SEC Wins Summary Judgment Against Unregistered Penny Stock Dealer Justin W Keener
On January 21, 2022, Judge Beth Bloom of the United States District Court for the Southern District of Florida granted the SEC’s motion for summary judgment against Justin W. Keener d/b/a JMJ Financial.
The SEC’s complaint alleged that Keener failed to register as a securities dealer with the SEC, or to associate with a registered dealer, when he bought and sold billions of newly issued shares of penny stock from at least January 2015 through January 2018.
Keener obtained the shares directly from issuers after converting debt securities known as convertible notes. By failing to register, Keener avoided certain regulatory obligations for dealers that govern their conduct in the marketplace, including regulatory inspections and oversight, financial responsibility requirements, and maintaining books and records.
The court ruled that Keener met the statutory definition of “dealer” because he operated a regular business of buying and selling securities for his own account. The court found that his failure to register as a dealer, or associate with a registered dealer, violated the dealer registration provisions of Section 15(a) of the Securities Exchange Act of 1934.
The court also denied Keener’s cross-motion for summary judgment.
The summary judgment against Keener follows several other actions against toxic lenders engaged in unregistered broker-dealer activity by regularly buying convertible notes from penny stocks issuers.
- On September 24, 2021, the SEC filed an enforcement action against Carebourn Capital L.P. and its managing partner Chip Rice.
- On August 13, 2021, the SEC filed an enforcement action against GPL Ventures LLC, GPL Management LLC, Alexander J. Dillon, and Cosmin I. Panait.
- On February 20, 2020, the SEC filed an enforcement action against John Fierro and JDF Capital (SEC v. John D. Fierro and JDF Capital, Inc.).
- On March 24, 2020, the SEC filed an enforcement action against Justin Keener and JMJ Financial (SEC v. Justin W. Keener, d/b/a JMJ Financial).
- On September 3, 2020, the SEC filed an enforcement action against John M. Fife and five entities he owns and controls: Chicago Venture Partners, L.P., Iliad Research and Trading, L.P., St. George Investments LLC, Tonaquint, Inc., and Typenex Co-Investment, LLC (SEC v. John M. Fife, Chicago Venture Partners, Iliad Research and Trading, St. George Investments, Tonaquint, and Typenex Co-Investment).
Prior to the summary judgment against Keener, the SEC won a summary judgment against Ibrahim Almagarby and his company, Microcap Equity Group, LLC, on August 17, 2020.
The summary judgments against Almagarby and Keener set a precedence for all future actions against toxic lenders and serve as an important step towards also winning summary judgments in the cases against Fierro, Dillion and Panait, Rice, and any toxic lenders the SEC brings future against again.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 200 E. Palmetto Park Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, by email [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
200 E. Palmetto Park, Suite 103
Boca Raton, Florida 33432
Telephone 561-416-8956
www.securitieslawyer101.com
