Source: Securities and Exchange Commission
On March 2, 2020, the United States District Court for the Southern District of New York approved the SEC’s settlements with Strategic Capital Partners Muster Limited and Strategic Wealth Investments, Inc., and entered final judgments against them. The Court also granted the SEC’s motion for a default judgment against Nedko Nedev. The SEC had dismissed the remaining two defendants-PTG Capital Partners LTD and PST Capital Group LTD-as fictitious entities used to perpetrate the fraud.
As alleged in the SEC’s complaint, this case involved defendants’ coordinated attempts to fraudulently manipulate the securities in three issuers, Avon Products, Inc., Tower Group International, Ltd., and Rocky Mountain Chocolate Factory, Inc., through filing false tender offers on the SEC’s EDGAR database and issuing a fraudulent press release. According to the complaint, defendants held securities in these companies and manipulated the companies’ stock prices in an attempt to benefit their positions, thereby profiting from the resulting price increase as to each.
Without admitting or denying the allegations, Strategic Capital and Strategic Wealth each agreed to the entry of a final judgment that permanently enjoins them from violations of the federal securities laws, orders them to pay disgorgement plus prejudgment interest totaling approximately $31,270, and also orders these defendants to pay combined civil penalties of $1,000,000.
In granting the SEC’s motion for default judgment against Nedev, the Court permanently enjoined Nedev from violations of the federal securities laws and ordered him to pay a $470,000 civil penalty.
The litigation was led by Christopher R. Kelly and supervised by Jennifer C. Barry in the SEC’s Philadelphia Regional Office. The investigation that led to the SEC’s action was conducted by David Snyder, John Rymas, and Patrick McCluskey, and supervised by Assunta Vivolo, Joseph G. Sansone, Chief of the Market Abuse Unit, and Kelly L. Gibson, Regional Director.