Christopher R. Esposito Charged with Securities Fraud

MagnaChip - Fraud

On January 7, 2022, Christopher R. Esposito, 55, of Everett, was charged and has agreed to plead guilty to one count of securities fraud.

Esposito, the sole officer and director of Massachusetts marketing firm Code2Action Inc, was charged in connection with misappropriating tens of thousands of dollars of investor funds to pay his personal expenses.

According to court filings, between August 2019 and February 2020, Esposito allegedly sold Code2Action shares to existing shareholders at sub-penny prices based on material misstatements and omissions and then misappropriated much of the proceeds. Specifically, it is alleged that Esposito deliberately misled prospective investors about, among other things, Code2Action’s plan and ability to complete a reverse merger, which Esposito touted would enable the investors to sell their shares at a profit.

It is further alleged that Esposito misappropriated over $57,000 to pay his personal expenses and failed to disclose to prospective investors, among other things, that the U.S. Securities and Exchange Commission had previously obtained a final judgment against him for committing securities fraud and barred him from certain securities-related activities. 

Esposito was charged by the SEC on May 26, 2016, along with three other individuals and two companies, for their roles in conducting a scheme to defraud investors by misappropriating investors funds and by concealing the ownership and control of a publicly-traded company, Cannabiz Mobile, Inc, in order to enrich themselves by colluding in the sale of hundreds of millions of shares into the public market, in violation of SEC statutes and regulations.

The SEC’s complaint, filed in federal court in Boston, Massachusetts on May 26, 2016, charged Lionshare Ventures LLC and its owner, Christopher Esposito, with allegedly raising more than $550,000 in investor funds in an unregistered offering of Lionshare securities and misappropriating $375,000 for his personal benefit.

According to the SEC’s complaint, Esposito and Lionshare raised the funds from investors between June 2011 and June 2012, spending almost $300,000 of investor funds for personal expenses, and using $75,000 of investor funds to acquire control of a Massachusetts-based publicly-traded company, Cannabiz Mobile, Inc., by purchasing all of its convertible debt.

The SEC’s complaint further alleged that, between May 2012 and August 2015, Esposito and Lionshare, together with Anthony Jay Pignatello of Manhattan Beach, California, concealed Esposito and Lionshare’s de facto control of Cannabiz and a large percentage of Cannabiz’s securities in order to profit by evading SEC Rule 144, which limits securities sales by affiliates, such as control persons. Esposito and Lionshare allegedly did this by, among other things, installing James Gondolfe as the sole officer and director of Cannabiz – even though Esposito secretly controlled the company – to make false statements in Cannabiz’s public filings and other documents.

Esposito then paid third-party stock promoters to tout Cannabiz stock in order to increase its stock price and trading volume; he sold significant amounts of Cannabiz convertible debt to others for almost $304,000; and with Pignatello and Renee Galizio of Loxahatchee, Florida, sold millions of shares of Cannabiz stock directly into the public market.

A final judgment was entered against Lionshare on April 17, 2017. 

A final judgment was entered against Esposito by default on April 30, 2018. The judgment ordered Esposito to pay, on a joint and several basis with Lionshare, disgorgement and pre-judgment interest in the total amount of $1,107,413 and a civil penalty of $160,000. Additionally, the final judgment against Esposito barred him from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act and permanently barred him from participating in an offering of a penny stock.

The charge in the new securities fraud case provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $5 million. 

The Court has not yet scheduled a plea hearing.


For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 200 E. Palmetto Park Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, by email [email protected] or visit  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.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
200 E. Palmetto Park, Suite 103
Boca Raton, Florida 33432
Telephone 561-416-8956