The Impact of False Filings

The purpose of making filings with the Commission such as Form 8-K is to inform shareholders, the markets and investors about material transactions involving the filer.  In contrast, when false information is injected into the filings the system is thwarted – rather than inform investors and the markets it misinforms them, distorting the available information and defrauding those who rely on it.  When a filer reports false information the system is thwarted – rather than provide investors and the markets with accurate information it misinforms them by delivering fraudulent facts.  This is what happened in SEC v. Mathias,  Civil Action No. 1:25-cv-02313 (D.D.C. Filed July 18, 2025).

Defendants in this action are:  Shahnawaz Mathias aka Shah Mathias, American Metro, Inc., Penndel Land Development Co. and HSRF Trust.  Beginning in July 2020, and continuing until at least April 2024, Defendant Mathias used his firm, American Metro, to offer for sale its shares to over 150 investors. The offers were made through two other firms he controlled, Penndel Land Development and HSRF Trust.

During the offering, American Metro is alleged to have made two false filings.  The first claimed that a subsidiary of American Metro had acquired the rights to develop a property in San Berardino, California purchased for $540 million.  A similar filing was subsequently made –  a Form 8-K filing falsely claimed that a Greek real-estate firm had acquired a Greek real-estate real estate holding company worth over $1 billion. The financing for the deal supposedly came  in the form of about $950 billion from large financial institutions.  The claims were false. The complaint alleges violations of Securities Act Section 17(a) and Exchange Act Sections 10(b) and Rule 10b-5 as well as Rules 12b-20, 13a-1 and 13a-11. See  Lit. Rel. No. 26353 (July 21, 2025).