SEC Obtains $5.9 Million Judgment Against John Fierro in Unregistered Penny Stock Dealer Case

On May 21, 2024, Judge Georgette Castner of the United States District Court for the District of New Jersey entered a final judgment against John D. Fierro and JDF Capital, Inc. The SEC’s complaint alleged that the Defendants failed to register as securities dealers with the SEC or to associate with a registered dealer when they bought and sold billions of newly issued shares of penny stock from at least January 2015 through November 2017. 

The Defendants obtained the shares directly from issuers after converting debt securities known as convertible notes. By failing to register, Defendants 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 previously granted summary judgment to the Commission. On June 29, 2023, the court found that Fierro and JDF Capital engaged in a regular business of buying and selling securities for their own account and that their failure to register as dealers violated the dealer registration requirements of Section 15(a) of the Securities Exchange Act of 1934.

In its final judgment, the court ordered Fierro and JDF Capital to pay a joint-and-several disgorgement of $4,053,148, prejudgment interest of $1,326,440, and a civil penalty of $500,000, for a total judgment of $5,879,588. The court also entered a permanent injunction against the Defendants and ordered them to surrender certain stock and conversion rights under existing convertible securities for cancellation.

The list of issuers in which Fierro will have to surrender for cancellation certain stock and conversion rights includes the following:

Advanced Medical Isotope Inc.
Apptigo International, Inc.
Stragenics, Inc.
5Barz International Inc.
Black Stallion Oil & Gas Inc.
Blue Water Global Group, Inc.
Borneo Resource Investments Ltd.
Diego Pellicer Worldwide, Inc.
Healthlynked Corp.
Icon Vapor, Inc.
Lithium Exploration Group Inc.
Max Sound Corporation
The Maryjane Group, Inc.
ML Capital Group Inc.
Newlead Holdings Ltd.
Nanotech Entertainment, Inc.
Next Galaxy Corp.
Pocket Games, Inc.
Sanuwave Health, Inc.
Soupman, Inc.
Solaris Power Cells, Inc.
Sparta Commercial Services S
TW Resources Holding Corp.
Solar Wind Energy Tower, Inc.
North American Cannabis Holdings, Inc.
Nano Movile Healthcare, Inc.
Well Power, Inc.

We’ve previously written about several unregistered dealer cases brought by the SEC against toxic lenders, most recently John Francis Forsythe, III and his company, Tri-Bridge Ventures, LLC.

Since 2017, the SEC has brought 15 cases against toxic lenders for operating as unregistered dealers:

• 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 Edward M Liceaga, et. al. (Complaint) 
• 11/17/2017 – SEC v. Ibrahim Almagarby and Microcap Equity Group LLC (Complaint) 

The final judgment against Fierro follows other wins by the SEC against:

• Alexander J. Dillon, Cosmin I. Panait, and their corporate entities GPL Ventures LLC and GPL Management LLC on May 2, 2023 (read more here)
• BHP Capital NY, Inc. and Bryan Pantofel on July 29, 2023
• Justin W. Keener d/b/a JMJ Financial on December 20, 2022 (read more here)
• Ibrahim Almagarby and his company Microcap Equity Group LLC on September 29, 2021, which was later upheld by an appeals court (read more here)

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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Boca Raton, Florida 33432
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