The Securities and Exchange Commission today announced that Florida stock promoter Brian Robert Sodi, and two of his now-defunct companies, Capital Financial Media LLC (CFM) and List Data Solutions LLC (LDS), have agreed to settle charges arising from their roles in scalping and pump-and-dump schemes involving two penny stocks in 2013. The Commission’s complaint, filed February 26, 2018, alleged that Sodi, a CPA, secretly acquired shares of two companies and then sold those shares while using CFM and LDS to disseminate statements urging investors to buy those stocks, and without disclosing his sales or plans to sell.
In a parallel criminal action filed in the Northern District of Alabama, Sodi pleaded guilty on May 19, 2019 to one count of securities fraud. Sentencing in that matter is scheduled for May 2020.
To settle the ongoing litigation, Sodi, CFM, and LDS agreed to injunctions barring them from violating Sections 17(a) and 17(b) 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. Sodi also agreed to an injunction barring him from violating Section 5 of the Securities Act and Section 13(d) of the Exchange Act and Rule 13d-1 thereunder. All three defendants agreed to be barred from participating in any penny stock offering and to be prohibited from directly or indirectly promoting the purchase of any U.S. publicly traded or quoted stock without making certain disclosures regarding sales of, plans to sell, or compensation received in, such stock. The defendants also agreed to be prohibited from engaging in certain activities related to inducing the purchase or sale of securities. Finally, the defendants agreed to pay, jointly and severally, a total of $1,268,000 in disgorgement and prejudgment interest, with this obligation to be offset by the total amount of restitution and/or forfeiture ultimately ordered in the parallel criminal proceeding against Sodi. The settlements are subject to court approval.
Sodi also has offered to consent to a suspension from appearing or practicing before the Commission under Rule 102(e)(3) of the Commission’s Rules of Practice.
The SEC’s investigation was conducted in coordination with the Enforcement Division’s Microcap Fraud Task Force by John P. Lucas, Sarah R. Lamoree, Edward B. Gerard, and Benjamin D. Brutlag. The case was supervised by J. Lee Buck II and litigated by Patrick Costello. The SEC appreciates the assistance of the U.S. Attorney’s Offices for the Northern District of Alabama, District of New Jersey, Eastern District of New York, and Eastern District of Virginia as well as the Criminal Fraud Section of the U.S. Department of Justice, Federal Bureau of Investigation, U.S. Postal Inspection Service, U.S. Department of Homeland Security, Alabama State Securities Commission, Financial Industry Regulatory Authority, Alberta Securities Commission, British Columbia Securities Commission, Cayman Islands Monetary Authority, the Cyprus Securities and Exchange Commission, Dubai Financial Services Authority, Guernsey Financial Services Commission, Hong Kong Securities and Futures Commission, Liechtenstein Financial Market Authority, the Malta Financial Services Authority, the Mauritius Financial Services Commission, Investigation Section of the Financial Services Regulation Division of the Government of Newfoundland and Labrador, Ontario Securities Commission, Québec Autorité des Marchés Financiers, Monetary Authority of Singapore, Swiss Financial Market Supervisory Authority, United Arab Emirates Securities and Commodities Authority, and United Kingdom Financial Conduct Authority.