SEC Settles Charges Against Joseph Saranello
On December 17, 2014, the Securities and Exchange Commission (the “SEC”) announced settled charges against Joseph Saranello who participated in a pump-and-dump scheme involving the stock of Rudy Nutrition. The SEC previously charged thirteen other individuals in the District of Nevada for engaging in this scheme to manipulate the stock of Rudy Nutrition that netted over $11 million in illicit profits.The SEC’s complaint against Joseph Saranello alleges that he set up phony Panamanian companies and opened brokerage accounts that he and others used in the scheme. According to the complaint, Saranello did so at the direction of Chad Smanjak, who sought to conceal his involvement in the scheme.
The complaint alleges that Saranello, Smanjak and others arranged for these companies to receive large blocks of purportedly unrestricted Rudy Nutrition stock. The complaint charges that Saranello, Smanjak and others then sold that stock to the public after participants in the scheme had artificially inflated the price and volume of Rudy Nutrition stock through fraudulent touting and manipulative trading.
The SEC’s complaint charges that Saranello violated Sections 5(a), 5(c), 17(a)(1) and 17(a)(3) of the Securities Act of 1933 (“Securities Act”), Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), and Rules 10b-5(a) and 10b-5(c) thereunder. To settle these charges, Saranello has agreed to a final judgment, subject to court approval, that permanently enjoins him from violating these provisions; bars him from participating in the offering of any penny stock in the future; and orders disgorgement of $60,000 and prejudgment interest of $2,953. No civil penalty is being imposed in light of Saranello’s cooperation with the Commission’s investigation. In a related criminal case, Saranello previously pleaded guilty to conspiracy to commit wire fraud and is awaiting sentencing. See U.S. v. Joseph Saranello, Crim. Action No. 10-63-JVS.
Additionally, on November 12, 2014, the court entered a default final judgment against defendant Pawel P. Dynkowski, who is a fugitive, for his role in the Rudy Nutrition scheme. The final judgment against Dynkowski enjoins him from violating Securities Act Sections 5 and 17, Exchange Act Section 10(b) and Rule 10b-5; bars him from participating in the offering of any penny stocks in the future; orders disgorgement in the amount of $2,010,286 and prejudgment interest in the amount of $467,308.88; and orders a civil penalty in the amount of $2,010,286.
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, or by email at [email protected]yer101.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 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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Brenda Hamilton, Securities Attorney
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