Those must’ve been some good sandwiches

Three men, including a father-and-son duo, were charged with fraud and other crimes by federal prosecutors yesterday for orchestrating a market manipulation scheme that led to a tiny New Jersey deli having a $123 million market cap as recently as last year.

🥪📈 Background: Your Hometown Deli, which closed its doors earlier this year, did $35,000 in sales across 2020 and 2021 combined. Yet somehow the deli’s holding company, Hometown International, saw its stock nearly quadruple to reach a market cap north of $100 million over that same period – which is odd, considering the deli-in-question was the only operating business in its entire portfolio.

🤔 What (allegedly) happened?... Federal prosecutors say one of the men convinced the owners of Your Hometown Deli to create a parent company, Hometown International, around 2014.

• Unbeknownst to the owners, the man and his two associates allegedly gained control of Hometown International in 2019, then illegally drove up its share price alongside that of another shell company they controlled.
• All in all, Hometown International’s stock was boosted by 939% – while the second shell company’s stock rose nearly 20,000%.

👀 Looking ahead… The three defendants could face maximum prison sentences of 20+ years apiece if convicted, as well as fines of at least $5 million.