March 16, 2020/US SEC
On March 16th, the Securities and Exchange Commission filed a second amended complaint in an ongoing civil action in which it alleges that numerous individuals and associated entities participated in microcap schemes that generated over $27 million from unlawful stock sales. The amended complaint includes additional allegations in support of its claims against Robert Ladd, the only non-settling defendant of the twenty original defendants in this action.
Since the filing of the initial complaint on September 7, 2018 and its first amendment thereof on March 8, 2019, the SEC has obtained final consent judgments as to twelve defendants and entered into partial consent judgments with six other defendants, all of which allegedly had a role in the schemes. The SEC previously dismissed its charges against the twentieth defendant, a now-defunct entity.
In the second amended complaint, the Commission adds allegations against Ladd for violations of registration provisions of Sections 5(a) and (c) of the Securities Act of 1933, and ownership reporting provisions of Sections 13(d) and 16(a) of the Securities Exchange Act of 1934 and Rules 13d-2(a) and 16a-3 thereunder. These new allegations are in addition to the previously charged violations of the antifraud provisions of Section 17(a)(2) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder, aiding and abetting Barry Honig’s and others’ violations of Section 10(b) of the Exchange Act and Rule 10b-5(a) and (c) thereunder, aiding and abetting Barry Honig’s and others’ violations of Section 17(a)(1) and (3) of the Securities Act, and aiding and abetting MGT’s violations of Section 13(a) of the Exchange Act and Rules 13a-1 and 12b-20 thereunder.
For further information, see Press Release No. 2018-182, September 7, 2018, Litigation Release No. 24262, September 7, 2018, Litigation Release No. 24431, March 22, 2019, Litigation Release No. 24529, July 12, 2019 and Litigation Release No. 24765, March 11, 2020.