The Securities and Exchange Commission obtained partial consent judgments against defendants Barry Honig and GRQ Consultants, Inc. (“GRQ”) on July 10, 2019, and against defendants Elliot Maza and Brian Keller on March 27, 2019 and March 29, 2019, respectively, in an ongoing civil action in which the SEC alleges that numerous individuals and associated entities participated in microcap schemes that generated over $27 million from unlawful stock sales.
According to the SEC’s complaint, filed last September and amended on March 8th, Honig was the “primary strategist” in each of the schemes. The complaint further alleges that Maza and Keller participated in a fraudulent scheme with Honig, GRQ, and other members of an investor group with respect to a public company of which Maza and Keller were officers.
The SEC’s complaint charges Honig, GRQ, Maza, and Keller with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder. Keller is also charged with aiding and abetting violations of Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5 thereunder. The complaint further charges Honig with violating the manipulative trading provisions of Exchange Act Sections 9(a)(1) and (2), and the registration provisions of Securities Act Sections 5(a) and (c). Finally, the complaint charges Honig and GRQ with violating the reporting provisions of Exchange Act Section 13(d) and Rule 13d-1(a) thereunder, and Maza and Keller with aiding and abetting violations of the reporting provisions of Section 15(d) of the Exchange Act and Rule 15d-1 thereunder.
Without admitting or denying the SEC’s allegations, Honig, GRQ, Maza, and Keller consented to bifurcated settlements under which they will be enjoined from violating these provisions. Honig, GRQ, and Keller also consented to penny stock bars. Honig and GRQ further consented to conduct-based injunctions. The settlements, which were entered by the court, reserve the issues of any additional remedies, including disgorgement, prejudgment interest, and civil penalties, for further determination by the court upon motion of the SEC.
For further information, see Press Release No. 2018-182, September 7, 2018, Litigation Release No. 24262, September 7, 2018 and Litigation Release No. 24431, March 22, 2019.