Securities Attorney Matthew C McMurdo suspended by the SEC
On September 20, 2024, the Securities and Exchange Commission (the “SEC” or “Commission”) issued an Administrative Order against securities attorney Matthew C. McMurdo for violating Section 4C of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 102(e)(1)(ii) of the Commission’s Rules of Practice.
According to the Order, from 2016 – 2021, McMurdo, who has been licensed to practice law in the state of New York since 1998, was engaged as corporate counsel for Enviro Impact Resources, Inc., f/k/a Industry Source Consulting, Inc. (“INSO”), is a non-SEC reporting, microcap public company with multiple former names, including Vega Biofuels, Inc. (“Vega”). During that time, McMurdo signed and then issued 10 opinion letters (“Opinion Letters”) addressed to OTC Markets, in which he opined on various annual and quarterly disclosure reports issued by Vega and INSO. Vega and INSO used these Opinion Letters to be quoted on OTC Markets and to allow broker-dealers to quote the stock of Vega and INSO.
According to the Order, McMurdo knew or should have known that his Opinion Letters contained materially false and/or misleading representations, including but not limited to:
- misidentifying who prepared the financial statements of Vega and INSO, including false information provided by Vega and INSO that a certified public accountant prepared certain of these financial statements,
- stating that the individuals who actually prepared these financial statements were qualified to do so, and
- stating that neither INSO, nor any 5% or more holder of INSO’s securities, were under investigation by any federal or state regulatory authority for any violation of federal or state securities laws.
According to the Order, during his time as securities counsel for Vega and INSO, McMurdo observed inconsistencies and inaccuracies in various Vega and INSO disclosure reports that made him feel uncomfortable, and in 2017, McMurdo was verbally admonished by a clerk at OTC Markets about the diligence undertaken, as Vega’s submitted balance sheet at the time did not properly balance. Yet McMurdo continued to issue and sign opinion letters on behalf of Vega and INSO.
In or around October 2021, McMurdo terminated his representation of INSO but failed to notify OTC Markets that he was no longer providing legal services to INSO, as he was required to do pursuant to his signed OTC Markets’ Attorney Letter Agreement.
Based on these findings, the Commission determined that McMurdo failed to conduct himself in a manner expected of an attorney when he failed to independently verify information and when he failed to conduct further, adequate inquiries when confronted with red flags that should have alerted him to inconsistencies and inaccuracies regarding certain representations made in his Opinion Letters.
Based on the foregoing, the Commission ruled that McMurdo engaged in improper professional conduct pursuant to Section 4C(a)(2) of the Exchange Act and Rule 102(e)(1)(ii) of the Commission’s Rules of Practice in that he violated the professional standards of the New York Rules of Professional Conduct.
Accordingly, the Commission ordered, effective immediately, that McMurdo be denied the privilege of appearing or practicing before the Commission as an attorney. After one year from the date of the Order, McMurdo may request that the Commission consider his reinstatement, provided he meets a long list of requirements found in the Order.
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
200 E Palmetto Park Rd, Suite 103
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com
