SEC gets Penny Stock bans for Florida men in Honig Pump & Dump scheme

The Securities and Exchange Commission has finalized the settlement deals for three members of Barry Honig’s pump and dump securities fraud scheme. John Stetson, Michael Brauser, and John O’Rourke III all agreed to penny stock bans at varying degrees and to not hold more than 4.99% in a penny stock. The SEC settlement is seen as forgiving because the monetary fines and disgorgement amount to just over one million dollars for each defendant. Their co-defendant, billionaire Philip Frost was ordered a $5 million fine and the SEC still has to finalize the amount the ring leader, Barry C. Honig, will pay. The settlements were presented to New York federal Judge Ramos on March 6, 2020 who approved them.

O’Rourke will pay a total of $1.153,326 of which $765,128 is for disgorgement of illegal profits from stock fraud. O’Rourke agreed to a lifetime penny stock ban

Brauser will pay a total of $1,175,768 of which $844,914.32 is for disgorgement. Brauser agreed to a lifetime ban but keeps to keep his position above 4.99% in Polarity TE ($PTE).

Stetson will pay a total of $1,154,149.28 of which $837,509.98 is for disgorgement. Stetson, who is believed to have began cooperating with the SEC last year, got only a ten year penny stock ban. Stetson’s agreement to settle with the regulator was signed October 29, 2019.

One of the funds that was run by Stetson but secretly held Barry Honig’s investment, HS Contrarian Investment, has agreed to pay injunctive relief but the dollar amount is not settled yet. As a result the SEC ask that the fund remain a defendant in the case.

The SEC settlement says the defendants have to sell positions in stocks they hold at least 5%. The penny stock ban means they can’t help raise money for stocks that trades below $5, market/promote the company, or serve on the board and consult for a penny stock. That means Michael Brauser’s monthly consulting gig at Red Violet ($RDVT) should end along with any stock position he has over 5%.

Only three stock were listed in the SEC case but the SEC said in their amended complaint some of the defendants, which included Brauser, executed the scheme in over 40 stocks. One of the stocks not named in the compliant was Riot Blockchain ($RIOT) who recently announced the SEC has told them the investigation into the company has been dropped.

I previously reported the SEC lost some of their claims against the remaining defendant, Rob Ladd, who is CEO of MGT Capital ($MGTI). His case is moving forward to trial.

There are no details disclosed about the status of the ongoing criminal case by the DOJ into Team Honig.

Final SEC Judgment as to Defendant Michael Brauser 3.6.20 by Teri Buhl on Scribd


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  1. Ellen Segal says

    I cannot believe these illegal dealings are not sending these disgusting men to jail. The amount of money they are fined is nothing compared to the multi million dollars they stole from honest, hardworking people.

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