This Week In Securities Litigation (Week of June 2, 2025)

The Commission continued to dismiss previously filed enforcement action by stipulation with those involved last week. As with the early dismissals, no explanation was offered beyond the factually unsupported claim that the agency believes the resolution is appropriate. The sole exception is the dismissal of one action centered on crypto assets discussed below.

Last week the Commission also filed several new enforcement actions.

Be careful, be safe this week.

SEC Enforcement – Filed and Settled Actions

Statistics: Last week the Commission filed 5 new civil enforcement actions.

Insider trading: SEC v. Kliushin, Civil Action No. 1:21-cv12088 (D. Mass.) is a previously filed action which named as defendants Vladislav, a Russian, and others. The complaint alleged that beginning in February 2018, and continuing through at least August 2020, Defendants hacked into two firms that had material non-public information regarding certain transactions. Defendant and his confederates used that information to trade. Defendant traded through eight different brokerage accounts. Through this scheme $82.5 million was raised during the period of the scheme. In a parallel criminal action, Defendant was convicted on the same charges. Subsequently, President Trump issued an Executive Grant of Clemency, ending Mr. Klushin’s nine-year sentence. In the Commission’s civil action, the court granted a motion for summary judgement filed by the agency. An injunction was entered based on Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5. Defendant Vladislav was directed to pay disgorgement and penalties. The amounts were not specified. See Lit. Rel. No. 26318 (May 30, 2025).

Offering fraud: SEC v. Kronus Financial Corporation, Civil Action No. 1:25-cv-22411 (S.D.Fla. Filed May 28, 2025). Named as defendants in this action are: The firm, Kronus; Finser International Corporation; and Andrew H. Jacobus. Kronus was based in Miami, Florida. The firm was dissolved in September 2024. Finser had been registered with the Commission as an investment adviser from June 2010 through January 2021. Defendant Jacobus was the owner of Finser. It filed a Form ADV-W to withdraw its registration. In September 2020 Defendants Finser and Jacobs settled administrative proceedings with the Commission. Those proceedings were based on charging fees that were contrary to the disclosures made by the firm to the fund managed by Mr. Finser. The action was settled. See In the Matter of Finser International Corporation, Release No. 5593 (Sept. 24, 2020). Here the charges focus on the period May 2015 through April 2024. Prior to that period, Mr. Jacobus established and became the sole owner of the firm, a currency exchange provider in Venezuela. In 2010 he had established Finser as an SEC registered investment adviser. The firm engaged in currency exchange transactions with its clients. Those clients paid a 1% management fee. Later Mr. Jacobus paid himself a salary. During the period May 2015 to April 2024 clients deposited their funds in accord with instructions received from Mr. Jacobus – typically to deposit their funds with one of the firms he controlled. The clients were largely Venezuelan nationals that included Catholic dioceses and elderly individuals. Millions of dollars were deposited into various brokerage accounts he controlled. About $17.8 million was taken from the accounts and used to make Ponzi-like payments to certain clients and for select personal activities. The funds came from about 40 advisory clients. The complaint alleges violations of Securities Act Section 17(a), Exchange Act Section 10(b) and Rule 10b-5 and Advisers Act Sections 206(1) and 206(2). See Lit. Rel. No. 26317 (May 29, 2025).

Crypto assets/dismissal: SEC v. Binance Holdings Limited, Civil Action No. 1:23-cv-01599 (D. Col.) is a previously filed action tied to crypto assets. The Commission and each Defendant (Binance, Bam Trading Services, Inc. Bam Management US Holdings, Inc. and Changpeng Zhao) stipulated to the dismissal action. The stipulation states in part that after filing the Commission’s Acting Chairman “launched a crypto task force dedicated to helping the Commission develop a regulatory framework for crypto assets.” Note: The text of the dismissal stipulation here differs from the one used to dismiss other cases last week as discussed below.

Offering fraud: SEC v. Aubin, Civil Action No. 1:25-cv-11379 (D. Mass. Filed May 15, 2025) is an action which named as defendants: Christopher Aubin, Anchor State Capital LLC, and Anchor State Properties LLC. The case centers on the misuse and misappropriation of investor funds raised by Defendant Christopher Aubin and his two companies, each of whom is named as a defendant in this action. The scheme involved here turned on the issuance of securities by Anchor State to investors. The money was raised, according to the representations to investors, to make short term loans. Investors were also encouraged to roll over their investments which helped extend the scheme. In fact, the representations made to investors about the use of their money were false. The complaint alleges violations of Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5. See Lit. Rel. No. 26315 (May 27, 2025).

Offering fraud: SEC v. Unicoin, Inc., Civil Action No. 1:25-cv-04254 (S.D.N.Y. Filed May 20, 2025) is an action which names as defendants: the company, whose shares were registered pursuant to Exchange Act Section 12(g) but never traded; Alexander Konanykhin, CEO of Unicorn; Maria Silvina Moschini whose current residence is unknown; Alejandero Dominguez, a resident of Miami who served as the investor relations consultant for the firm; and Richard Devlin, senior vice president of Unicorn. Defendants made a series of misrepresentations designed to portray the firm as a safe investment. First, Defendants misled investors about the attributes of the tokens being marketed; second, investors were falsely told that real estate backed the investments; and third, Defendants repeatedly overstated the value of the assets. The complaint alleges violations of Securities Act Sections 5(a), 5(c) and 17(a) and Exchange Act Section 10(b) and Rule 10b-5. See Lit. Rel. No. 26314 (May 27, 2025).

Unregistered securities: SEC v. Sason, Civil Action No. 19-cv-1459 (S.D.N.Y.) is a previously filed action which named as defendants: Kautilya Perian Salviola and Pallas Holdings, LLC. The complaint alleged that Defendants has sold securities without an exemption or effective registration statement in place. Following a grant of summary judgment entered in favor of the Commission and against each Defendant, the matter was resolved. The court entered a permanent injunction against each defendant based on Securities Act Section 5. The judgments imposed the obligation on each Defendant, on a joint and several basis, to pay disgorgement in the amount of $5,396,629.54. In addition, the court directed each Defendant to pay a penalty in the amount of: Sharma, $90,000; Salviola in the amount of $90,000; and Pallas Holdings in the amount of $500,000. Each individual Defendant was also barred from participating in any penny stock offering for two years. See Lit. Rel. No. 26313 (May 23, 2025).

Offering fraud: SEC v. Mattson, Civil Action No. 3:25-cv-04387 (N.D. Cal. Filed May 22, 2025) is an action which names as defendant Kenneth Mattson and, as a relief defendant, KS Mattson Partners, LP. The complaint alleges that beginning in 2007, and continuing until April 2024, Defendant, who had managed legitimate limited partnerships that invested in residential and commercial real estate owned by investors, defrauded other investors by selling them fake interests in the entities. Defendant also prepared false tax records to cover the sale of the fraudulent interests. The complaint alleges violations of Securities Act Sections 5(a), 5(c) and 17(a) and Exchange Act Section 10(b) and Rule 10b-5. See Lit. Rel. No. 26312 (May 23, 2025).

Offering fraud: SEC v. Nataroi, Civil Action No. 25-cv-00895 (D. Nev. Filed May 21, 2025) is an action which names as defendants Joel J. Natario and Jefferson Scot (a/k/a “PATCH”). Over a period of about one year, beginning in February 2020, Defendants sold interests in what were known as cash advances or MCAs to investors. To do this Defendants made false statements claiming, for example, that the MCAs would earn rates of return ranging from 16% to 18% every twelve weeks. The claimed bank accounts also involved false documents showing investors non-existent profits. The complaint alleges violations of Securities Act Sections 5(a) and 5(c) and 17(a) and Exchange Act Section 10(b) and Rule 10b-5. See Lit. Rel. No. 26311 (May 23, 2025).

Dismissal: The claims in each of the following cases were dismissed with prejudice pursuant to a simulation of the parties. The factual nature of the underlying claims is not mentioned in the dismissal papers. SEC v. Long, Civil Action No. 1:23-cv-1426 (N.D. Ill. Filed September 28, 2023); SEC v. Tri-Bridge Ventures, LLC, Civil Action No. 3:24-cv-05711 (D. N.J. Filed May 22, 2025); SEC v. LG Capital Funding, LLC, Civil Action No. 1:22-cv-03353 (E.D.N.Y. Filed June 7, 2022); and SEC v. River North Equity LLC, Civil Action No. 1:19-cv-01711 (N.D. Ill. Filed Mar. 11, 2019)(as to Defendants River North Equity, Edward M. Liceaga, and Michael Chavez).

Australia

Remarks: ASIC Commissioner Kate O’Rourke delivered remarks at the Responsible Investment Australasia Investment Association Conference on May 29, 2026. Her remarks focused on the work being done regarding reports on climate issues, a new regulatory guide, and the work being done on materials to assist registrants with their filings (here).

ESMA

Comments: The European Securities and Markets Authority has requested that retail investors provide comments on the simplification and burden reduction efforts being made by the Commission, according to a release dated May 21, 2025 (here).

Hong Kong

Remarks: The Securities and Futures Commission of Hong Kong issued remarks, dated May 25, 2025, regarding its extended dialogue on regulatory cooperation beyond the landmark ETF listing (here).

Singapore

Comments: The Market Authority of Singapore disclosed that its Corporate Governance Authority Advisory Committee issued remarks regarding the review of the code of Corporate Governance, on May 29, 2025 (here).