SEC Settles with Three Defendants in Boiler Room Scheme
On June 11, 2020, the Securities and Exchange Commission (the “SEC”) announced that it has obtained final judgments by consent against Ronald Hardy, Anthony Vassallo, and Sergio Ramirez charged for their roles in a $10 million boiler room scheme. The SEC’s complaint, filed on July 12, 2017, alleged that Ronald Hardy and Anthony Vassallo, through boiler rooms they controlled, and together with Sergio Ramirez and other employees, engaged in a fraudulent scheme using threatening and deceitful sales tactics to pressure retail investors to purchase penny stocks. The defendants used information they learned about the victims’ purchase orders to facilitate the placement of opposing sell orders to dump shares owned by participants in the fraudulent scheme.
In a parallel criminal action, Hardy, Vassallo, and Ramirez pleaded guilty. Hardy was sentenced to 120 months in prison followed by three years’ supervised release. Vassallo and Ramirez are awaiting sentencing.
The final judgments enjoin Hardy, Vassallo, and Ramirez from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the broker-dealer registration provision of Section 15(a) of the Exchange Act, and enjoin Vassallo from violating the market manipulation provisions of Section 9(a) of the Exchange Act. The final judgments order Hardy, Vassallo, and Ramirez to disgorge $2,212,946, $2,446,137, and $251,615 respectively, plus prejudgment interest, which is deemed satisfied by the forfeiture and restitution ordered in the parallel criminal action. The judgments also impose penny stock bars. In settled administrative proceedings, Hardy, Vassallo, and Ramirez, were previously barred from the securities industry.
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 and compliance 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. For more information about going public with Form S-1, Form F-1 and Regulation A Securities Offerings, Rule 506 and Regulation CF crowdfunding, sponsoring market makers and Form 211, dual listings and foreign issuer listings and public company SEC reporting requirements, please contact Hamilton & Associates Law Group.
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