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Honig’s Shell Factory Attorney Gregg Jaclin Barred as SEC lawyer

This story has been updated with Jaclin’s criminal sentence

Microcap attorney Gregg Jaclin, formerly of Anslow + Jaclin LLP, has quit his three year fight against the Securities and Exchange Commission who accused him of running a multi-year shell factory scheme. Court documents show a federal judge in Central California approved a settlement on August 1 barring Jaclin from ever practicing securities law or being involved in SEC filings. Additionally, Jaclin is banned from participating in penny stocks even as a consultant. The SEC says it is only seeking $40,473 in disgorgement from Jaclin and forgoing the civil penalty it was asking the court for. That’s because it looks like Jaclin has also settled the parallel criminal case against him and is awaiting sentencing in which a heavy restitution could be ordered. Jaclin’s former partner Richard Anslow was never charged in either case but was mentioned in court documents.

I first reported on the charges against attorney Jaclin in May 2016 for trade publication Growth Capitalist after I uncovered documents that tied Jaclin to another microcap bad actor Barry Honig. Jaclin would sell Honig, and others at the direction of Honig, shell companies that gave the buyer millions in free trading shares when the stock should legally be restricted. Honig, and others like him, would use the shells to reverse merge a private company into and then run a pump and dump scheme. It was Jaclin who signed false opinion letters tricking transfer agents into clearing the stock to trade. Jaclin was charged criminally in 2017 on two counts of obstruction of justice and multiple counts of wire fraud and conspiracy. The Northern California DOJ brought the case against Jaclin and has sealed court filings over the last year. This is the same set of DOJ lawyers leading the criminal case into Team Honig.

Jaclin was a prominent face at small cap industry trade conferences whose firm did dozens of China reverse-mergers. One of the companies in the government’s complaint, YesDTC, was a Barry Honig investment. The CEO of the company, Joel Noel, settled criminal charges in 2014 and it’s unclear what kind of sentence he received after he wrote testimony for the DOJ naming Barry Honig. The sealing of Jaclin’s criminal case and the lack of public announcement about a criminal settlement shows signs Jaclin is also now working as a government witness.

Since the arrest two years ago Jaclin, a New Jersey resident, has set up a business consulting to foreign companies. His website says “Jaclin has shifted away from traditional legal work”. If convicted of a felony he will loose his law license. Part of the SEC settlement says Jaclin can not deny the accusations in the SEC complaint and he must remove any public denials but as usual the SEC let Jaclin off from admitting guilt.

A request for comment sent to Jaclin’s attorney was not returned for comment.

UPDATE 6.30.20 – Gregg Jaclin was finally sentenced in his criminal case yesterday. He plead guilty to two felonies for conspiracy and obstruction of justice in an SEC investigation. His sentence was very forgiving. The federal judge gave him three years probation, three months of home confinement, and no restitution order. He also can’t practice law. The Northern California DOJ asked for their sentencing memo to be sealed because they said it contained confidential information. This is where federal prosecutors describe why they are asking the judge for a light sentence. It could signal Jaclin likely flipped giving the DOJ evidence on another person involved in his illegal public company offering scheme. This is the same DOJ team that is investigating Barry Honig and his associates, according to the SEC. Jaclin could have given evidence against Honig regarding selling Honig’s associates shell companies with restricted shares and then making them free trading before the law allowed.

Jaclin says he is now a consultant to help companies raise money. There is no mention of his felony conviction or his SEC bar on his website.

Microcap Attorney Jaclin fights SEC fraud case by Blaming Everyone Else

A veteran microcap deal lawyer is trying to blame the young lawyers who worked for him for his alleged role in a Shell Factory scheme that spanned nearly a decade. I am reporting for Growth Capitalist today on the continued saga of the once well-respected attorney, Gregg Evan Jaclin, who plans to the fight the SEC enforcement action brought down on him in May. Jaclin has since been removed from his New Jersey-based law firm Szaferman, Lakind, Blumstein & Blader and some of the lead associates under his wing are now employed at a competitive New Jersey firm called Lucosky Brookman LLP.

According to the SEC, Jaclin worked with a L.A. based man, Imran Husain, to take fake start-up companies public so that they could later be sold for a ransom fee to real microcap companies that wanted to avoid the high cost of going public by doing what’s called a reverse merger. When in reality what was being filed with the SEC were shell companies (not real businesses) and Jaclin is now in trouble because he issued what the SEC considers ‘false opinion’ letters vouching that these deals were legit. This was done over and over from 2006 to at least 2013.

Jaclin’s motion to dismiss the SEC case is the first time we are hearing from the now disgraced lawyer who ironically admits in court documents that the companies in the SEC complaint were in fact shell companies. This is important because Jaclin signed documents that told the SEC when he first began filing the companies legal documents to be approved to go public that they were legitimate businesses with real CEOs and a diverse investor base. Having a diverse investor base is one of the parameters that allows stock in reverse merger deals to be unrestricted to trade right away. With the shell companies Jaclin allegedly co-created only a few people actually owned the stock and the public didn’t know this. This is bad because it allows the stock to be easily manipulated for pump and dumps which is exactly what happen with one of the shells in a company called YESdtc/PR Complete. The CEO of YESdtc plead guilty to criminal charges related to stock manipulation in 2014.

To top off the odd legal logic in his response Jaclin also says he didn’t really supervise his associates who drafted the SEC filing so of course the SEC can’t charge him. I call utter hogwash on the notion that the head of a law firm’s capital markets practice didn’t supervise the lawyers under him. And lets not forget that I was first to report on a secret plea deal his co-conspirator, Husain, made with the Dept. of Justice back in 2014 that says Jaclin was wide-eyed involved in the scheme. So much so that he helped Husain find a former SEC enforcement lawyer, Mark Hunter, to represent one of the puppet CEOs when the SEC started to investigate who was actually running these companies. And according to Husain coached him on how to lie to the SEC and destroy emails.

Husain has since plead guilty to one count of criminal conspiracy for basically interfering with an SEC investigation. Attorney Mark Hunter of NYC-based Hunter Taubman Fisher & Li has now agreed to be co-counsel in defending Jaclin in the SEC case.

During my reporting on this story I heard some industry players say Jaclin had been given office space in his former protegé’s law firm Lucosky Brookman LLP and that there could be fee-sharing going on. Joe Lucosky and Seth Brookman, the firm’s founders, said that’s absolutely not true. I was able to find Jaclin’s new office phone number through a person that was answering phones in Joe Lucosky’s New Jersey office though. A GPS search shows the new office number, 609-245-0732, is somewhere near the Princeton NJ area. I also learned after the SEC case was announced Jaclin, who hasn’t lost his law license, is still taking meetings with players in the microcap space and apparently trying to still practice emerging growth companies. It’s not clear what clients stuck with him but we did confirm a recent equity crowdfunding deal that was all set to go public on the OTC Markets, BeautyKind, had to not only fire Jaclin as their SEC lawyer but also pulled the whole deal while it was closing. I reported for Growth Capitalist BeautyKind has since said in SEC filings they hope to redo the deal and list on the NASDAQ this time.

We’ll be watching to see if Jaclin backs down and settles with the SEC or if the DOJ brings criminal charges against him like they did his co-conspirator.

*The names of the former Jaclin associates hired by Lucosky Brookman LLP are Steven Lipstein and Jason Ye.

Microcap Attorney Jaclin’s Co-Conspirator Turned DOJ Witness in Shell Factory Scheme

This story has been updated

A 20-year veteran of Microcap financing deals, attorney Gregg Evan Jaclin, has been charged with running a shell-factory shop and securities fraud for nearly a decade. Yesterday I reported at Growth Capitalist the government has been building their case against Jaclin and his co-conspirator Imran Husain for years. Jaclin is accused of filing false opinion letters that allowed stock, which U.S. securities law says should be restricted, to freely trade within months of a private company going public through buying one of the Jaclin/Husain shells.

Jaclin, who denies the SEC charges, is currently working in the industry as the chairman of the corporate securities group at New Jersey-based Szaferman Lakind LLP. He lives in a million dollar home in West Windsor, NJ with his wife, Jill Gartenberg Jaclin, and their two kids.

Gregg And Jill Jaclin

Gregg And Jill Jaclin

Jaclin previously co-owned a law firm, Anslow & Jaclin, where he allegedly issued false SEC filings for the public shell companies named in the government’s complaint. Jaclin’s former partner Richard Anslow joined another top microcap financing law firm, Ellenoff Grossman & Schole LP, in October 2013. Anslow acknowledged he was interviewed in the SEC investigation of the shell factory scheme, according to his managing partner Doug Ellenoff. Ellenoff also told this reporter Richard Anslow doesn’t believe he is still part of the SEC investigation. I was able to ask Anslow face to face, at the Marcum Microcap Conference in NYC on June 1st, if the SEC had directly told him he is no longer part of the investigation, which centers on false filings and opinion letters written by a firm (Anslow+Jaclin) he co-owned. Anslow shook his head when I posed the question and started to walk away from me really fast. I followed him asking the question again along with asking “are you running away from a reporter’s questions”. Anslow escaped and I never got my answer. Anslow has not been charged by the government in this case.

The Securities and Exchange Commission complaint against Jaclin was filed by the regulator’s L.A. office in the district of Central California federal court on May 12, 2016. The SEC thanked the DOJ team in Northern California for assisting them in building their case but I found it odd they didn’t mention parts of Husain’s sworn plea agreement that talked about Jaclin’s role in coaching Husain, in 2012, to get some of the puppet CEO’s of the shell companies to lie to the SEC when the regulator began investigating who actually had control of the companies. It makes me wonder if these details are being saved for a DOJ criminal complaint against Jaclin. When I reached one of Husain’s lawyers, Victor Sherman, he told me he thought criminal charges were coming against Jaclin.

Nine shell companies were listed in the SEC complaint as being fraudulently built to look like real companies but in my investigation of the alleged scheme I found there were a lot more deals that fit the same pattern as described by regulators. Such as the case against Cary Lee Peterson who bought a shell from Jaclin and reverse merged a company called RVPlus. Although Peterson was arrested in March Paul Fishman, the head of the DOJ in New Jersey, didn’t get a jury to indict Peterson until May 10th- 2 days before the SEC filed their complaint against Jaclin. In the Peterson case the government quotes emails between Peterson and the “lawyer on the deal” negotiating the price of the shell. SEC records show that lawyer is Gregg Jaclin. Peterson is quoted saying ‘I’m not paying that price’ if the restriction on the legend for the shares isn’t removed so I can trade these shares within the first few months. Jaclin and Husain charged between $215k-$425k, which is high, per shell company they sold.

Private companies will pay more for a shell if it’s considered a ‘clean shell’. This means the public company has reported to the SEC for a year and it has a real business plan with at least 40 different shareholders. The scheme laid out in the SEC complaint says nominee shareholders were made up and Husain hired puppet CEOs to pretend to run the companies when it was really him pulling the strings. It’s those actions that are a BIG no-no, according to the SEC.

The New Jersey DOJ confirmed the RVPlus CEO, Cary Lee Peterson, was unable to post bail last week and had to get a public defender, which makes me wonder if the DOJ will also press him to turn government witness against Jaclin and others in the scheme. So far there are no public criminal charges against Jaclin but the pressman for the DOJ in Northern Cal reminded me there could be a sealed indictment against Jaclin that no one knows about.

Allegedly lying in SEC financials for public companies and writing false opinion letters isn’t the only thing Jaclin is culpable of. In 2011, Jaclin and his former law partner Richard Anslow made a press announcement that they were going to merge with a New York-based top-billing microcap law firm named Schenzia Ross Friedman Ference LLP. Yesterday, I reported at Growth Capitalist the merger quickly fell apart because the partners at Schenzia Ross were uncomfortable with some the deals Anslow+Jaclin worked on. Even though no merger docs were ever signed to form the new firm, I found Jaclin was signing opinion letters for S-1 filings with the firm name: Schenzia Ross Friedman Ference Anslow LLP in 2011 and 2012. One such filing was for Health Direct, an issuer listed in the SEC complaint against Jaclin. Harvey Kesner, a partner at Schenzia Ross, told me after reviewing the SEC filing of Health Direct with other partners of Schenzia Ross, “the filing was not on behalf of SRFF and the use of any portion of the firm name is unauthorized”. Signing the wrong law firm name could make an issuer’s S-1 filing considered a false opinion in the eyes of the SEC.

If the statements Husain made in his plea deal are true then Jaclin would have known the SEC investigation started as far back as at least August 2012 when one of their puppet CEO’s was called in for questioning. From that point on when the SEC started asking Jaclin questions he had a legal obligation to tell the issuers trading exchange, OTC Markets, that he was under investigation. OTC’s contract with attorneys who represent Issuers with opinion letters published on their trading platform clearly states under rule 12 in the Attorneys Agreement:

The letter must state to the best knowledge of counsel, after inquiry of management and the directors of the Issuer, whether or not the issuer of the Securities, any 5% holder, or counsel is currently under investigation by any federal or state regulatory authority for any violation of federal or states securities laws, and if so, the details of such investigation must be provided in such letter.

Imran Husain is the only co-conspirator of Jaclin’s named in the SEC complaint. But it’s possible more players in the microcap space will be arrested by the DOJ or charged with an enforcement action by the SEC. One name that comes to mind is microcap financer Barry Honig. I reported for Growth Capitalist the CEO of YesDTC, one of the issuers in the Jaclin complaint, was also arrested and made a plea deal with the DOJ in 2014. His name is Joe Noel. Noel and Husain both said in sworn testimony it was Barry Honig who bought the shell (created by Jaclin/Husain) that YesDTC merged into. The SEC successfully charged YesDTC for being a pump and dump. Noel then went on to say that Barry Honig ‘made him’ hire a stock promoter to aid in the pump and dump of YesDTC and alluded to the notion that Honig was also a control person in YesDTC. This matters because it affects Honig’s 9.99% investment in the company and his timing of when he can sell his shares. Honig has gone on the record through his attorney, Harvey Kesner, that he was not a control person of YesDTC, that he was cheated by Joe Noel, and Noel is lying in his DOJ plea statement. Honig has never been arrested or charged by the SEC for his role in investing in microcap stocks.

Editors Note: May 26 2016
When Jaclin learned I was reporting on him he called my cell phone late Friday night, which was the day after his SEC charges were announced, and left a voice mail he wanted to talk. It was past 9pm and I didn’t call him back that night. At 7am Saturday he then tried to write a somewhat threatening letter to an editor, Shelly Kraft, who he thought I was reporting for. Jaclin tried use the fact his firm had spent money sponsoring conferences of Kraft’s in the past and as a result he should be able to control the line of questioning I was doing researching his background. When I saw the emails Saturday I reminded Jaclin, via email, I am a freelance journalist who is isn’t controlled as a staff writer by any publication and if he had complaints they should come directly to me. I had also pointed out Shelly Kraft doesn’t own the publication I was planning on selling his story to. After that he refused to return my calls and asked for questions in email. Once he saw I had the DOJ secret plea deal from his co-conspirator I got an email late Saturday night that he’s hired an ex-SEC lawyer out of Colorado who instructed him not to comment on the case. But Jaclin couldn’t help himself and still tried to reach out to influence reporting on his case, this time to the correct editor of the publication I sell stories too; his goal appeared to be to muzzle me. Luckily I have an ethical and amazing editor at www.growthcapitalist.com who politely listened to Jaclin’s fear that reporting on his SEC fraud suit and other possible crimes is ’embarrassing his kids’ but my editor didn’t try to stop me from looking into other deals Jaclin might have done that are not legal and gather more evidence of his alleged crimes. The level of reporting and type of coverage I am allowed to do at www.growthcapitalist.com is unique, impactful, and full of details to help inform and warn the market. As a result the coverage is behind a paywall and you have to pay for it. I encourage anyone who invests in small cap stocks or cares about free markets to try subscribing. It’s worth it!

Attorney Harvey Kesner sanctioned in Frivolous Lawsuit relating to MabVax: $MBVX

UPDATE July 17,2020: Harvey Kesner has dismissed his $35 million lawsuit against law firm Baker Botts and attorney Johnathan Shapiro for allegedly getting him fired when they told his former law partners that among other things they found attorney Kesner had assisted in a coverup for MabVax in a regulator investigation. Kesner’s attorney is Steven S. Biss who is known for his Rep. Devin Nunes lawsuits against Twitter and a parody Nunes Cow account. Attorney Biss didn’t bother to file an answer to Baker Botts motion to strike, which demanded attorney fees be paid for filing a frivolous lawsuit and retaliating against Baker Botts for their representation against Kesner in another related lawsuit. Instead two days after the missed deadline of July 13 he just filed a dismissal but without prejudice. This mean Kesner could try and file the complaint in another court–a move we have seen attorney Biss try over and over.

Additionally, Baker Botts told the California federal judge that Kesner’s dismissal isn’t going to stop them from asking for attorney fees under the anti-slaap laws in California. The next step is a hearing that was scheduled for July 27 where we could see if the Judge makes Kesner pay for his frivolous lawsuit.

Harvey Kesner is the long time securities lawyer for pump dump fraudster Barry C. Honig who was banned by the SEC last year and is allegedly still under criminal investigation. Attorney Kesner is currently battling a malpractice lawsuit filed by biopharma company MabVax. Baker Botts represents MabVax Therapeutics.

Original Story June 25, 2020
Penny stock lawyer Harvey Kesner has been sanctioned and fined after his lawyer, Steven S. Biss, disobeyed a New York federal judge’s order and tried to file a frivolous amended complaint accusing a big law lawyer of extortion and threats. The Judge lobed a one two punch and also granted the defendants, Baker Botts, motion to move the lawsuit filed in the Southern District of New York to Southern California where strong anti-slapp laws exist. Kesner is the long time lawyer for Barry C. Honig, who the SEC says mastermind a pump and dump stock fraud ring in over 40 stocks. Anti-Slapp laws will allow the defendants Kesner sued to ask the court to force him to pay their legal fees and impose penalties because the suit was allegedly filed as retaliation for Kesner being sued for fraud and malpractice.

Kesner’s main target of the litigation is Jonathan Shapiro, a lead litigation partner of Baker Botts. The lawsuit filed earlier this year for $35 million claims attorney Shapiro hatched a plan with a former client of Kesner’s, MabVax Therapeutics, to give evidence from an independent legal review of the investments made in the biotech company and subsequent disclosure in SEC corporate filings, to the Securities and Exchange Commission and the Dept of Justice that could lead to charges against attorney Kesner. The theme of Kesner’s lawsuit is that Kesner’s law firm was told they would have to pay Mabvax $9.6 million for Kesner’s alleged malpractice actions or the feds get the evidence. Evidence that includes Kesner allegedly advising Mabvax how to mislead a regulator in 2016 when they began questioning MabVax’s public filings and trading in the stock. Kesner was a named partner at New York based securities law firm Sichenzia Ross Ference. I was first to report Kesner was leaving the law firm, in the fall of 2018, on questionable grounds just weeks before his client, Barry Honig, was charged for securities fraud by the SEC.

A draft copy of the malpractice complaint, written by attorney Shapiro, obtained by this reporter, shows partners at SRF likely learned about Kesner’s alleged role in the Honig scheme just a month before the SEC filed their case against Honig. The suit was never filed in court. Instead a Boston-based law firm, Block & Leviton, filed a similar malpractice suit for MabVax a few weeks after Shapiro approached Kesner’s law firm for a settlement. And Baker Botts ended up suing all of Team Honig and others for their role in manipulating the stock price of MabVax and for trading as a group of undisclosed affiliates.

Baker Botts response to the complaint was swift, filing a motion to dismiss detailing how Kesner wasn’t telling the whole truth, after a trade publication for the legal profession, Law360, reported on the lawsuit glamorizing Kesner’s idea of being a victim of a RICO plot. Court filings show Kesner’s lawyer, Steven Biss, has a practice of saying outrageous things in lawsuit with the hope that the media will repeat them because his clients can’t be sued for libel or defamation for something their lawyers write in a lawsuit.

SDNY judge Hellerstein wrote in his decision to fine Kesner and move the case:

“After careful review of Defendants’ moving papers and Kesner’s Complaint, I hold that this case should be transferred to California. Without cataloguing what appear to be a number of glaring factual inaccuracies in the Complaint, or reviewing each and every one of
Defendants’ arguments for dismissal, I focus here solely on the need to transfer this case.”

Judge Hellerstein goes on to explain that Kesner repeatedly said in his complaint that Baker Botts sent a letter threatening to file a malpractice lawsuit without any intent of ever filing the suit but this just wasn’t true given a malpractice suit, that also accuses Kesner of fraud, was filed by another law firm a few weeks latter. As a result the judge order Kesner to pay at least a $1,000 fine for filing a frivolous motion and denied attorney Biss request to file an amended complaint.

A federal judge acknowledging that an untrue set of facts was written by attorney Steven Biss on behalf of his client, could be helpful for other defendants subject to attorney Biss’s pattern of vexatious litigation. Biss is currently suing multiple top media outlets like CNN, Washington Post, Hearst, McClatchy News for their coverage of U.S. Congressman Devin Nunes. Yesterday a federal judge ruled in Virginia that Nunes, through attorney Biss, can’t sue Twitter to reveal the identity of a parody account called Devin Nunes Cow that writes satire critical of the California congressman and others. Kate Irby was first to report on the outcome of the Twitter case. Additionally, other federal judges have warned attorney Biss that he could sanctioned. Sanctions for lawyers usually mean they will have to pay a fine but it can also mean suspension of a law license for not following their code of ethical practice.

Baker Botts wrote in their anti-slapp motion yesterday filed in Southern California that Kesner hasn’t even paid his court ordered fine yet.

Additionally, Biss is suing this reporter and Bill Alpert a senior reporter at Barron’s on behalf of Harvey Kesner. Alpert and I have never reported together. Like the Baker Botts case Kesner is trying to blame the journalist for ruining his career by reporting on litigation against him and his clients. The case was originally filed in South Florida where Kesner says he now lives. I have been representing myself Pro Se and worked with the Barron’s lawyer to get the case moved to SDNY. A judge ruled Florida was an improper venue for Kesner/Biss to file the case. Biss is joined in this litigation by a Florida lawyer Robert Buschel who says he is second chair. The duo are the same legal team that sued Baker Botts.

Attorney Buschel was also reprimanded by a the New York judge in my case when he tried to represent a wrong timeline for when Kesner left his law firm and how it related to the timing of the Barron’s article on his client.

Kesner’s goal in his litigation against me appears to try and use the courts to force me to reveal confidential government witnesses I interviewed in my reporting on his alleged role in the scheme tied to Barry Honig’s securities fraud. I stand by my reporting and have no intention of revealing sources even if it means I would be held in contempt. I am currently raising fund from readers to pay for my legal defense of this frivolous and harassing lawsuit. Remember Barry Honig also tried to sue me for reporting he was under SEC investigation in the fall of 2016 and then withdrew the lawsuit with prejudice in January 2018. That same year he was charged by the SEC for exactly what I reported he was doing. Evidence that has come out in the Honig ring investigation appears to show that while Honig was suing me he and Kesner knew Honig was under SEC investigation.

Additionally, the SEC has now come out and made public a transcript from one of their enforcement interviews in the investigation of the Honig securities fraud ring. As far back as 2014, the SEC was questioning another attorney Kesner worked with, Gregg Jaclin, about why Kesner was getting stock in a reverse merger deal involving PR Complete / YesDTC via an llc he owns called Paradox Capital. Jaclin was a partner in a securities law firm known for doing reverse merger deals called Anslow + Jaclin. Gregg Jaclin was sued for running a dirty shell company scheme by the SEC along with being charged with a felony in 2017 by the San Francisco DOJ for obstruction of justice in an SEC investigation. YesDTC and its CEO Joel Noel where charged criminally for running a pump and dump scheme. Jaclin has since made a plea deal in the criminal case and it’s unclear how much cooperation he is giving the DOJ in their case against Barry Honig and associates because his case is now sealed.

EDITOR’s NOTE: If you want to contribute to my defense fund in the frivolous lawsuit filed by Harvey Kesner please do so here.

The funds will go directly to the lo-bono attorney I will hire.

More Charges Coming for Barry Honig P&D Ring Defendants $MGTI

A defendant in the Barry Honig pump and dump securities fraud case disclosed last week the Securities and Exchange Commission is planing on filing additional charges. On Dec 5, 2019 Robert Ladd, CEO of MGT Capital ($MGTI) received a Wells Notice from the Regulator, which stated the new charges related to disclosure issues in public filings and trading volume.

Senior reporter Bill Meagher also reported on the coming SEC lawsuit for The Deal today. The Deal highlighted the SEC’s recent activity dolling out multiple subpoena’s to the adult sons of Honig’s right hand guy Michael Brauser. Barry Honig plead guilty last year and agreed to a ban on penny stock investing but three members of his crew are still fighting the SEC case along with Ladd the CEO of one of the companies Team Honig invested in and allegedly manipulated. Remaining defendants Michael Brauser, John Stetson, and John O’Rourke were all placed as executives in the manipulated stocks and held controlling board seats, according the SEC. Their control positions gave them the opportunity to force the company to use lawyers, promoters, and transfer agents who are alleged to be in the pocket of Barry Honig. The SEC labeled Honig the ring leader of the scheme in their complaint and Honig’s plead deal says he can not deny their charges publicly.

The Deal‘s story also covers the fact that the new SEC subpoena names individuals who have not been charged by the regulator —yet. This includes Honig’s long time securities transaction lawyer Harvey Kesner and at least four lawyers who worked with him at New York-based Sichenzia Ross Ferance LLP. I was first to report attorney Kesner was leaving the firm, where he was a named partner, just weeks before the SEC charged his client in September 2018.

Letters to the New York federal judge covering the case filed by the SEC and hearings over discovery have disclosed the Regulator also plans to bring another pump and dump case against some of the defendants in a new stock where securities violations occurred after the defendants were charged by the SEC in September 2018. But at a hearing I attended this fall, only Judge Ramos was informed which company it is. This upset defendant Michael Brauser, who through his counsel, argued that the SEC was playing fast and loose with his reputation and wasn’t practicing ethical judicial standards by not disclosing the name of the new stock the SEC was investigating. Judge Ramos ruled at this point the SEC doesn’t have to disclose the company to the defendants.

But a glimpse of who the SEC is focusing on can be seen in a recent subpoena sent to Brauser’s son Ben Brauser. The SEC list 33 companies, which includes Red Violet ($RDVT) and Fluent ($FLNT), that it wants private documented information on. Red Violet and Flint have both seen extreme swings in their stock price in the last year. Ben Brauser filed a motion in South Florid Federal Court to squash the subpoena in November. This was the first time the investing public learned Ben was also working as a securities lawyer for his dad Michael since 2010. Ben, who invested in some of the stocks at the heart of the SEC case, is now trying to say he doesn’t have to turn over everything the SEC is demanding, which includes trading records and emails to stock promoters because he conveniently has attorney client privilege. The lead SEC attorney on the case, Nancy Brown, has fought back and filed a five page letter to the judge arguing why Ben Brauser shouldn’t have attorney client privilege and could have aided his father in his scheme.

Attorney Brown also delivered a one two punch disclosing the names of two other promoters the Regulator was focusing on which includeds: Drew Ciccarelli and David Zazoff along with stock investment advice and promotion companies TSX Ventures, RedChip Investor Relations, Mission IR, Third Coast Media, SmallCap IR, and Stockbeast.

I was first to report for trade publication Growth Capitalist in 2016 that promoter David Zazoff was named in a plea deal statement in a Northern California DOJ criminal case tied to Joe Noel the CEO of YesDTC for taking kickbacks. Noel said it was Barry Honig who directed him to pay Zazoff to run stock promotions without disclosing it.

Recent SEC subpoenas also named 64 people it wanted information on; many of which were not charged in the original September 2018 case. Given the fact that defendants in the SEC case have also admitted in open court to signing tolling agreements with the Dept of Justice, the investing public has been anxiously waiting for the Northern California DOJ to bring their criminal case. Individuals who have already plead guilty in DOJ securities fraud cases and allegedly worked with Team Honig are: Joe Noel, microcap attorney Gregg Jaclin, and promoter Jeff Auerbach who just plead guilty on January 10th. All of these individuals have made plea deals and are assumed to be cooperating with the DOJ in other cases.

It’s also unclear which of the defendants in the original SEC case against Team Honig that have made plea deals with the SEC are now cooperating with the DOJ. Barry Honig, Philip Frost and Mark Groussman could all be singing to the Feds in a move to get less criminal charges or deferred charges.

The coming second amended SEC case could also name new defendants.

Editor Note: Honig attorney Harvey Kesner has sued me and Bill Alpert at Barron’s for our individual reporting on his alleged role in the Honig pump and dump case. I have continued to report on Kesner since he brought his suit and have seen his name come up in a new SEC subpoena since he brought the lawsuit. We are waiting for a federal judge to decided on a motion to dismiss. I stand by all of my reporting on Harvey Kesner. Harvey Kesner has not yet been charged by the SEC but he is being sued for malpractice by one of the companies, MabVax, in the SEC complaint

SEC Pump & Dump Case leads to Barry Honig Banned from Penny Stocks

Microcap investor and promoter Barry C. Honig has agreed to be banned from the business of investing in and financing publicly traded small cap companies. On Monday June 17, 2019 the Securities and Exchange Commission asked U.S. District court Judge Ramos to approve a settlement with Honig and his investment fund GRQ Consultants. In September 2018 the regulator brought an enforcement lawsuit in the Southern District of New York against Honig for his role as the leader of a pump and dump securities fraud ring dating back to 2013 that involved at least nine other individuals. Honig agreed to restrictions on his behavior relating to the stock market but not to the amount of a financial penalty. The disgorgement and penalty phase of the settlement will be litigated down the road. News of Honig being under SEC investigation was first reported by me in 2016 at trade publication Growth Capitalist when I learned about an SEC subpoena naming Honig and others charged in the SEC case.

The lack of a determined financial penalty at settlement is not unique, even as we have seen Honig’s other co-defendants like billionaire Philip Frost agree to pay $5.52 million when he announced his SEC settlement. Honig’s long time investing partner Mark Groussman agreed to pay $1.38 when he settled with the SEC in February. However, two other co-defendants agreed to similar terms that calculate monetary damages at a latter date.

SEC settlements are filled with confusing legal language that can be unclear to anyone who isn’t a lawyer and the regulator is usually not keen to explain them further. I asked a former SEC enforcement lawyer, who is now experienced in litigating against the SEC as a white-collar defense lawyer, to review the settlement. The lawyer told this reporter, “This is an interesting injunction because the SEC uses conduct-based injunctions or bars. It is also a bifurcated settlement. That just means that the settlement only pertains to the liability and not the monetary side (disgorgement and civil penalties). You typically bifurcate when it is a slam dunk on the liability so it saves money to only fight about the money side of things. I suspect they are asking for an outrageous amount of money.”

The SEC claimed Team Honig executed a $27 million scheme. The most the SEC has ever gotten an individual defendant to pay is $20 million in the Elon Musk case. It’s unclear how much it would take for a SEC fine to make a dent in Honig’s personal finances. He currently lives in an $8.9 million water front home in Boca Raton Florida, sends his children to an expensive private school and travels on private planes.

The SEC settlement also bars Honig from promoting penny stocks or trying to control the actions of a director or officer of a public company.

The settlement doesn’t mean Honig cannot try to continue making money from prior investments. One of those investments, PolarityTE, is precluded from the settlement, and is considered by many observers to be a current pump and dump.

Journalist Chris Carey of Sharesleuth.com pointed out to his twitter followers yesterday that the penny stock bar Honig agreed to does not effect his stock ownership of PolarityTE ($PTE) and Americas Silver Corp ($USA.TO). Carey said, Honig’s last disclosed ownership in both stocks is higher than 5% so Honig would have had to sell stock in those companies to comply with the settlement and there is no public record of him doing that.

Carey has been warning main street investors about Honig by reporting on problems with Honig’s public disclosure of actual share ownership. In March 2018 he wrote a detailed story, with journalist Jim McNair, showing Honig’s team used promoters with fake names who did not disclose they had been paid to promote stocks Honig and his associates invested in.

The Sharesleuth.com reporting has now shown up in a civil malpractice suit against Honig’s deal lawyer Harvey Kesner and was detailed in the SEC’s amended complaint against Honig filed this year. The amended complaint added paragraphs with more extensive detail about how Team Honig used the undisclosed promotional stories, by John Ford, John O’Rourke (as Wall Street Adviser) and “Writer E’” who appears to be Peter Epstein. Epstein’s activities were exclusively reported by Carey last year before the SEC filed their lawsuit.

Last month I reported SEC attorney Nancy Brown admitted at a hearing over discovery that the Northern California DOJ is running a parallel investigation to the Honig SEC case. An attorney for Honig’s co-defendant, John O’Rourke, even said one of the defendants in the SEC case is currently acting as a whistleblower for the DOJ and they expected the DOJ to bring an indictment soon. The Street is now left guessing who will be charged by the DOJ and who is making a deal. The SEC settlement has a paragraph that says Honig can’t deny the SEC’s allegations but he also doesn’t admit to them, which could shield him from instant criminal liability. That means the DOJ has to build a case with charges they think a jury can convict beyond reasonable doubt.

“Everything else is subject to the qualification in the first paragraph of the settlement “without admitting or denying the allegations” — It can’t be used as the basis for a criminal case because it is not an admission. However, the SEC can give the DOJ all of the information they have which would likely be enough for the DOJ to bring a criminal case,” according to a former SEC enforcement attorney who reviewed the settlement.

The San Francisco DOJ has been building a case against Honig and people who worked with him since at least 2014. I was first to report on two criminal plea deals obtained by the SF DOJ that named Barry Honig for his role in the pump and dump scheme of YesDTC. The company’s CEO, Joe Noel, pled guilty to the scheme but Noel’s court records have been sealed so we do not know whether he has been sentenced or is still working with the FBI.

A L.A. man named Imran Husain was also arrested in the case and named Honig in his plea agreement. I first reported on Husain for trade publication Growth Capitalist in May 2016 when his partner in the scheme was charged by the SEC. That partner was a well-known microcap deal lawyer named Gregg Jaclin. Jaclin was later arrested in 2017 by the SF DOJ adding criminal charges to the actions detailed in the SEC case. Attorney Jaclin said he would fight the case to trial but with new filings sealed, the status of the case is unclear. With recent documents in the Husain and Jaclin case sealed by the DOJ, the question is whether both men could be viable witnesses for the DOJ in a case against Honig. On June 7th the DOJ finally filled a request to set a sentencing date for Husain in October. The motion filed in federal court said Husain had been cooperating on another case, on which the DOJ was working that involved Gregg Jaclin. Since it was alleged that Jaclin sold shell companies to Honig( in order for Honig to get restricted stock unrestricted to aid in the pump part of the YesDTC scheme), flipping Jaclin could be key to the DOJ’s case against Honig and his associates.

SEC admits Team Honig is under the criminal investigation I warned about in 2016

The Securities and Exchange Commission has now confirmed there is a parallel investigation into the Team of bad actors that work with Barry C. Honig in the microcap pump and dump ring he allegedly leads. I was first to report in the fall of 2016 that the San Francisco Dept. of Justice was investigating this group, which included Honig, Michael Brauser, and Miami billionaire Philip Frost.

Nancy Brown, the lead lawyer for the SEC in the Team Honig case, said during a hearing on May 15 that “there is a parallel criminal investigation. It’s not a dual investigation, it’s a parallel investigation,” according to a court transcript from the SEC’s case against Honig, Brauser, Frost and friends.

I was first to report the Northern California DOJ flipped their first witness against Barry Honig back in 2014 via a small cap CEO named Joel Noel who plead guilty to securities and wire fraud. Noel, who ran a company called YesDTC, said that Honig knew how to buy shell companies set up by a lawyer who would release shares that should be restricted as unrestricted so trading in their pump scheme could begin fast. Noel also said Honig told him to pay a promoter, named David Zazoff, to get false press releases out to push the stock price up. The lawyer who sold the shell, Gregg Jaclin, was also arrested by the Northern California DOJ in 2017. According to a person involved in the investigation Jaclin and Honig had worked together before and Jaclin could be a viable witness for the DOJ to build their case. Jaclin’s case has been sealed since the SEC brought their charges against Honig.

Why the San Francisco office of the DOJ has waited this long to bring their case while investors in companies like $RIOT, $MARA, $MGT, and $MBVX have gone through Honig lead pump and dumps has been a mystery till now. That’s because at the May 15th hearing about a discovery schedule John O’Rourke’s lawyer Gregory Morvillo tells Judge Ramos he knows some of the defendants in the SEC vs. Honig case have signed tolling agreements with the San Francisco DOJ. This is a stunning admission. Tolling agreements allow the DOJ an extension of time to bring a case past the standard statue of limitations. Attorney Morvillo also said he thinks the tolling agreements have expired as a reason for why the San Francisco DOJ would be bringing an indictment soon. How Morvillo knew about the tolling agreements could signal his client John O’Rourke is one of the defendants that signed one of them.

Scott Zamost and Jenny Schlesinger, two CNBC print reporters, apparently went down to the SDNY court house yesterday and read a copy of the public transcript in the SEC vs Honig case. They were first to report on what the SEC said about the existent of a parallel criminal investigation. The transcript also shows John O’Rourke’s lawyer telling the judge that he thinks someone in the SEC Honig case has become a DOJ cooperating witness now and by that person being a songbird the DOJ could bring an indictment soon. The conversation started because Michael Brauser along with Robert Ladd, CEO of MGT Capital, have been pushing the SEC to show them their evidence via writing aggressive letters to the judge. O’Rourke’s attorney spoke up in court to join that argument. Attorney Morvillo told Judge Ramos “We are behind the eight ball here” in reference to how the SEC has been holding up their evidence.

Morvillo went on to say, “If one or more of our clients gets indicted you can bet we will be back here asking for a stay in this case. In the meantime, while San Francisco drags its feet on this, we don’t think it’s appropriate for the SEC to act as a stalking horse for the U.S. Attorney office.”

I reported this month the SEC has played a stall game putting off defendants in the case from getting discovery by delaying motion filing dates and extending times for defendants like Honig to sign a settlement agreement. The SEC said in a letter to Judge Ramos last month that Honig has agreed to settle their case in principle but it’s not a signed deal yet and the SEC commissioners have to vote on it so the judge gave them a six week extension on the defendants filing their motion to dismiss. Scott Zamost and Jenny Schlesinger at CNBC are likely wrong when they reported that Honig’s settlement was called off.

The court transcript shows SEC attorney Brown was trying to get judge Ramos to scheduled the defendants for depositions with the SEC before all the discovery is due April 30 2020. Robert Ladd, CEO of MGT, Michael Brauser, John Stetson, and John O’Rourke wanted the depositions to be latter in 2020 closer to the end of discovery. The debate in court was the SEC was worried that the defendants would get all their discovery and then assert something called “the act of production doctrine”. This would mean the defendants like O’Rourke and Brauser could tell the SEC they aren’t going to turn over their emails that the SEC has asked for because it could incriminate them in the DOJ case. The SEC said they had from 600,000 to 1.2 million of documents to turn over for discovery. The SEC also admitted a lot of the docs came from a laptop that the ex-husband of a former MGT Capital employee had. It’s unclear if those docs will be admissible since the laptop was likely stolen in a bitter divorce battle, according to a person involved in the case. The whole discovery and deadline delay drama is like an episode of Billions where the government plays dirty tricks to get convictions and the Wall St bad actors have better lawyers to outsmart them.

I don’t know who the new Honig cooperating witness is that O’Rourke’s lawyers says the DOJ has under their thumb. And I highly doubt O’Rourke’s lawyer knows if the DOJ is wrapping up their case unless he has made an agreement for his client to self surrender. Chris Carey at www.sharesleuth.com was first to notice Frost’s company $OPK had mentioned in recent SEC filings that while Frost had settled with the SEC ‘other government agencies’ could also bring a case. John Ford who lives in Northern California was the first member of the group to settle with the SEC before the case was brought and court docs show he has been cooperating. Additionally, another stock promoter who was charged criminally by the DOJ in stocks that Honig did not invest in has made a plead deal with the DOJ this week. Brian Robert Sodi, known as the Mailman, worked with a lot of bad actors in a lot of stocks and the DOJ only charged over a few stock frauds. I have confirmed the DOJ could use him to testify against Honig because Honig had worked with him. Sodi’s attorney Brent Baker of Clyde Snow LLP told me today, “Brian is looking forward to the whole truth coming out now and is now ready to put this matter behind him.” Sodi plead guilty to only one of the ten counts of wire and securities fraud against him and could be asked to pay up to $2 million in restitution. His sentenced will be delayed now until the government is done using him as a C.W.

The CNBC reporters didn’t attend the SEC vs. Team Honig hearing. Or get anyone else in the case to try and talk about who the DOJ recently flipped. They also failed to report the questionable tactics the SEC has been using to try and get the defendants to do depositions before they got all the SEC’s discovery.

Schlesinger and Zamost also mislead their readers when they reported this was the first time a criminal investigation into Team Honig had been confirmed. They broke basic journalistic ethics by not reporting the San Francisco DOJ investigation was first confirmed and reported by me at this publication a few years ago. I had confirmed in 2016, via a lawyer for an investor victim in the case who was interviewed by the SF-DOJ, an interview with a Honig co-conspirator who was also interviewed by the SF FBI, and had a copy of a FBI case number for the Team Honig investigation before I went to print. I did on-the-ground shoe-string reporting to get this important news out to investors unlike the CNBC print reporters who simply read a court transcript first and then executed journalism theft by not linking and credit the first reporter to break the DOJ news. At this publication I always name, link and credit any publication and the journalist who reported news first because it’s likely they have good sourcing on a story and readers should know that.

Additionally Honig was so freaked about about me finding out about the SF-DOJ investigation that he used anti-media lawyer Charles Harder to sue me in 2017 and tried his best to get the story taken down and to get an apology from me. I fought the case for a year and won. Honig dismissed his suit in January 2018 and the reporting stayed up and was sourced in other news reports. Additionally now that we know there were tolling agreements signed I think Honig knew he was under criminal investigation when he sued me and so did his attorney Charles Harder, which is one of the most unethical things a lawyer could do. Clearly the point of the lawsuit was for Honig to try and figure out who I knew was talking to the FBI and SEC. But I held my ground and never told even as discovery was starting.

Criminal charges are the only thing that have a chance of stopping the Team Honig pump and dump ring given the SEC has shown they are accepting low dollar fines from defendants that have settled. Philip Frost paying $5mn is less than his spends in his bar bill in a year. A ban on being a director in a penny stocks could slow Honig down but I don’t see how it helps given he has a file-a-fax of rent a board member guys he can call. The SEC amended compliant, filed in March, clearly shows Honig is willing to break the law and pay others like John Stetson to make hidden investments he is really funding so even if he is banned he could get nominees to do his dirty work. Jail time and a felony convection is the only strong hold the government has if they really want to protect investors and clean up the microcap market. Let’s hope the DOJ gets off their butts and acts soon as there are current Honig pump and dumps happening that likely include PolarityTE, Marathon Patent and RIOT Blockchain.

This story has been updated with details of the tolling agreements with the DOJ and news about the problems with discovery in the SEC case.

May 15th Court Transcript can be read here

MGT Capital Receives SEC Subpoena Seeking Information about Barry Honig and Eight Other Individuals

Microcap investor Barry C. Honig is a subject of an SEC subpoena related to his role in trading and investing in shares of MGT Capital ($MGT). MGT Capital is trying to complete a reverse merger with famed tech entrepreneur John McAfee. I am reporting exclusive news today for Growth Capitalist on what’s inside the Securities and Exchange Commission subpoena MGT Capital announced was lobbed against them late last week.

News of the SEC formal demand for answers from the company delighted short sellers to the tune of a 40% drop in MGT’s stock. The company, currently run by CEO Robert Ladd, says it does not believe the SEC is targeting any of the company executives. But shareholders have expressed doubt this week given the lack of details the company was allowed to disclose about the regulatory investigation. On top that the NYSE, where MGT trades, announced it wouldn’t accept the new shares that are set to be issued in the reverse merger with John McAfee’s cyber security companies. The national stock exchange was kind of a jerk about it because they didn’t offer up a reason for the share issuance halt. Unfortunately, it’s a big clusterf–k of unknowns for the company and shareholders right now.

But one thing that my reporting makes very clear is the SEC wants to make sure Barry Honig isn’t’ doing anything shady (or out right illegal) with this company. According to insiders who saw the SEC subpoena, a large portion of the regulator’s questions are about Honig, his company GRQ Consultants, and people who invest with him. I can also confirm Honig has been calling SEC enforcement defense lawyers this week looking for representation. I first reported on Honig’s alleged illegal actions in my “Attorney Gregg Jaclin blew up his life and got busted for creating a shell factory scheme” story this Spring. The central theme of alleged bad behavior is Barry uses other people to run a company he is secretly controlling and indirectly pays stock pumpers to tout the company without disclosure.

You can see here in a DOJ plea deal made by one of Honig’s alleged puppet CEOs how Honig allegedly runs things behind the scene. This plea deal was first reported and unearthed by me in a story for Growth Capitalist in May.

The SEC has never been able to pin anything on Honig. We do see a FINRA action settled against him as a young trader in 2000 when he was working for a questionable PIPE financing firm called Ramius Capital (or Ramius Securities). On June 14, 2000 FINRA said Honig had acted as an affiliate trading with others and hid it by running the trade through two people instead of one.

Barry Charles Honig (CRD #2362713, Registered Representative, New York, New York) submitted a Letter of Acceptance, Waiver, and Consent in which he was fined $25,000 and suspended from association with any NASD member in any capacity for 10 business days. Without admitting or denying the allegations, Honig consented to the described sanctions and to the entry of findings that he sought to inappropriately coordinate a trade report to ACT with another market participant as two separate trades instead of one.

Honig has a SEC deal lawyer, Harvey Kesner at www.srff.com , who apparently has been able to keep the SEC at bay in tons of questionable pump and dump deals Honig invested in. I know from interviewing MGT’s executives and reviewing Honig’s financing transactions that he wasn’t a control person at MGT. CEO Rob Ladd, who used to run a hedge fund, put blockers in Barry’s finance deal that don’t allow him to own a certain percent of the company. What we don’t know is whether Barry teamed up with his favorite investing partner Michael Brauser and acted as an affiliate in trading MGT stock, which blew up to a 700% gain when news of a John McAfee merger was announced in May. Affiliate trading without disclosure is a big SEC no-no, which I explain my story today at www.growthcapitlist.com. Honig through his attorney did not return a request for comment.

For now it’s a wait and see as MGT scrambles to get the SEC to clarify to stock exchanges that the reverse merger deal is clean. And market participants sit on the side line to see if the SEC can get the goods to finally charge Barry Honig.

Clarification 9.23.16: Barry Honig is pulling out the big legal guns apparently worried about anyone reporting on what’s inside that SEC subpoena. As of 5:30pm I was contacted by a California attorney, Charles Harder (who repped Hulk Hogan), for Honig demanding to have the story taken down and to write an apology. I refused and stand by the sourcing in this story. I have spoken with people who have seen the subpoena again and clarified a sentence in the story that relates to a large portion of the SEC’s questions are centered on Barry Honig, his company and people he invest with. The original sentence said “90% of the SEC questions are about Barry Honig.” Additionally, Honig had two days to respond to questions about the subpoena before the story ran and refused to return a call and email for comment.

Update 10.7.16: One of the sentences in this story that Barry Honig has denied through his attorney Charles Harder is that he invest with Michael Brauser. Harder wrote in item #9 in his demand letter they sent me to get the story taken down:
“Implication that Mr. Honig “teamed up with his favorite investing partner Michael Brauser”. False; the two have not teamed up.

I’d like to take the chance to remind readers of this 2012-2013 litigation against Barry Honig, Michael Brauser, and the Brauser Honig Frost Group for their role in Biozone Pharmaceuticals, Inc. It was filed by the company’s former founder Daniel Fisher. This is from Fisher’s amended complaint filed in Northern California District Court on 11.22.12 . Case number 3:12-cv-03716-WHA

“In January 2011, Plaintiff Fisher met with a group of investors, the Defendant representing
itself as Brauser Honig Frost Group (“BHFG”). Over the course of the following six months, this
group of investors misled Plaintiff Fisher through an investment scheme designed to divest
Plaintiff of all of the economic rights and goodwill he had built through his company over the
course of the previous 22 years.”

After Fisher beat their motion to dismiss and the case moved into discovery we see the case was settled with the defendants paying Daniel Fisher half a million dollars.

And that’s just one reason why I stand behind my reporting, opinion, and sourcing in this or any story of mine on Barry Honig!

UPDATE 11.4.16 : I have filed a letter to the federal judge in Honig’s lawsuit against me that you can read here. Honig used a process server who lied in an affidavit that he served me. I have video to prove he is lying. Additional, I informed the judge Honig asked MGT Capital CEO Rob Ladd to call me and set up a private ‘off books’ meeting. A move that is pretty much a no-no legal tactic given he sued me. His lawyers are supposed to be the ones to contact me. I obviously said no to the meeting and told Rob Ladd if Mr. Honig wants to speak to me and comment on any of my reporting he can call me through his attorneys – he has enough of them. This secret meeting tactic is something I have learned he has used in other litigation…it feels like the purpose is to try and figure out if I am going to give up names of my story sourcing.

I still need a pro bono lawyer to go up against Hulk Hogan’s attorney Charles Harder. Honig apparently tried to hire Harder (an expensive lawyer who has been in the news for his anti-journalism legal work) to scare me into stoping reporting and it didn’t work. If you are interested in this easy to win suit please email me at teribuhl@gmail.com. I’ve been told NY laws make it favorable to sue back for attorney fees in NY court and this is an easy case to win given my sourcing and the fact a lot of what I wrote here is opinion. Donations are also helpfully now in case I have to defend my self pro se.

UPDATE 1-10-17: I’ve secured a top first amendment lawyer to represent me pro-bono. Chuck Tobin of Holland & Knight filed last week in Manhattan Federal Court to be lead counsel. We have till February 10th to file a response to Honig’s claim. I would like to thank Holland & Knight for stepping up and defending the rights of a freelance journalist.

UPDATE 2-21-17:Barry Honig voluntarily withdrew his lawsuit against me on February 8th. This was two days before my attorneys were due to file our motion to dismiss and we were given no warning or notice of why the suit was being dropped. I thought the litigation was over but now it looks like Honig and his attorney Charles Harder were just making a move to judge shop because today I got a repeat retraction letter asking again to take down my reporting and apologize. It’s my expectation that team Honig will just refile their suit in another court or another state which means the bullying of this journalist for reporting on a matter of public concern continues.

UPDATE January 2018: On September 15, 2016, MGT Capital received a subpoena from the Securities and Exchange Commission. The subpoena requested documents and communications between MGT and Barry Honig. It also sought documents and communication between MGT and eight other individuals and eleven entities associated with the individuals.

I have not confirmed with the SEC that Barry Honig is in fact the subject or target of any SEC investigation. No person at the SEC has ever informed me that the SEC is investigating Mr. Honig. The SEC, when called for comment, told me that they do not comment on ongoing investigations.

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