SEC Charges Auctus Fund Management LLC and Its Co-Owners, Louis Posner and Alfred Sollami, with Acting as Unregistered Securities Dealers

On June 1, 2023, the Securities and Exchange Commission (the “SEC”) announced charges against Auctus Fund Management, LLC (“Auctus Management”) and its co-owners Alfred Sollami of Brookline, Massachusetts and Louis Posner of Mansfield, Massachusetts, for failing to register… Read More

SEC Obtains Final Judgment Against Thomas Ronk, Former Short Seller Opportunist

On April 14, 2023, the U.S. District Court for the Central District of California entered a final consent judgment against Thomas Carter Ronk imposing injunctive relief, a five-year officer-and-director bar, a five-year penny stock bar, and a civil… Read More

OTC Markets provides guidance on understanding FINRA Daily Short Sale Volume Data

Despite that the Securities and Exchange Commission adopted Regulation SHO more than 15 years ago, the age of meme stocks has caused “short squeeze” debates to become a regular and passionate topic on Reddit and social media, which… Read More

SEC Shuts Down WeedGenics – $60 Million Cannabis Offering Fraud

On March 23, 2023, the Securities and Exchange Commission (the “SEC”) obtained an emergency order to halt an alleged ongoing offering fraud and Ponzi-like scheme by Integrated National Resources Inc. (INR), which does business as WeedGenics, and its… Read More

Shell Hijacker, Mark Miller, Sentenced to One Year in Prison

On May 18, 2023, Mark Miller became the last of three men to be sentenced for a securities fraud scheme that involved hijacking several abandoned penny stocks, then using them for an illegal pump-and-dump stock manipulation scheme.  Miller… Read More

SEC Obtains Partial Summary Judgment Against Joshua Sason and Magna Group in IIIegal Microcap Securities Offerings

On May 4, 2023, the U.S. District Court for the Southern District of New York granted the Commission summary judgment on its non-fraud claims against three individuals and their related businesses. According to the SEC’s complaint, from approximately… Read More

SEC Obtains Final Judgments Against Alexander J. Dillon, Cosmin I. Panait, and their corporate entities GPL Ventures LLC and GPL Management LLC

On May 2, 2023, the U.S. District Court for the Southern District of New York entered final judgments against Alexander J. Dillon, Cosmin I. Panait, and their corporate entities GPL Ventures LLC and GPL Management LLC, whom the… Read More

SEC Obtains Default Judgments Against Lesley Greyling and Trend Investments Inc

On April 25, 2023, the U.S. District Court for the District of Massachusetts entered final judgments against defendants Trends Investments Inc, Leslie Greyling and Brandon Rossetti, who were previously charged by the SEC with engaging in a scheme… Read More

Five People Charged in $2M Virtual Asset and Securities Manipulation Scheme

An indictment was unsealed on Monday, April 24th in Miami charging two U.S. citizens and a South African national with conspiring to manipulate the market for HYDRO, a virtual asset created by the Hydrogen Technology Corporation. Two other… Read More

Gerald Shaw, a Disbarred Attorney and Convicted Felon, Arrested For Involvement In Multi-Million-Dollar Fraud Scheme

On Thursday, April 20, 2023, Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation… Read More

Reverse Mergers After Amended Form 15c-21

A “Reverse Merger” is a transaction whereby a privately held company becomes a Public Company (“Public Company” or “Public Company Candidate”) by acquiring or merging with a publicly traded company that is usually quoted on the OTC Markets… Read More

SEC Charges Sean Wygovsky and Christopher Matthaei in Multi-Million Dollar SPAC Insider Trading Scheme

On March 30, 2023, the Securities and Exchange Commission (the “SEC“) filed insider trading charges against Sean Wygovsky, a former trader at a Canadian asset management firm, and Christopher Matthaei, a former partner at a U.S. broker-dealer, for… Read More

Lindsay Lohan, Jake Paul and six other celebrities charged by the SEC in crypto fraud

On Wednesday, March 22nd, the Securities and Exchange Commission (the “SEC“) announced charges against eight celebrities in connection with a broader investigation of crypto entrepreneur Justin Sun and three of his companies: Tron Foundation Limited, BitTorrent Foundation Ltd.,… Read More

Motion to Dismiss Denied by Court in DarkPulse Case Against EMA Financial LLC

On March 1, 2023, EMA Group, LLC (“EMA Group”) and Felicia Preston (“Preston”), the sole owner of EMA Group, lost a motion to dismiss RICO charges in a lawsuit filed against the lender by Darkpulse, Inc. (“Darkpulse”). Darkpulse… Read More

SEC Charges The Church of Jesus Christ of Latter-day Saints and Its Investment Management Company for Disclosure Failures and Misstated Filings

On February 21, 2023, the Securities and Exchange Commission (the “SEC“) announced charges against Ensign Peak Advisers Inc., a non-profit entity operated by The Church of Jesus Christ of Latter-day Saints to manage the Church’s investments, for failing… Read More

SEC Charges NBA Hall of Famer Paul Pierce for Unlawfully Touting and Making Misleading Statements about Crypto Security

On February 17, 2023, the Securities and Exchange Commission (the “SEC“) charged yet another celebrity for promoting a crypto asset security without disclosing the nature, source, and amount of compensation they received in exchange for the promotion. This… Read More

Rule 506(b) and Rule 506(c) State Blue Sky Laws

While the Securities and Exchange Commission (the “SEC“) regulates and enforces the federal securities laws, each state has its own securities regulator who enforces what is known as “blue sky” laws. If a company is selling securities, it… Read More

General Solicitation and Advertising in Rule 506 Offerings

Both public and private companies may conduct securities offerings using Rule 506. The exemption provides a valuable tool for enabling issuers to obtain shareholders in connection with a going public transaction particularly issuers electing to go public direct.

Regulation D Rule 504, Rule 506(b), Rule 506(c) Offering Exemptions

Securities offerings must be registered with the Securities and Exchange Commission (“SEC”) or exempt from registration. Private placements are unregistered, non-public securities offerings that rely on an available exemption from registration. Unregistered offerings of securities must rely on… Read More

Gonzalo Ortiz Sentenced to 30 Months’ Imprisonment for Defrauding Investor and Lying about his Trading Experience

Gonzalo Ortiz was sentenced on February 2, 2023, in federal court in Brooklyn to 30 months in prison for defrauding an investor of nearly $600,000 by making false representations about his trading expertise and the profitability of various… Read More

SEC Obtains Over $5 Million Final Judgment Against Charlie Abujudeh in Multi-Million Dollar Microcap Pump and Dump Scheme

On January 20, 2023, the U.S. District Court for the Eastern District of New York entered a final judgment against California resident Charlie Abujudeh whom the SEC had charged for his role in a microcap fraud scheme targeting… Read More

Former top FBI official Charles McGonigal arrested over ties to Russian oligarch Oleg Deripaska

Charles McGonigal, a former top counterintelligence official in the FBI’s New York Field Office, who retired from the FBI in 2018, has been arrested and charged in two separate cases involving his dealings with foreign operatives, including billionaire… Read More

SEC Charges Avraham Eisenberg with Manipulating Mango Markets’ “Governance Token” to Steal $116 Million of Crypto Assets

On January 20, 2023, the Securities and Exchange Commission (the “SEC”) charged Avraham Eisenberg with orchestrating an attack on a crypto asset trading platform, Mango Markets, by manipulating the MNGO token, a so-called governance token that was offered… Read More

SEC Obtains Judgment Against Todd Zinkwich

On January 12, 2023, the U.S. District Court in Boston entered a final judgment by consent against Florida resident Todd Zinkwich, whom the SEC charged for engaging in a scheme to manipulate the market for numerous microcap stocks…. Read More

SEC Charges Andrew DeFrancesco, Marlio Mauricio Diaz Cardona, Carlos Felipe Rezk, Nikola Faukovic, and Catherine DeFrancesco for their roles in a fraudulent scheme to mislead investors about Cool Holdings, Inc

On January 6, 2023, the Securities and Exchange Commission (“SEC”) announced charges against five individuals for their roles in a fraudulent scheme to mislead investors about Cool Holdings, Inc., a publicly-traded company (“Cool”). The SEC alleges that, from… Read More

OTC Markets Group Offers New Guidance for Submitting Attorney Letters

OTC Markets Group has published amendments to the Pink Basic Disclosure Guidelines. The amendments to the Guidelines have been updated to require additional information about ownership and to improve investor access to company disclosure by establishing best practices… Read More

SEC Wins $10.2 Million Judgment Against Justin W. Keener d/b/a JMJ Financial For Acting As Unregistered Penny Stock Dealer

On December 20, 2022, Judge Beth Bloom of the United States District Court for the Southern District of Florida entered a final judgment against Justin W. Keener d/b/a JMJ Financial. The SEC’s complaint alleged that Keener failed to… Read More

OTC Markets Group Publishes Guidance on Dilution Risk with Respect to OTCQX and OTCQB Applicants

OTC Markets published guidance with respect to Section 2.13(d) of the OTCQX Rules for U.S. Companies and Section 1.4(5) of the OTCQB Standards regarding the review of applications to the OTCQX and OTCQB markets. The notice is intended to… Read More

SEC Charges J.H. Darbie & Co with Anti-Money Laundering Violations

On December 12, 2022, the Securities and Exchange Commission (the “SEC”) charged J.H. Darbie & Co., Inc., a New York City-based brokerage firm, with failing to report suspicious activity related to transactions in tens of billions of shares… Read More

Members of New Republican House Majority Seek to Rein in Gary Gensler   

A week before the 2022 midterm elections, the ranking members of four important committees of the House of Representatives composed and jointly signed a letter to Gary Gensler, Chair of the Securities and Exchange Commission, demanding answers to… Read More