisdiction at any given time."
When investors learned the company's revenues had been artificially inflated, the stock plummeted. It is currently worth about a dollar.
Marrone is the defendant in 11 lawsuits filed by investors.
One of Absi's co-workers, Julieta Favela Barcenas, was also charged, but has settled her case and is cooperating with the investigation.
Also cooperating is Marrone Bio -which has been charged with fraud and internal-control and books-and-record violations by the Securities and Exchange Commission.
The company has agreed to pay a $1.7million fine to settle the case.
The company's current CEO Pamela Marrone and former CFO Donald Glidewell have agreed to return any bonuses they received as a result of Absi's actions. They have not been charged with any wrongdoing.