SEC Charges Jonathan Farber, Aarif Jamani, and Brian Keasberry with Securities Fraud

On January 12, 2023, the Securities and Exchange Commission (the “SEC“) filed charges against Jonathan Farber, Aarif Jamani, and Brian Keasberry for securities fraud.

According to the complaint filed by the SEC in the United States District Court Southern District of New York, the defendants engaged in a fraudulent scheme to profit from their accumulating, manipulating, and selling of County Line Energy Inc (CYLC) stock to retail investors.  The defendants shared the $5 million in profits from the stock sales that resulted in their scheme.

The SEC alleges that the defendants first gained control of County Line by placing close associates or handpicked figureheads in senior management positions at County Line.  Then, Jamani and Farber guided and directed these managers to take actions beneficial to the defendants. Jamani and Farber used their influence over County Line to control how much of its stock was available in the public markets and to allow the defendants to accumulate and control most of County Line’s stock.

Next, Jamani and Barber created the false appearance of investor interest in County Line stock to attract retail investors to the stock.  Public trading activity in County Line was virtually nonexistent when the defendants began their scheme.  So, the defendants created the appearance of active trading by selling stock to friendly buyers whom Farber controlled.  Farber used the accounts of three individuals to purchase County LIne stock.

• Individual #1 was Farber’s former girlfriend, longtime friend, and roommate.
• Individual #2 was Farber’s current girlfriend.
• Individual #3 was a longtime associate of Farber.

At the same time, Jamani was selling on behalf of the defendants through an offshore brokerage firm using a nominee account. The Defendants were effectively selling to themselves.

The defendants also paid for an online promotional campaign, touting the stock’s great potential and pointing to press releases that Farber and Jamani caused County Line to release.

• Between July 2018 and January 2019, the defendants paid for at least 49 emails to be sent to thousands of potential investors through listservs run by paid stock promoters and sold nearly 5 million shares of County Line stock, making over $3 million in profits.
• From September 2019 to November 2019, the defendants paid for at least another 32 promotional emails and sold over 2.6 million shares of County Line stock for profits of over $700,000.
• From February 2020 to May 2020, the defendants funded at least 62 additional County Line promotional emails and sold nearly 4 million shares for a profit of over $400,000.

Payments for the stock promotions came primarily from Wexford Industries Ltd. (Farber), 0985358 BC Ltd. (Jamani), Blue Diamond Equities Inc (Keasberry), and Black Ridge Holdings Inc (Keasberry).

The following is a timeline of events according to the details in the complaint:

• On January 4, 2018, CEO1 (a long-time associate of Jamani) effected a 1:1000 reverse stock split, reducing the number of shares so that the defendants could more easily guarantee they controlled the majority of the public float. OTC Markets disclosures show the CEO of County Line as Lowell Holden at this time.
• On March 15, 2018, Farber caused Wexford Industries Ltd, a Wyoming company controlled by Farber, to transfer $10,020 to an individual who would become CEO2.
• Days later (March 2018), County Line issued 100,000,000 million shares to CEO2 for $10,000.  After the issuance, CEO2 owned 98% of the outstanding shares (100,000,000 out of 102,000,000 shares).
• On March 26, 2018, CEO2 was appointed officer and director of County Line. According to OTC Markets filings, Daniel Serruya became the CEO at this time.  Serruya was also President, Secretary, and Treasurer of BRK Inc (BRKK), which now trades as Gen 2 Technologies Inc (MNIZ).  At this same time, Keasberry was a director for BRKK, and later, Jamani became the president, secretary, and treasurer of BRKK.  
• On July 5, 2018, Serruya resigned and was replaced by another Farber associate, Eric Dena (CEO3). Farber promised to fund Dena’s business if he became the CEO and merged his business, a grow box company, into County Line.
• On July 5, 2018, Dena acquired 70 million of Serruya’s 100 million shares and Vince Andreula acquired 28.5 million of Serruya’s 100 million shares for a total purchase price of $9,850 ($.0001/share).  Coinciding with the change of control, Dena’s business, Grow Box EcoSystems, was merged into the issuer.
• During Dena’s tenure, Farber and Jamani frequently communicated instructions to Dena through an unnamed associate, including when to issue press releases and what information the press releases should contain. 
• In or around June 2019, OTC Markets Filings showed that Emanuel Margaretis (who joined County Line with CEO3) replaced Dena as the CEO of County Line.  As before, Jamani continued to instruct the CEO4 (Margaretis) on the timing and content of press releases. 

According to the complaint, the defendants began trying to amass County Line shares and fraudulently sell them starting in early 2018.   For example, less than a week after County Line issued CEO2 (Serruya) 100 million newly created restricted shares, the company issued Jamani’s entity, 0985358 BC Ltd., 1.35 million shares as part of a purported debt conversion. Had Serruya not been issued 100 million new shares, those 1.35 million shares would have far exceeded the critical threshold of 10% of the total outstanding shares.  Without Serruya’s newly issued 100m shares, Jamani would have had 40% of the otherwise outstanding 3,459,138 shares.

And despite Serruya receiving 100m newly issued shares, allowing Jamani to fall below the 10% threshold, the defendants as a group had amassed over 96% of the float at this time. By controlling the float, the defendants could prevent third parties from taking advantage of the demand the defendants were paying to generate and undercutting their profits.

Jamani also sought to remove the legend on newly issued stock received by 0985358 BC Ltd for purported debt conversions on several other occasions during 2018 and 2019.  In each case, the opinion letter provided for the legend removal contained the following inaccurate language: “We are informed and assume for purposes of this opinion that [0985358] is not a current or former officer, director, 10% shareholder or other affiliate or insider of the Issuer.“

And in Shareholder Representation Letters signed by Jamani on behalf of 0985358 BC Ltd., Jamanie falsely stated, “I request that the restrictive legend be removed from my stock certificates… of County Line…, because I am not an affiliate… and have met all requirements of Rule 144. In connection with my request I hereby represent: … I am not now, and have not been during the preceding three months, an officer, director, or more than 10% shareholder of [County Line] or in any other way an ‘affiliate’ of [County Line] (as that term is defined in Rule Case 1:24-cv-00273 Document 1 Filed 01/12/24 Page 15 of 32 16 144(a)(1)), nor has… any corporation or organization of which I am the beneficial owner[.]“

Farber likewise caused false representations to be made to County Line’s transfer agent to get the legend removed on shares received by Farber’s entity, Wexford Industries, for purported debt conversions.

Between June 26, 2018 and May 19, 2020, the defendants’ entities paid promoters $1,324,641, generating enough demand for the defendants to sell nearly 13 million shares of County Line for total profits of over $4.7 million.

The SEC seeks permanent injunctive relief, disgorgement of ill-gotten gains with pre-judgment interest, and civil penalties against all of the defendants, as well as officer and director bars against Farber, Jamani, and Keasberry. 

To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto 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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