Donna Levy Sentenced

On February 19, 2014, Donna Levy was was sentenced to 60 months in connection with her conviction for Conspiracy to Commit Securities Fraud and Manipulation for Hire on Counts and 66 months for Securities Fraud concerning Banneker, Cardiac Networks to run concurrently. In criminal cases when

Zombie Tickers 101

The Securities and Exchange Commission (“SEC”) has continued its trend of instituting administrative proceedings to revoke the registrations of hundreds of dormant issuers. The issuers are being suspended pursuant to the Securities Exchange Act of 1934, after being delinquent in the filing of their periodic financial reports required by the Commission.

The SEC has been proactive in preventing corporate hijackings of dormant shell companies for reverse merger transactions and has suspended hundreds of issuers.  We expect to see many enforcement actions arising from corporate hijackings of dorman shells in the near future.

The Laws That Apply to Finders

Companies seeking capital are frequently approached by finders who offer to locate investors in exchange for a fee.  This is particularly true in going public transactions. Most finders are not registered as broker-dealers with the Securities and Exchange Commission (the “SEC”).

The possibility of receiving capital even through the efforts of a finder creates a tempting opportunity for issuers who need capital.

Matching companies with investors can be a lucrative proposition for the finder. While it may seem harmless enough, the SEC does not think so and in fact, the SEC frequently brings cases against unregistered finders and those who aid and abet them.

SEC Charges Lance Berger In Connection With FUEG

According to the SEC, in December 2012, Lance T. Berger, a stock promoter for several penny stock companies, including FUEG, along with another stock promoter who was a business associate of Berger’s, began discussions with the cooperating witness regarding possible fraudulent stock transactions involving several issuers, including FUEG.

FUEG is a Florida corporation with principal offices located in Valley Stream, New York. FUEG purported to be in the business of operating an internet gaming website that charged a monthly membership fee. FUEG’s stock was quoted on the OTC Link operated by OTC Markets Group, Inc. and the OTC Bulletin Board under the symbol “FUEG.”

SEC Charges Caroline Winsor,Richard Walchuk, Lance Bauerlein and Lisa Esposito

The SEC has charged Caroline Winsor, a Canadian stock promoter, Richard W. Walchuk, the president and Chief Executive Officer of Viosolar Inc. and Lisa A. Esposito, a former registered representative, in connection with the manipulation of the common stock of two penny stock issuers, Violsolar and FACT Corporation.

According to the SEC, Lance W. Bauerlein aided and abetted the manipulation of FACT corporation’s common shares.

Violsolar is purportedly an alternative energy company in the business of constructing solar parks in Greece and other south and southeastern European Union countries.  Viosolar’s common stock is quoted on the OTCBB and OTC Link under the symbol VIOSF.