In its press release, the SEC said that three men, identified as Peter L. Coker Sr., Peter L. Coker Jr., and James T. Patten, were charged with “orchestrating fraudulent manipulative securities trading schemes.”

“These schemes included artificially inflating the share price of Hometown International, which operated a New Jersey deli producing less than $40,000 in annual revenue, from approximately $1 per share in October 2019 to nearly $14 per share by April 2021, leading to a grossly inflated market capitalization of $100 million,” the press release said.

According to the SEC, the three men gained control of the Hometown International shares, as well as the shares of a separate shell company, identified as E-Waste Corp. The three then “artificially inflated the price of both issuers’ stock through manipulative trading.”

The three men intended to dump their shares at higher valuations, however, the SEC said that “before the defendants were able to reap the intended profits of the schemes, as alleged, numerous news articles were published discussing the issuers’ inflated stock prices.”

Last April, CNBC reported that the deli had a value of $100 million, but filings with the SEC showed that it only reported sales of $35,748 in two years combined from 2019 and 2020.

Meanwhile, the news outlet also reported last April that hedge fund manager David Einhorn warned of the risks associated with the deli in a letter to investors saying “someone pointed us to Hometown International (HWIN), which owns a single deli in rural New Jersey…HWIN reached a market cap of $113 million on February 8. The largest shareholder is also the CEO/CFO/Treasurer and a Director, who also happens to be the wrestling coach of the high school next door to the deli. The pastrami must be amazing.”

The SEC said in its Monday press release that the three men are being charged with “violations of the antifraud provisions of the securities laws.” Additionally, Patten was charged with “violating market manipulation provisions,” while Coker Sr. and Coker Jr. are also charged for helping Patten with the violations.

Scott A. Thompson, Associate Director of Enforcement in the Philadelphia Regional Office with the SEC said, “We allege that the defendants’ brazen schemes resulted in the artificial inflation of the stock price of two publicly traded companies with little to no annual revenues.”

In addition to the charges filed by the SEC, the U.S. Attorney’s Office in New Jersey also filed criminal charges against the three men. In a press release, the attorney’s office said that the men were charged in a 12-count indictment “with conspiracy to commit securities fraud, securities fraud, and conspiracy to manipulate securities prices.”

The SEC declined to make any further comments after Newsweek reached out.