SEC Settles with Unregistered Public Shell Company Broker

On March 26, 2019 the SEC filed settled charges against recidivist James K. McKillop for acting as an unregistered broker and for failing to timely file required beneficial ownership forms in connection with his position at Tiber Creek Corp. The SEC also separately filed related settled administrative charges against Tiber Creek and Tiber Creek’s president, James M. Cassidy.

According to the SEC’s complaint and the SEC’s order, Tiber Creek maintained an inventory of SEC-registered public shell companies, for which James McKillop and James Cassidy served as the officers, directors, and fifty percent shareholders. The SEC alleges that since July 2012, James McKillop and James Cassidy effected securities transactions through Tiber Creek for more than 100 public shell companies without being registered as brokers. The complaint also alleges that on more than 110 occasions, James McKillop and James Cassidy failed to timely file required beneficial ownership reports, including Schedules 13G and Forms 4, in connection with the public shell companies.

Without admitting or denying the allegations in the complaint, James McKillop has consented to the entry of a final judgment permanently enjoining him from violating the reporting, registration, and beneficial ownership disclosure provisions of Sections 13(d), 15(a), and 16(a) of the Exchange Act, and Rules 13d-1, 16a-2, and 16a-3 thereunder, ordering him to pay disgorgement of $117,000, plus interest of $17,697, and a civil penalty of $75,000, and imposing a penny stock bar. Based on the allegations in the complaint, the SEC also filed an application seeking to enforce an administrative cease-and-desist order instituted against James McKillop in 2000. Without admitting or denying the allegations in the application, James McKillop has also consented to a district court order requiring him to comply with the cease-and-desist order.

Without admitting or denying the findings, Tiber Creek and James Cassidy consented to the entry of the SEC’s order, which finds that Tiber Creek and James Cassidy violated the registration provisions of Section 15(a) of the Exchange Act, and that James Cassidy violated the reporting and beneficial ownership disclosure provisions of Section 13(d) and Section 16(a) of the Exchange Act, and Rules 13d-1, 16a-2, and 16a-3 thereunder. The SEC’s order requires Tiber Creek and James Cassidy to pay, jointly and severally, $117,000 in disgorgement, $17,697 in prejudgment interest, and $75,000 in civil penalties, and imposes cease and desist orders, and associational and permanent penny stock bars. James Cassidy also agreed to be permanently suspended from appearing and practicing before the SEC as an attorney. The order prohibits James Cassidy from representing clients in SEC matters, including investigations, litigation, or examinations, and from advising clients about SEC filing obligations or content.

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.

Hamilton & Associates Law Group, P.A provides ongoing corporate and securities counsel to private companies and public companies listed and publicly traded on the Frankfurt Stock Exchange, London Stock Exchange, NASDAQ Stock Market, the NYSE MKT and OTC Markets. For two decades the Firm has served private and public companies and other market participants in SEC reporting requirements, corporate law matters, securities law and going public matters. The firm’s practice areas include, but are not limited to, forensic law and investigations, SEC investigations and SEC defense, corporate law matters, compliance with the Securities Act of 1933 securities offer and sale and registration statement requirements, including Regulation A/ Regulation A+ , private placement offerings under Regulation D including Rule 504 and Rule 506 and Regulation S and PIPE Transactions as well as registration statements on Forms S-1, Form F-1, Form S-8 and Form S-4; compliance with the reporting requirements of the Securities Exchange Act of 1934, including Form 8-A and Form 10 registration statements, reporting on Forms 10-Q, Form 10-K and Form 8-K, Form 6-K and SEC Schedule 14C Information and SEC Schedule 14A Proxy Statements; Regulation A / Regulation A+ offerings; all forms of going public transactions; mergers and acquisitions; applications to and compliance with the corporate governance requirements of national securities exchanges including NASDAQ and NYSE MKT and foreign listings; crowdfunding; corporate; and general contract and business transactions. The firm provides preparation of corporate documents and other transaction documents such as share purchase and exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. The firm prepares the necessary documentation and assists in completing the requirements of federal and state securities laws such as FINRA and DTC for Rule 15c2-11 / Form 211 trading applications, corporate name changes, reverse and forward splits, changes of domicile and other transactions. The firm represents clients in London, Dubai, India, Germany, India, France, Israel, Canada and throughout the U.S.