This Week In Securities Litigation  (Week of September 22, 2025)  

The Commission filed one new enforcement action last week It centered on Misrepresentations. The agency also dismissed three different enforcement actions.  As noted in earlier articles on such cases, the Commission typically does not offer any explanation these actions.

Be careful this week, be safe.

SEC Enforcement – Filed and Settled Actions

Statistics:  Last week the Commission filed one new case civil enforcement action.  It did provide information on other pending cases as discussed below.

Dismissal:  SEC v. Stanford International Bank, Ltd.,  Civil Action No. 3:09-cv-0298 – N (N.D. Tex.)_ is a previously filed action which named as Defendant Mark Kuhrt along with the bank.  On September 18, 2025, the Commission moved to amend the complaint to include allegations of operating a Ponzi scheme detailed in an amended complaint.  The agency then moved to dismiss the case with prejudge without stating specific reasons  for the action.  This approach is consistent with that of numerous recent cases. See  Lit. Rel. No. 26405 (Sept. 18, 2025).

Dismissal: SEC v. Archer,  Civil Action No. 26404 (Sept. 18, 2025) is an action which names as defendant Devon D. Archer.  The Commission moved to dismiss this action without explanation as with the case cited above and numerous others.  See  Lit. Rel. No. 26403 (Sept. 18, 2025)

Dismissal:  SEC v. Ozy Media, Inc.,  Civil Action No. 123-cv-01424 (S.D.N.Y.) is a previously filed action  which named as Defendants the firm and its CEO Carlos Watson.  The Commission moved to dismiss the action in accord with the approach used in other cases dismissed recently.

Ponzi scheme:  SEC v. Kimbrough, Civil Action No. 4:22-cv-00558 (E.D. Tex.). Named as defendants in the action are:  Justin R. Kimbrough and Prosperity Consultants, LLC.  The complaint alleges that over a period of several months, beginning in June 2020, the pair  raised at least $3 million from 31 investors. They were told that the funds were being raised  to finance a real estate wholesale business and to purchase medical products for resale by the company in India. To the contrary, however, about $1.75 million of the funds were used to pay Defendants and provide a kind of dividend to existing investor of about $1.05 million. Defendants settled the matter with the Commission, consenting to the entry of permanent injunctions based on Securities Act Section 17(a)(1) & (3) and Exchange Act Section 10(b) and Rule 10(b) (1) and (3). The final judgement as to Mr. Kimbrough also imposed an officer/director bar and a conduct-based injunction that prohibits him from participating in the issuance, purchase or sale of any security other than for his own account.  The final judgements as to each defendant require the payment on a joint and several basis, of disgorgement in the amount of $1,137,437.45 plus prejudgment interest of $86,882.82. The amounts are deemed paid by the forfeiture paid by Mr. Kimbrough in the parallel criminal proceeding in the amount of $2,560,938.87.   See  Lit. Rel. No. 26402 (Sept. 17, 2025).

Misrepresentations: SEC v. O’Gara,   Civil Action 2:25-cv-15535 (D. N.J.  Filed Sept. 15, 2025). Named as defendants in this action are: Wanu Water, Inc. and Todd O’ Gara. Mr. O’Gara is the CEO and 40% owner of the company.  Wanu Water, Inc. is based in Austin, Texas. It promotes nutrient-infused water bottled and sold to prominent retailers. At its height the firm had about two dozen employees. Over a period of about five years, beginning in January 2019, the firm and its CEO raised about $10.3 million from over 50 investors. The sales pitch was straight forward and simple.  It keyed to exaggerations.  For example, Defendants overstated the size of the deals made with a prominent wholesaler, enhancing the claimed magnitude of success.  Similarly, Defendants claimed that two private equity firms had promised investments.  Misrepresentations were also made about Mr. Gara’s personal wealth and credentials, falsely enhancing his stature and that if the firm.  And, the false claims appeared to be backed-up and were certainly enhanced with fabricated term sheets, emails, bank records and other documents – all painting a solid picture of success. Investors bought and bought. The sales pitch and the claims 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. 26401 (Sept. 15, 2025).

Offering fraud:  SEC v. Lawrence,  Civil Action No. 2:23-cv-00550 (E.D. Wis.).  is an action which named as a relief defendant Justin Smith. The underlying action is a litigated case centered on Charles T. Lawrence, Jr. The case centered on an offering fraud in which investors were promised large returns from a now defunct Swedish entity – Compagnie Trust Prive KB Landes.  The returns were represented to range from 25% to 100%. Defendant Lawrence is alleged to have misappropriated much of the money raised.  Defendant Smith settled, consenting to the entry of permanent in junctions. Mr. Smith agreed to pay disgorgement of $297,700 plus $38,371 of prejudgment interest jointly and severally with his entity defendant.  Others in the case had resolved their liability in entries made in October 2024. See  Lit. Rel. No. 26400 (Sept. 12, 2025).  See Lit. Rel. No. 26400 (Sept. 12, 2025).

Offering fraud:  SEC v. Giltman, Civil Action No. 2:22-cv-00051 (D.N.J.) is an action in which the Commission secured the entry of a final judgment against Defendant Allen C. Giltman based on his role in the fraud.  The complaint alleged that the underlying scheme was based on spoofing at various locations that supposedly were offering CDs for sale .  Some of the cites involved actually spoofed real firms while others had no relation to any legitimate financial firm;  the promised CDs did not exist.  The complaint alleges violations of Securities Act Section 17(a) and Exchange Act Section 10(b).  The resolution was based on the entry of an order prohibiting future violations of the Sections cited. Defendant Giltman was directed to pay disgorgement in the amount of $31,224,595.  That amount was deemed satisfied by the restitution order entered in the parallel criminal action, U.S. v. Giltman,  No. 2:22-cr-00002 l(D.N.J.).  Lit. Rel. No. 26399 (Sept. 12, 2025).

Actions by Other  Regulators 

Hong Kong

 Remarks:   Rico Leung delivered remarks titled Mastering Balance to Advances at Hong Kong’s Derivative Markets (July 18, 2025).

Singapore

 Paper:    The regulator published a paper titled Proposed Guidelines on Liquidity Risk (August 29, 2025)