The U.S. Securities and Exchange Commission (“SEC”) filed settled charges against Brian D. Barrilleaux September 17, 2019.
The SEC’s complaint alleges that Barrilleaux, of Houston, Texas, violated the antifraud provisions of the federal securities laws by assisting a Houston, Texas-based penny stock fraud ring (“the Group”) through recklessly arranging materially misleading penny stock promotional campaigns for the Group. According to the complaint, between at least March 2013 and December 2016, when arranging penny stock promotional campaigns for the Group, Barrilleaux recklessly disregarded that the Group had already acquired shares of the relevant penny stocks and planned to, and did, sell its shares into the share price and trading volume rises triggered by the promotional campaigns. Barrilleaux likewise recklessly failed to include in the promotional materials any disclosure of the Group’s ownership of the shares, its plans to sell, or its selling of, such shares. Five members of the Group already settled charges with the SEC in May 2019, and also pleaded guilty in a parallel criminal action.
The SEC’s complaint, which was filed in federal court in Texas, charges Barrilleaux with violating the anti-fraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Barrilleaux agreed to the settlement without admitting or denying the charges. In addition to permanent injunctive relief, Barrilleaux has agreed to a 5-year officer-and-director bar, a 5-year penny stock bar, and to pay $157,075.08 in disgorgement and prejudgment interest and a $50,000.00 penalty. The settlement is subject to court approval.
The SEC’s investigation, which is continuing, has been led by Kelly V. Silverman and Christopher R. Mathews, supervised by Assistant Director J. Lee Buck, II, and assisted by Accountant Margaret Vizzi and Senior Trial Counsel Joshua E. Braunstein. The SEC appreciates the assistance of the United States Attorney’s Office for the Southern District of Texas, the Federal Bureau of Investigation, the Financial Industry Regulatory Authority, the Cyprus Securities and Exchange Commission, the Swiss Financial Market Supervisory Authority, the Ukrainian National Securities and Stock Market Commission, and the United Kingdom Financial Conduct Authority.