This Week In Securities Litigation (Week of May 26, 2025)

Last week the Commission filed four new enforcement actions. Four other cases were dismissed with prejudice. The papers did not offer an explanation for the dismissal. Be careful, be safe this week.

SEC Enforcement – Filed and Settled Actions

Statistics: Last week the Commission filed 4 settled administrative proceeding. Four other actions were dismissed by the agency with prejudice. The papers did not offer an explanation for the dismissal.

Unregistered securities: SEC v. Sason, Civil Action No. 19-cv-1459 (S.D.N.Y.) is an action initially filed in 2009. The complaint centered on the sale of unregistered securities. The remaining three defendants consented to the entry of judgments, resolving the action. Those Defendants were: Kautilya “Tony” Sharma, Perian Salviola, and Pallas Holdings. The judgments are based on alleged violations of Securities Act Sections 5(a) and (c). The remaining Defendants were directed to pay on a joint and several basis: disgorgement of $5,396, 629.54 and prejudgment interest of $404, 631.17. In addition, Defendants are each ordered to pay a penalty of $90,000; each is barred from participating in the offering of any penny stock for two years; and Defendant Pallas Holdings is ordered to pay a penalty of $500,000. The settlements concluding the long running action. 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 defendants Kenneth Mattson and Relief Defendant Mattson Partners LP. The complaint alleges that Defendant Mattson, the former CEO of real estate investment business LaFever Mattson, defrauded about 200 investors out of approximately $46 million by selling them fraudulent interests in the real estate firm. The investors were largely members of a church community. The complaint also claims that Defendant Mattson solicited investors to move funds from their IRA accounts to so-called self-directed funds. Mr. Mattson also took steps to conceal his fraud. The complaint alleges violations of Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5. Lit. Rel. No. 26312 (May 23, 2025).

Offering fraud: SEC v. Natario, Civil Action No. 26311 (D.Nev. Filed May 21, 2025) is an action which named as defendants Joel Natario and Jefferson Scott Baker. Over a one-year period, beginning in February 2020, Defendants Natario and Baker raised over $10 million from about 23 investors. The transactions were based on written agreements that promised returns for every 12 week period of about 16% to 18%. The returns paid were actually Ponzi type payments – funds from earlier investors were paid to those who participated in the scheme at a later date. Investors were told that the default rate on the investments was minimal. Defendant Natario used about $3 million of investor funds for personal transactions. The complaint alleges violations of Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5. See Lit. Rel. No. 26311 (May 23, 2025).

Dismissal: The following cases were dismissed with out explanation: SEC v. Long, Case No. 1:23-cv-14260 (N.D. Ill. Filed Sept. 28, 2023); SEC v. Tri-Bridge Ventures, Civil Action No. 3:24-cv-05711 (N.D.J. Filed April 29, 2024); SEC v. L.G. Capital Funding, LLC, Civil Action No. 1:22-cv-03353 (E.D.N.Y. Filed June 7, 2022); SEC v. River North Equity LLC, Civil Action No. 1:19-cv-01711 (N.D. Ill. Filed March 11, 2010). Unlike earlier cases there is no statement in the dismissal papers explaining the basis for the action. See Lit. Rel. No. 26310 (May 23, 2025).

Misappropriation: SEC v. Jordan-Jones, Civil Action No. 1:25-cv-04297 (S.D.N.Y. Filed May 21, 2025). Named as defendants in the action are Jermy Jordan-Jones and Amalgam Capital Ventures, LLC. Mr. Jordan-Jones is the CEO of Amalgam Capital Ventures. The company is supposedly based in New York. Beginning in late November 2021, and continuing until early the next year, Defendant Jordan-Jones solicited an investor to invest in Amalgam Capital. The investor – identified as Investor A – was told that the firm had launched a blockchain-based point-of-sale and payment processing platform called Zeo. The investor was also told that the firm was operational and had $3 million in assets. In fact, the firm did not have $3 million in assets. The investor agreed to put $500,000 into the venture. Yet when the investor gave Defendant Jordan-Jones the funds, the money was not put into the venture. To the contrary, Defendant Jordan-Jones used the funds obtained from the investor for personal items. The complaint alleges violations of Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5. The U.S. Attorney’s Office for the Southern District of New York filed parallel criminal charges. See Lit. Rel. No. 26309 (May 22, 2025).

Manipulation: SEC v. Honig, Civil Action No. 18 Civ. 08175 (S.D.N.Y.) is a previously filed action which names as defendant Barry Honig, an individual named as a defendant in other Commission enforcement actions. Here final judgments were obtained against defendants Elliot Maza and John Ford who had been previously charged with participating in fraudulent schemes. Defendant Maza, the CEO of the firm involved, was controlled by, and paid by, others to participate. The complaint also alleged that Defendant Ford was paid by others for his participation. Defendant Maza consented to the entry of permanent injunctions based on Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5 as well as Section 15(a) and Rule 15d-1. He will pay a penalty of $578,085 and is precluded from practicing before the Commission as an attorney or accountant. The order does not provide for a specific time to apply for reentry. Mr. Ford also consented to the entry of permanent injunctions based on the same provisions except Exchange Act Section 15(a) and Rule 15d-1. He will pay a penalty of $100,000. The injunction also imposes a penny stock bar. See Lit. Rel. No. 26308 (May 22, 2025). Note, the remedies are imposed in a case captioned SEC v. Honig, with the same number as above. There are separate actions filed for Defendants Maza and Ford.

Offering fraud: SEC v. Safeguard Metals LLC, Civil Action No. 2:22-cv-00693 (C.D. Cal.). Named as defendants in the action are: Jeffrey Ikahn and his firm, Safeguard Metals LLC. Mr. Ikahn owns and controls Safeguard Metals. Over a four-year period, beginning in 2017, Defendants targeted those about retirement age as potential investors for their scheme. The targeting was done through advertising and the website of Safeguard. Potential investors were told that Safeguard had $11 billion in assets under management. The firm also had a London office, according to the pitch. Prominent individuals in the securities business were supposedly affiliated with the operations. The sales pitch, centered on the sale of coins, was firmly tied to a bed of false statements. For example, sales agents for Safeguard told potential investors that a “Money Market Reform Law” permitted banks and brokerage firms to freeze retirement accounts if there was a market downturn, a false statement. That statement was also critical to another false statement – that top financial experts were forecasting a downturn soon. Safeguard and Mr. Ikahn also misled investors about the markups on the coins being sold. A “Precious Metals Shipping and Account Agreement,” created by Mr. Ikahn and available on the Safeguard website, told potential investors that the firm’s “operating margin” or mark-up was typically 4% to 23%, depending on the type of coin involved in the transactions. In reality, the markup was about 64%, yielding about $25.5. million in profits for Defendants. Defendants obtained about $65 million from the sale of coins to over 450 largely elderly retail investors. The payments reflected the prices obtained from retail investors for the coins. The amended complaint alleges violations of Exchange Act Section 10(b) and Rule 10b-5 and Advisers Act Sections 206(1) and 206(2). On June 14, 2023, the court entered partial judgments in favor of the Commission, permanently enjoining Safeguard and Defendant Ikahn from future violations of the Sections cited in the complaint. The final judgments, ordered as to Defendants on a joint-and-several basis, directed Safeguard and Ikahn to pay disgorgement of $25,569,303 as penalties along with prejudgment interest of $4,821,263. See Lit. Rel. No. 26307 (May 9, 2025).

Australia

Program: The Australia Securities & Futures Commission hosted Superannuation CEO Roundtables to discuss key issues of accountability, on May 23, 2025 (here).

ESMA

Request: The European Securities and Market Association requested input on the retail Investor Journey as part of a simplification and burden reduction effort, May 21, 2025 (here).

Singapore

Paper: The Monetary Authority of Singapore is conducting an inquire to assess streamlining prospectus requirements and broaden its outreach to investor channels for IPOs, announced on May 15, 2025 (here).