SEC Brings Actions Against Fifteen Unregistered Brokers for Their Participation in an IIIegal Offering of Microcap Securities

SEC Brings Actions Against Fifteen Unregistered Brokers for Their Participation in an IIIegal Offering of Microcap Securities

On April 9,2019, the SEC charged fifteen individuals with acting as unregistered brokers or aiding-and-abetting such activity in connection with Intertech Solutions, Inc.’s fraudulent and unregistered securities offerings.

The SEC’s complaints allege that Alexander Bevil, Richard Bohnsack, Daniel Broyles, Charles Davis, Michael Duke, Joel Duncan, Martin Lewis, Mark Parman, William Roth, Paula Saccomanno, Kenneth Shelton, Billy Ray Statham, Jr., Glenn Story, Dennis Swerdlen, and Harold Wasserman were hired by Intertech Solutions to engage in or facilitate cold-call solicitations of hundreds of prospective investors throughout the United States and Canada from at least February 2014 through December 2016. The complaints allege that, as a result of the defendants’ conduct, Intertech Solutions raised over $7 million from retail investors. According to the complaints, Intertech Solutions paid the defendants exorbitant commissions ranging from 35% to 50% of the funds provided by each investor. The complaints allege that the defendants did not disclose their commission rates to investors and instead distributed private placement memoranda that indicated that only 10% of investor proceeds would be used as commissions. The SEC previously charged Intertech Solutions and its control persons with orchestrating the fraudulent and unregistered offerings.

The SEC’s complaints, filed in federal district courts in Nevada, Texas, and Florida, charge the defendants with either direct or indirect violations of the broker-dealer registration provisions of Section 15(a)(1) of the Securities Exchange Act of 1934. Twelve of the defendants are also charged with the securities registration and antifraud provisions of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and one defendant is also charged with violating the securities registration provision of Section 5(a) and (c) of the Securities Act. Without admitting or denying the SEC’s allegations, eleven of the defendants have agreed to the entry of final judgments that enjoin them from violating these provisions, enjoin them from future solicitation of the purchase or sale of securities, impose penny stock bars, and order them to pay disgorgement of ill-gotten gains and civil monetary penalties. These settlements are subject to court approval.

The SEC appreciates the assistance of FINRA and various state, federal, and foreign authorities, including the British Columbia Securities Commission and the Cayman Islands Monetary Authority.

The SEC’s Office of Investor Education and Advocacy has issued an Investor Alert to encourage investors to check the background of anyone selling or offering them an investment using the free and simple search tool on Investor.gov.

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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