SEC Charges Convertible Note Dealer Tri-Bridge Ventures, LLC and John Francis Forsythe, III for Failure to Register

On April 29, 2024, the Securities and Exchange Commission (the “SEC“) charged John Francis Forsythe, III (“Forsythe”), a resident of New Jersey, and Tri-Bridge Ventures, LLC (“Tri-Bridge”), an entity he owns and controls, with failing to register with the SEC as securities dealers. As part of their business, Forsythe and Tri-Bridge allegedly engaged in convertible note financing and sold billions of shares of penny stock converted from such notes, generating millions of dollars in gross sales.

The SEC’s complaint, filed in the U.S. District Court for the District of New Jersey, alleges that, from at least February 2017 through at least November 2022, Forsythe and Tri-Bridge engaged in the business of entering into convertible notes with penny stock issuers or purchasing convertible notes or shares already converted from such notes from unaffiliated third parties, converting the notes into shares of stock at large discounts from market prices, and selling those newly issued shares into the public market at a significant profit. Forsythe and Tri-Bridge allegedly obtained convertible notes or shares already converted from such notes with respect to at least 31 separate issuers.

From approximately May 2019 to November 2022, with respect to at least 25 of those issuers, Forsythe and Tri-Bridge sold at least 10 billion shares of penny stock into the market, generating more than $18 million in gross sales (See Exhibit of Tri-Bridge Convertible Note Business). During their misconduct, Forsythe and Tri-Bridge were not registered with the Commission, and Forsythe was not associated with a registered broker-dealer.

By failing to comply with the dealer registration requirements of the Federal securities laws, Forsythe and Tri-Bridge avoided certain regulatory obligations for dealers that govern their conduct in the marketplace. These include submitting to regulatory inspections and oversight, following financial responsibility rules targeted at brokers and dealers, and maintaining books and records in accordance with applicable regulatory requirements.

The SEC’s complaint charges Forsythe and Tri-Bridge with violating the registration provision of Section 15(a)(1) of the Securities Exchange Act of 1934. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest on a joint and several basis, civil penalties, penny stock bars, and the surrendering for cancellation of any shares, conversion rights, or unexercised warrants that Tri-Bridge obtained through conversion of notes or execution of warrants.

The Alexander J. Dillon / Cosmin I. Panait Connection

The litigation against Forsythe and Tri-Bridge was not a big surprise to us. We detailed an intimate connection between Forsythe and Alexander J. Dillon and Cosmin I. Panait (the managers of GPL Ventures LLC and Blackbridge Capital LLC, who were charged by the SEC on August 17, 2021 for operating as unregistered dealers by privately acquiring large blocks of stock in approximately 140 microcap issuers and publicly selling those blocks into the market for their own account, generating gross proceeds of at least $81 million.

While researching GPL Ventures, prior to the SEC litigation, we found that Tri-Bridge was a significant player that showed up repeatedly in the issuers named in the SEC litigation against the GPL/Seaside defendants – (HempAmericana Inc (HMPQ), GD Entertainment & Technology Inc (GDET), Image Protect Inc (IMTL), American Energy Partners Inc (AEPT) and GenTech Holdings Inc (GTEH).

From that blog post:

Tri-Bridge Ventures provided funding in all five of the GPL Ventures/Seaside issuers (HMPQ, GDET, IMTL, GTEH, and AEPT) and was in dozens of the same issues at the same time as GPL Ventures and/or Blackbridge Capital.

There is an undeniable connection between the GPL Defendants and Tri-Bridge Ventures, which was confirmed by Forsythe III in a deposition from October 30, 2018, from a separate civil lawsuit filed by a BlackBridge investor named Maneesh Awasthi in the Supreme Court of the State of New York Southern District.

According to Forsythe’s deposition, Tri-Bridge was formed in April 2016 at the same time as Blackbridge Growth Fund after Forsythe and Dillon discussed the idea of having a 50/50 profit-sharing venture (50% of Tri-Bridge’s profits go to the Blackbridge Fund). Forsythe was willing to take such a deal because he claimed that he was struggling financially at the time after a failed solar energy venture. In exchange for his willingness to share half of his profits with Blackbrige, Tri-Bridge got free office space and access to the Blackbridge service providers, including Soham Awon, who was the office administrator at the time.

On May 2, 2023, the SEC obtained final judgments against Alexander J. Dillon, Cosmin I. Panait, and their corporate entities GPL Ventures LLC and GPL Management LLC.  To settle the case, the defendants consented to pay $29,681,569 in disgorgement, $2,489,799 in prejudgment interest and $7,000,000 in civil penalties. The defendants also agreed to surrender for cancelation all remaining unconverted convertible notes still held, with a face value of approximately $11 million, and consented to a five-year penny stock bar.  A full list of issuers with unconverted notes that were canceled can be found here.

The Connection to Jossef Kahlon

Our research found that Forsythe was also connected to another former toxic lender who was charged by the SEC: Jossef Kahlon of TJ Management Group LLC.

In 2012, the SEC charged Kahlon for selling $7,758,178 worth of unregistered stock between 2008 – 2010 in 11 different Issuers.  The SEC alleged that Kahlon sold more than 18.6 billion shares in those 11 issuers. 

According to Kahlon’s deposition (found here and here) in the SEC lawsuit, he was brought into the business by John Forsythe, who he was using as a broker for regular trading while running a used car business.

A final judgment was entered against Kahlon by the SEC on September 16, 2016 (just a few months after Forsythe started Tri-Bridge). Kahlon was ordered to disgorge $7.758,178 in ill-gotten gains along with prejudgment interest of $1,522,895 and a $200,000 civil penalty.  Kahlon was also permanently barred from participating in any penny stock offerings, including engaging as a broker, dealer, or issuer for the purposes of issuing, trading inducing, or attempting to induce the purchase or sale of any penny stock.

The Tri-Bridge Issuers

The SEC didn’t name the 31 issuers tied to the alleged unregistered dealer activities of Forsythe and Tri-Bridge, but we identified several issuers that sold convertible notes and/or shares to Tri-Bridge in our past research, including StrikeForce Inc (SFOR), Branded Legacy Inc (BLEG), Brewbilt Manufacturing Inc (BBRW), GD Entertainment & Technology Inc (GDET), Hemp Naturals Inc (HPMM), Bantec Inc (BANT), Enviro-Serve Inc (EVSV), Digital Development Partners Inc (DGDM), No Border Inc (NBDR), Grow Solutions Holdings Inc (GRSO), Livewire Energy Inc (LVVV), Saddle Ranch Media Inc (SRMX), Image Project Inc (IMTL), 2050 Motors Inc (ETFM), The Movie Studio Inc (MVES), Holiday Island Holding (HIHI), Square Chain Corp (SQCC), Sky440 Inc (SKYF), Crednology Holding Corp (fka COHO), Maptelligent Inc (MAPT), Alternative Energy Partners Inc (AEPT), Global Technologies Ltd (GTLL), Smart Decision Inc (SDEC), BitFrontier Capital Holdings (BFCH), Simlatus Corp (SIML), Bayport International Holdings Inc (BAYP), Signature Devices Inc (SDVI), Next Dynamics Inc (NEXD), Michael James Enterprises Inc (MJTV), Worldflix Inc (WRFX), HempAmericana Inc (HMPQ), and Tiger Reef Inc (TGRR).

The action is just the latest of a string of actions by the SEC against Toxic Financiers acting as unregistered dealers since 2017, and so far the SEC is undefeated in those cases:

• 4/29/2024 – SEC v. Tri-Bridge Ventures, LLC and John Francis Forsythe, III, No. 3:24-cv-05711 (Complaint)
• 1/23/2024 – SEC v. Aryeh Goldstein, Adar Bays, LLC, and Adar Alef, LLC (Complaint) 
• 9/28/2023 – SEC v. Adam Long, L2 Capital, LLC., and Oasis Capital, LLC (Complaint) 
• 6/16/2023 – SEC v. BHP Capital NY, Inc. and Bryan Pantofel (Complaint) 
• 6/01/2023 – SEC v. Auctus Fund Management, LLC, Louis Posner and Alfred Sollami, and Auctus Fund LLC (Complaint) 
• 9/22/2022 – SEC v. Morningview Financial, LLC and Miles M Riccio (Complaint) 
• 8/02/2022 – SEC v. Crownbridge Partners, LLC, Soheil Adhoot, and Sepas Ahdoot (Complaint) 
• 6/07/2022 – SEC v. LG Funding, LLC and Joseph Lerman (Complaint) 
• 9/24/2021 – SEC v. Carebourn Capital, L.P. and Chip Alvin Rice (Complaint) 
• 8/13/2021 – SEC v. GPL Ventures, Alexander J. Dillon, Cosmin I. Panait, GPL Management LLC, et. al., (Complaint) 
• 9/03/2020 – SEC v. John M. Fife, Chicago Venture Partners, L.P., Iliad Research and Trading, L.P., St. George Investments LLC, Tonaquint, Inc., and Typenex Co-Investment, LLC (Complaint) 
• 3/24/2020 – SEC v. Justin W. Keener D/B/A JMJ Financial (Complaint) 
• 2/26/2020 – SEC v. John D Fierro and JDF Capital, Inc. (Complaint) 
• 3/22/2019 – SEC v. River North Equity LLC and Edwrd M Liceaga, et. al. (Complaint) 
• 11/17/2017 – SEC v. Ibrahim Almagarby and Microcap Equity Group LLC (Complaint) 

To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Park Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected]. 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 Attorneys
Brenda Hamilton, Securities Attorney
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