SEC Obtains Judgment Against Jonathan Gilchrist
On August 15, 2013, the SEC obtained a summary judgment against Jonathan Gilchrist for violation of the antifraud and registration provisions of the federal securities laws. On August 16, 2013, the court entered a final judgment imposing monetary and other relief.
In rendering summary judgment in favor of the SEC, the court determined that Gilchrist, while acting as an officer and director of Alternative Energy Technology Center, Inc., then known as Mortgage Xpress, caused the issuance of six million company unregistered shares to himself and entities under his control.
According to the SEC, Gilchrist improperly maintained that the offer and sale of the shares were exempt from registration under Rule 504 of Regulation D of the Securities Act of 1933. The shares were immediately publicly sold by Gilchrist.
The Court determined that Rule 504 was not available because the company was a development stage company at the time of the sale in February 2008.
The Court also found that Gilchrist effected match trades of the company’s securities through brokerage accounts he controlled, thereby driving the per share price from $1.00 per share to $2.41 per share, at which point Gilchrist arranged for promoters to tout the company to further drive up the price to $3.75 per share. Gilchrist made unregistered sales of 229,661 shares, and generated illicit proceeds of $692,146.38.
The final judgment entered by the Court bars Gilchrist from serving as an officer or director of any company that is required to register its securities with the SEC, from acting as a broker or dealer, and from trading in stocks with a per share price less than five dollars. The final judgment also orders Gilchrist to pay the SEC $842,493.40 in disgorgement and prejudgment interest.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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