Ford v. USP Terre Haute

 
 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES ACT OF 1933 
Release No. 11292 / June 25, 2024 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 100415 / June 25, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-21976 
 
 
In the Matter of 
 
META MATERIALS, INC. 
(f/k/a TORCHLIGHT 
ENERGY RESOURCES, 
INC.) 
 
Respondent. 
 
 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 8A OF THE SECURITIES ACT 
OF 1933 AND SECTION 21C OF THE 
SECURITIES EXCHANGE ACT OF 1934, 
MAKING FINDINGS, AND IMPOSING A 
CEASE-AND-DESIST ORDER 
   
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act 
of 1933 (“Securities Act”) and Section 21C of the Securities Exchange Act of 1934 (“Exchange 
Act”) against Meta Materials, Inc. (“Respondent”). 
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 
of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 
which the Commission is a party, and without admitting or denying the findings herein, except as 
to the Commission’s jurisdiction over him and the subject matter of these proceedings, which are 
admitted, Respondent consents to the entry of this Order Instituting Cease-and-Desist Proceedings 
Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange 
Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth 
below. 
 

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III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
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 that: 
 
Summary 
 
1. In June 2021, Respondent raised $137.5 million in an at-the-market offering (the 
“ATM Offering”). Leading up to the offering and in connection with a merger, Respondent engaged 
in a scheme to inflate the price of its stock and defraud investors through numerous material 
misstatements and omissions about the potential value of a stock dividend to be issued as part of 
the merger. As a result of its fraudulent conduct, Respondent sold 16.2 million shares during its 
ATM Offering for tens of millions of dollars more than it could have absent its efforts to inflate its 
stock price.  
 
2. Respondent artificially inflated the value of its common stock by structuring a 
merger between its predecessor entities (Torchlight Energy Resources and Metamaterial Inc.) to 
include an unregistered preferred stock dividend that would not be immediately publicly tradeable 
(the “Preferred Dividend”), specifically designed to cause a “short squeeze.” Respondent privately 
and selectively disseminated—through paid consultants, private conversations with investors, and 
via social-media messages—the theory that the Preferred Dividend would cause a short squeeze by 
forcing short-sellers in Respondent’s stock to cover their positions before Torchlight issued the 
Preferred Dividend or risk violating their short contracts by having difficulty delivering the 
Preferred Dividend when the merger closed. But Respondent never disclosed in its public filings its 
intent to cause a short squeeze, and it waited until the last minute to announce the ATM Offering to 
capitalize on what Respondent believed would be a short-term price inflation of its stock. 
 
3. In support of its scheme, Respondent made false and misleading statements about 
the Preferred Dividend, which entitled its holders to receive the net proceeds of the sale of 
Respondent’s oil and gas assets. In its public filings, Respondent misrepresented the status of its 
efforts to market and sell those assets while concealing a planned spin-off of the assets into a new 
entity. Further, in May 2021, Respondent’s incoming Chief Executive Officer baselessly claimed 
that the value of the Preferred Dividend could be between $1 and $20 per share when, in fact, a 
valuation study by Respondent’s investment bankers only supported a per-share value range of 
$0.03 to $0.83. 
 
4. Respondent’s scheme occurred against the backdrop of a lax internal control 
environment. Respondent failed to devise and maintain internal accounting controls and make and 
keep adequate books and records by failing to account properly for the disposition of corporate 
assets or the recognition of legitimate expenses related to a series of payments made to stock 
promoters who rendered services to the company without any documentation. In addition, 
Respondent paid consulting fees designed to conceal the recruitment and compensation of a team 
 
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  The findings herein are made pursuant to Respondent's Offer of Settlement and are not 
binding on any other person or entity in this or any other proceeding. 
 

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of individuals that were retained to spin-off Respondent’s oil and gas assets into a new entity at the 
same time that Respondent touted in its public statements its intention to make efforts to sell the oil 
and gas assets and distribute the net proceeds to Preferred Dividend holders. 
 
Respondent 
 
5. Meta Materials, Inc. (“Meta II” or “Respondent”) is a Nevada corporation 
headquartered in Dartmouth, Nova Scotia, Canada. Meta II was created on June 28, 2021 through a 
reverse merger between: (i) Torchlight Energy Resources, Inc. (“Torchlight”), a publicly traded 
Texas corporation headquartered in Plano, Texas that purported to be in the business of oil and gas 
exploration and production, then listed on the Nasdaq under the ticker symbol “TRCH”; and  (ii) 
Metamaterial, Inc. (“Meta I”), a Canadian headquartered company then listed on the Canadian 
Securities Exchange and focused on early-stage applied materials technology research and 
development. Today, Meta II’s common stock, which trades under the Nasdaq ticker symbol 
“MMAT,” is registered with the Commission pursuant to Section 12(b) of the Exchange Act. 
Concurrent with the merger, Torchlight issued the Preferred Dividend to Torchlight shareholders 
of record as of June 24, 2021, and Torchlight shares became Class A Preferred Shares of Meta II 
after the merger closed.  
 
Other Relevant Individuals 
 
6. John A. Brda, age 59, resides in St. Louis, Missouri. Brda served as Torchlight’s 
CEO from 2014 through its merger with Meta I on June 28, 2021. Post-merger, Brda held a 
consulting role with Meta II through late 2022.  
  
7. Georgios “George” Palikaras, age 42, is a Greek citizen who resides in Halifax, 
Nova Scotia, Canada. From 2011 to 2021, Palikaras was Meta I’s President & CEO. Upon Meta 
II’s creation, Palikaras became President & CEO of Meta II and served on its board of directors 
(“Board”). In October 2023, Meta II terminated Palikaras and he subsequently resigned from the 
Board.  
 
Background 
 
Torchlight’s Plan to Use a Preferred Dividend to Cause a Short Squeeze 
 
8. In early 2020, after selling off essentially all of its revenue-generating oil and gas 
properties, Torchlight faced an uncertain future: its stock traded below $1.00 per share, Nasdaq 
issued a delisting warning, and its auditors issued a going-concern warning. In response to 
Torchlight’s predicament, Brda, Torchlight’s CEO, implemented a plan:  
 
• Find a merger partner who desired Torchlight’s Nasdaq listing but not its remaining oil 
and gas assets; 

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• Issue a Preferred Dividend in the form of preferred stock that would not be listed or 
traded on any exchange as part of the merger structure, ostensibly to allocate proceeds 
from the sale of Torchlight’s remaining oil and gas assets to legacy Torchlight 
shareholders; 
• Market and promote the Preferred Dividend to emphasize to the market that short 
sellers would have difficulty obtaining the Preferred Dividend without owning 
Torchlight stock, thus pressuring short sellers to close their positions or obtain 
Torchlight stock before the record date for the Preferred Dividend (“Record Date”), 
temporarily inflating  the price of Torchlight’s common stock; 
• Leverage the resulting inflated common stock price to raise capital through an ATM 
Offering and remove debt through debt conversion; and 
• Use capital raised through the ATM Offering to drill wells required to maintain 
Torchlight’s remaining oil and gas leases. 
 
9. Brda explained his plan—including the use of the Preferred Dividend to pressure 
short sellers—to members of Torchlight’s Board of Directors, its investment banker, and several 
prospective merger partners, including Palikaras and the Meta I Board of Directors. From its 
earliest conception, in brainstorming the plan with Torchlight’s Chairman and its lead banker in 
June 2020, Brda explained that, “[b]y issuing a Pref to [Torchlight] shareholders of record at 
closing, and announcing it as part of the [merger agreement], the short position which is quite 
extensive will be forced to cover.” Also in June 2020, Brda explained to a potential merger partner 
that he expected Torchlight’s stock price to increase “temporarily because of the short squeeze” 
while acknowledging that the resulting price increase would be “unsustainable.” In initial merger 
discussions, Brda explained to Palikaras how the deal structure could create a short squeeze and the 
plan to “[p]lay up the [preferred share] dividend to make sure the shorts understand their 
dilemma.” 
 
Torchlight, Brda, and Palikaras Promoted the Short Squeeze Narrative 
 
Brda Caused Torchlight to Make Public Statements to “Play Up” the Preferred Dividend 
 
10. Torchlight never directly disclosed in any public filing the full scope of Brda’s plan 
to use the Preferred Dividend to create a short squeeze. In Torchlight’s 2020 Form 10-K filed 
March 18, 2021, Torchlight disclosed that “[t]he market price of our common stock may be 
influenced by many factors,” including among “many” other factors, “actual or purported ‘short-
squeeze’ trading activity.” However, Torchlight did not publicly disclose that the Preferred 
Dividend could cause a short squeeze, much less that the Preferred Dividend was designed to 
create a short squeeze or that the ATM Offering was conducted to “take advantage of the squeeze.” 
Instead, Torchlight’s 2020 Form 10-K stated that “we have no reason to believe our shares would 
be the target of a short squeeze,” which was directly contrary to the statements that Respondent 
and its executives made privately about the Preferred Dividend and the plan to create a short 
squeeze.  
 

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11. Instead, in reports filed with the Commission and in public statements, Brda and 
Torchlight focused attention on the Preferred Dividend and the supposed net profits from the sale 
of Torchlight’s oil and gas assets that Preferred Dividend holders could expect to receive, 
highlighting the Preferred Dividend in the announcement of the merger, the announcement of a 
final signed merger agreement, and the proxy filings concerning the merger. Torchlight also 
emphasized in its proxy filings that the Preferred Dividend would not be registered, would not be 
listed on any national exchange, and would not be “freely transferrable” unless an exemption 
applied. Brda believed that once short sellers understood it would be difficult acquire the Preferred 
Dividend in the market, they would be forced to cover their short positions in Torchlight because 
they would otherwise have difficulty obtaining the Preferred Dividend to comply with the terms of 
their short contracts, which would require them to deliver the proceeds or equivalent value of an 
in-kind dividend like Torchlight’s Preferred Dividend. The company planned to leverage this 
short-covering activity by issuing shares via an ATM Offering and removing debt through equity 
conversions. But neither Torchlight nor Brda explained the full plan in public; rather, they 
selectively disseminated portions of the plan through consultants, via hints dropped on social 
media, and to select investors. 
 
Torchlight and Brda Used Consultants to Spread Their Short Squeeze Theory to Investors 
 
12. Torchlight paid individual consultants to communicate with Torchlight’s current or 
potential shareholders. Through these consultants—two of whom Brda introduced to Palikaras as 
his “guys on stock support”—Brda communicated selective information about the merger to 
investors. For example, Brda emailed two of the consultants a slide presentation containing the 
plan to “[p]lay up the dividend to make sure the shorts understand their dilemma.”  
 
13. On the day that Torchlight and Meta I announced their letter of intent to merge, 
Brda forwarded the consultants a draft press release announcing the merger, complaining that the 
stock price had not moved enough, “I think people don't understand the dividend properly.” On 
September 21, 2020, Brda forwarded to two consultants the press release that Torchlight issued 
that day, announcing that it had entered into a letter of intent with Meta I to merge, and the 
following exchange occurred: 
 
Brda: We need your guys to embrace it. IMO, you get the [Torchlight] value up to $1 and 
then the 25% of META is free. Lots of room to build a nice position. 
 
Consultant: Agreed, Everyone I’ve spoke [sic] to today love it and are buying more and 
are long term investors! TONS of volume but not moving up? 
 
Brda: I think people don't understand the dividend properly. 
 
Consultant: I agree, I’m explaining it and I can hear the light come on while I’m talking to 
people. 
 
14. In January 2021, Brda emailed information about the outstanding short position in 
Torchlight to the stock-support consultants and wrote, “[w]e all knew [the shorts] would come 

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after us one more time. They are creating a massive bubble, IMO, that is going to slingshot in our 
favor. The dividend is going to be a huge problem for them.”  
 
15. Other than generic contracts obligating the consultants to “introduce” the company 
to potential investors, Torchlight kept no records documenting why Torchlight paid the stock-
support consultants $3,000 to $5,000 per month plus stock warrants for their services. 
 
Torchlight, Brda, and Palikaras Promoted the Short Squeeze Narrative in Communications 
with Select Investors and Select Prospective Investors  
 
 Virtual Investor Conference 
 
16. During Spring 2021, Brda and Palikaras conducted meetings with investors through 
conferences organized by Torchlight’s financial advisors. From March 16-18, 2021, Brda and 
Palikaras met with a series of institutional investors at a virtual investor conference. During these 
meetings, Brda and Palikaras pitched the justification for the merger to one investor group at a 
time, and Brda explained to at least one investment firm the potential for the Preferred Dividend to 
cause a short squeeze and Torchlight’s plan to conduct a substantial ATM Offering concurrent 
with the merger close. In contrast, Torchlight never disclosed in its public filings the Preferred 
Dividend’s potential impact on short sellers, and it waited to publicly disclose the ATM Offering 
until June 16, 2021. 
 
Italian Investor Call 
 
17. In May 2021, Torchlight’s investor relations firm set up several virtual meetings 
with a group of Italian shareholders that Torchlight believed held more than one million shares of 
its common stock. Brda attended one of the meetings, and Palikaras attended another. The stated 
purposes of the meetings were to solicit the Italian shareholders’ proxy votes in favor of the merger 
and to encourage the investors to hold the common stock of the post-merger company. During his 
May 13, 2021 meeting with Italian shareholders (the “Italian Investor Call”), Palikaras described 
the plan to use the Preferred Dividend to create a short squeeze on several occasions, for example: 
 
And there is one more element to add here, which is the, let’s call the x-factor. If 
you notice the Torchlight stock is massively shorted ... This deal is set up not to 
give a [cash] dividend at closing... As a result, there is no physical way for the 
shorts to cover the stock when the time to close, and we believe ... the close, it’s 
called a short squeeze... (emphasis added). 
 
18. On June 7, 2021, a user posted on social media a screenshot purporting to show that 
the user recorded the Italian Investor Call. The user claimed they participated in the call and 
summarized their takeaways, including that the Preferred Dividend would “create a short squeeze 
as there are many short stocks to cover before the merger!!” Three days later, a Reddit user posted 
a partial audio recording of Palikaras’s comments during the Italian Investor Call, including the 
plan to create a short squeeze. 
 

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Torchlight, Brda, and Palikaras Promoted the Short Squeeze Narrative, Including on 
Social Media 
 
19. Palikaras and Brda also used Twitter to tout the Preferred Dividend and short 
squeeze theory. For instance, on June 7, 2021, one week before Torchlight announced the Record 
Date, Brda posted on Torchlight’s Twitter account a video discussing short squeezes in the context 
of other stocks. After viewing the tweet, Palikaras texted Brda, advising caution: “I don’t think you 
should be sharing posts on the short squeeze...yet. Just my two cents. Once it happens that’s ok as 
it is fact, but [if you do it] before you are putting yourself at risk for potentially speculative 
content.” (emphasis added). 
 
20. Six days later, the day before Torchlight announced the Record Date, Palikaras 
tweeted a graphic of shorts-in-flames, kicking off a series of tweets and public statements designed 
to promote the short squeeze theory and encourage investors to purchase Torchlight’s common 
stock:  
 
 
21. Palikaras’s tweet received several public replies connecting the tweet to the short 
squeeze theory. For example, one user responded, “You should set the price of the shorts the price 
of TRCH at the end of the short squeeze.” Another wrote, “We definitely get the reference ‘Shorts 
Are Getting Burne[d].’” 
 
22. The next day, on June 14, 2021, Torchlight issued a press release announcing the 
Record Date (June 24, 2021), kicking off the sequence of events that culminated in the ATM 
Offering. 
 

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Torchlight, Brda, and Palikaras Misrepresented the Value of the Preferred Dividend 
 
23. To support their efforts to manipulate the market for Torchlight’s common stock 
and encourage investors to buy or hold Torchlight’s common stock, Torchlight and Brda 
misrepresented the likelihood of a distribution of the “net proceeds” from the sale of Torchlight’s 
oil and gas assets. They encouraged investors to buy or hold Torchlight’s common stock by: (1) 
Torchlight and Brda giving the false impression in public filings and statements that Torchlight 
would undertake commercially reasonable efforts to sell the oil and gas assets; (2) Torchlight and 
Brda referencing the net proceeds that would be distributed to Preferred Dividend holders 
following the sale; and (3) Palikaras providing a wholly unsupported per-share value estimate 
(between $1 and $20) of net proceeds payable to Preferred Dividend shareholders that became a 
widely circulated talking point on social media. 
 
Torchlight and Brda Misrepresented Ongoing “Commercially Reasonable Efforts” to Sell 
Torchlight’s Oil and Gas Assets and Distribute “Net Proceeds” in Proxy Filings and 
Forms 8-K 
 
24. In public filings leading up to the merger, particularly in its preliminary and final 
proxy materials soliciting shareholder approval, Torchlight bolstered the potential value of the 
Preferred Dividend by misrepresenting that it would make “commercially reasonable efforts” to 
sell its oil and gas assets and distribute the net proceeds to Class A Preferred Shareholders within 
six months of the merger closing. In total, Torchlight repeated the claim that it would make 
“commercially reasonable efforts” to sell the oil and gas assets seven or eight times in each version 
of the proxy filings. And, references to the net proceeds to be distributed to preferred shareholders 
repeatedly appeared in press releases throughout the period that the merger was pending, including 
press releases dated April 15, 2021, May 3, 2021, and June 14, 2021 subsequently attached to 
current reports filed with the Commission. 
 
25. In reality, Torchlight had no prospects to sell the oil and gas assets. Torchlight 
made no effort to lay the groundwork for a sale when it made the aforementioned statements. The 
company’s records contain no evidence of any communications with specific prospects from any 
time in 2020 or 2021. Due to the size and unproven state of Torchlight’s oil and gas assets, only a 
small number of very large oil companies would be viable candidates to purchase Torchlight’s 
assets. Even Brda acknowledged that only “very specialized buyers” would be interested in 
Torchlight’s assets and that it would take from up to a year to a year and a half to complete the sale 
considering the due diligence a specialized buyer would need to undertake. Torchlight’s long-time 
investment banker, who was not retained to sell the oil and gas assets, believed that it could take 
two to three years to complete such a sale.  
 
26. To the contrary, as early as December 2020, Brda had already begun planning a 
spin-off of the oil and gas assets into a new entity. Just days after Torchlight and Meta I signed the 
definitive agreement for the merger, Brda circulated to Torchlight’s Chairman and other insiders 
presentations outlining capital formation plans for a spin-off entity, “Next Bridge Hydrocarbons, 
Inc.” Then, in January 2021, Brda and Torchlight began paying $20,000 a month (through an 

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intermediary who received “consulting fees” for doing no actual work) to individuals who would 
form the initial management team of Next Bridge Hydrocarbons.  
 
27.  By August 17, 2021, less than 60 days after the merger closed, Meta II’s board 
voted to drill wells required to maintain the leases, with a goal of spinning off the assets into a 
separate company as soon as possible. Then, in December 2022, Meta II spun out the oil and gas 
assets into a new company—Next Bridge Hydrocarbons—the same entity name that Brda 
identified when he first began to plan for a spin-off transaction in December 2020.  
 
Palikaras’s False Claim About the Value of the Preferred Share Dividend 
 
28. On the May 13, 2021 Italian Investor Call, where Palikaras described the short 
squeeze to a select group of investors, he also made false and misleading statements about 
Torchlight’s efforts to sell its oil and gas assets, and the potential values of a cash distribution of 
the net proceeds from that sale.  
 
29. During the call, Palikaras claimed that Torchlight was speaking to “the right 
potential buyers” and that those buyers were “top tier,” when, in fact, Torchlight had not identified 
any potential buyers and Palikaras admitted that he had no knowledge of potential buyers or active 
negotiations.  
 
30. Palikaras also mentioned on the Italian Investor Call that, “according to the 
analysis,” the value of the Preferred Dividend could be between $1-$20 per share. The $1-$20 
range was wholly unsupported by a valuation study performed by Torchlight’s investment bankers 
that Palikaras reviewed, which estimated the asset value from $0.034 to $0.83 per share. 
Palikaras’s reference to an “analysis” gave investors the misleading impression that his value range 
was supportable when it was not. 
 
31. These statements by Palikaras quickly became a topic of discussion on social 
media, continuing to drive mentions throughout the ATM offering period. A common refrain on 
social media was that the company’s CEO (Palikaras) estimated that the Preferred Dividend would 
be worth $20 per share. 
 
32. After the merger, Meta II’s VP of Business Development emailed Palikaras and 
other Meta II leadership about an investor complaint citing the $1-$20 dividend range. In the 
email, the VP stated plainly, “[t]he dividend was never going to be worth more than $1... The 
math was not difficult prior to the merger: value of O&G assets / number of pre-existing TRCH 
shares.”  
 
Torchlight, Brda, and Palikaras Misled Investors about the Preferred Dividend. 
 
33. The false and misleading statements by Torchlight, Brda, and Palikaras made 
investors believe that Meta II could quickly monetize the oil and gas assets and distribute the net 
proceeds to Preferred-Dividend holders post-merger. This belief incentivized Torchlight 
shareholders to acquire or hold the common stock through the Record Date so they would be 

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eligible to receive the Preferred Dividend. On July 21, 2021, just weeks after the merger closed, 
Meta II’s CFO emailed Palikaras about the importance of demonstrating to the marketplace that 
Meta II took steps to diligently pursue a purchaser for the oil and gas assets before proceeding to a 
spin-off given the “preferred holders who are expecting to see cash for their shares.” 
 
34. As it became clear that Meta II would not immediately pay Preferred Dividend 
holders any net proceeds and that no Torchlight asset sale (or net proceeds therefrom) were 
forthcoming, investors began to complain. One investor emailed Palikaras directly on August 15, 
2021, suggesting that Meta II issue stock to Preferred Dividend holders “somewhere near the 
middle of the proposed $1 - $20 dividend range” to “help take the sting away.”  
 
Torchlight’s Market Manipulation Scheme Caught Fire 
 
35. Brda and Palikaras privately celebrated as Torchlight’s stock became a hot topic of 
conversation on social media in the days before the merger. Users on platforms from Twitter to 
Stocktwits to YouTube to Reddit discussed the merger, the Preferred Dividend, and the short 
squeeze. On June 14, 2021, Brda sent Palikaras an image of an online campaign promoting the 
short squeeze theory using the hashtag “#TORCHDAY,” which succinctly summed up the plan: 
“Post and educate people about our short squeeze ... #TORCHDAY” and “Post and educate 
people about our dividend ranging from $1 - $20 (deadline 06/22).” The graphic went on to 
explain, “[Torchlight] is a heavily shorted stock, and due to the fact a preferred share dividend is 
being granted to stockholders SHORTS HAVE TO COVER which can lead to a short squeeze of 
the stock.” The Torch Day graphic also explicitly referenced Palikaras’s “shorts-in-flames” tweet 
from the day before.  
 
36. Social media users posted the hashtag and versions of the graphic dozens of times 
in the days surrounding the Record Date announcement. And users on many other social-media 
platforms picked up on the basic gist of the scheme to promote purchasing Torchlight common 
stock by June 22, 2021 to benefit from the supposed short squeeze and the Preferred Dividend 
worth $1-$20 per share, using other hashtags, subreddits, and iterations on the short squeeze 
theory. 
 
37. Palikaras celebrated the “#TORCHDAY” campaign’s impact on the price of 
Torchlight’s stock and what it portended for the plan to use the ATM Offering to capitalize on the 
attention, texting Brda: “To the moon! We are happy to take $100-200m at a 20% PREMIUM TO 
THE MARKET and a minimum of $7 whatever is largest.” (emphasis in original). Brda agreed: “I 
think we can get there, just need to have diamond hands.”  
 
38. The trading volume in Torchlight’s common stock dramatically escalated as the 
merger approached. In May 2021, the average trading volume was five million shares per day. But, 
between the announcement of the Record Date on June 14 and the deadline to purchase Torchlight 
stock in order to obtain the Preferred Dividend on June 22, the average trading volume exceeded 
80 million shares per day.  
 
39. On June 14, 2021, the day after Palikaras made his “shorts-in-flames” tweet, 
Torchlight issued a press release, announcing the Record Date of June 24, 2021. Palikaras issued a 

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tweet, linking the press release and promoting the June 24th record date: “[n]ice release by 
$TRCH, the dividend [record] date is 06/24 (ten day notice required), there is a T plus 2 rule so last 
chance to be in @TRCHEnergy is Tuesday 06/22 end of day.” Investors following Torchlight 
understood Palikaras’s tweet to mean that the supposed key to ensuring the short squeeze and 
obtaining the Preferred Dividend that Palikaras touted would be worth $1—$20 per share was to 
buy or hold Torchlight stock by or through June 22, 2021. Torchlight’s stock price immediately 
reacted, jumping from $3.58 to $5.07. It would reach $10.88 in the days leading up to the June 25 
merger close. 
 
Torchlight Profited from Its Manipulation of Torchlight’s Stock Price Using the ATM 
Offering 
 
40. Torchlight’s Board, Meta I’s Board, Brda, and Palikaras discussed their intention to 
raise funds at artificially inflated prices in a series of exchanges that occurred on the eve of the 
ATM Offering. As Torchlight’s stock price rose after the announcement of the Record Date, Brda 
demanded a quid pro quo from Meta I: Torchlight (and Brda) would not go forward with the long-
planned ATM Offering unless a portion of the funds raised by the ATM Offering would  go toward 
drilling oil wells to maintain Torchlight’s oil and gas leases.  
 
41. In a memo to the Meta I team, Brda explained that Torchlight’s Board would not 
agree to conduct the ATM Offering without assurances that they would receive the quid pro quo 
that they requested:  
 
We have the ATM that will be in play by Thursday morning... up to $100 Million...  
Raising money prior to the dividend record date, IMO, is the best way to get maximum 
money and at the best price... I believe I can get my board to approve if META would 
agree to lend a decent portion of the raise to [Torchlight]... Say 20% of the amount 
raised... Otherwise, we have no inclination to raise capital now as it only dilutes our oil 
and gas assets further.... The ducks are quacking, time to feed them!” (emphasis added).  
 
42. Palikaras and Meta I’s CFO recommended to Meta I’s Board that they approve 
conducting the ATM Offering, stating “all [Meta’s advisers] strongly recommended we take as 
much of the money as we can ahead of the closing.” (emphasis added). And although the ATM 
Offering would be “[d]ilutive to Torchlight [common and preferred] shareholders, before Ex-
Dividend date however it also takes advantage of the potential best pricing due to any short 
covering effect prior to the Ex-Date.” (emphasis added).  
 
43. Although Meta I did not formally agree to Brda’s demands, Meta II ultimately did 
enter into an agreement with Brda post-merger regarding an amount to fund drilling for the oil and 
gas assets—consistent with Brda’s original plan and part of his scheme.  
 
44. The day after Torchlight’s stock price increased dramatically in response to the 
news of the Record Date announcement, Torchlight executed a sales agreement with an investment 
bank to conduct the ATM Offering. As a result of the ATM Offering, Torchlight sold 16.2 million 
shares of common stock between June 18 and June 24, at an average price of $8.50 per share, 

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raising $137.5 million. Over 95% of that volume was sold prior to the “T plus 2” date of June 22, 
2021. 
 
45. Torchlight’s stock reached its highest price around the “T plus 2 date” of June 22, 
2021 just as Torchlight, Brda, and Palikaras predicted. But after closing at $9.92/share on June 
21st, and $7.00/share on June 22nd, the stock price fell dramatically. On June 25, 2021, the 
Preferred Dividend payment date, the stock closed at $4.95/share. The following Monday (June 
28th), after Torchlight announced a 2-for-1 reverse stock split and the completion of its merger 
with Meta I, the company’s new ticker (MMAT) closed at $3.98/share (after accounting for the 
reverse split, less than half its prior day close). 
 
46. The communications by Brda and Palikaras during the ATM Offering reflected 
their intent to take advantage of the manipulated stock price. On Friday, June 18, after Torchlight 
sold two million shares on the first day of active selling on the ATM Offering, Brda texted 
Palikaras, “[w]e have two days to take advantage of the squeeze, today should have been a 5 
million share day at 6 [dollars per share]...” (emphasis added). Palikaras responded, “[f]ill her 
up[.]” Another member of Torchlight’s Board wrote to Brda, asking his input about transacting in 
the stock, “I won’t move if I have information that isn’t public, but if this short squeeze goes high 
enough I don’t want to miss it if I can participate legally.” (emphasis added). 
 
Violations 
 
47. As a result of the conduct described above, Respondent violated Section 10(b) of 
the Exchange Act and Rules 10b-5(a) and (c) thereunder, which prohibit fraudulent conduct in 
connection with the purchase or sale of securities; Section 17(a)(1) of the Securities Act, which 
prohibits the use of “any device, scheme, or artifice to defraud” in connection with the purchase or 
sale of securities; and Section 17(a)(3) of the Securities Act, which makes it unlawful for “any 
person in the offer or sale of any securities . . . directly or indirectly . . . to engage in any 
transaction, practice, or course of business which operates or would operate as a fraud or deceit 
upon the purchaser.”  
 
48. As a result of the conduct described above in Paragraphs 24 through 26, 
Respondent violated Section 17(a)(2) of the Securities Act, which makes it unlawful for “any 
person in the offer or sale of securities ... directly or indirectly... to obtain money or property by 
means of any untrue statement of material fact or any omission to state a material fact necessary in 
order to make statements made, in light of the circumstances under which they were made, not 
misleading.”    
 
49. As a result of the conduct described above, Respondent violated Section 14(a) of 
the Exchange Act and Rule 14a-9 thereunder, which prohibit the use of a proxy statement which, at 
the time and in the light of the circumstances under which it is made, is false or misleading with 
respect to any material fact, or which omits to state any material fact necessary in order to make the 
statements therein not false or misleading or necessary to correct any statement in any earlier 
communications with respect to the solicitation of a proxy for the same meeting or subject matter 
which has become false or misleading. 

 13 
 
50. As a result of the conduct described above, Respondent violated Section 13(a) of 
the Exchange Act and Rules 12b-20, and 13a-11 thereunder, which require every issuer of a 
security registered pursuant to Section 12 of the Exchange Act to file with the Commission 
information, documents, and current reports as the Commission may require, and mandate that the 
reports contain such further material information as may be necessary to make the required 
statements not misleading. 
 
51. As a result of the conduct described above, Respondent violated Section 
13(b)(2)(A) of the Exchange Act, which requires issuers with a class of securities registered 
pursuant to Section 12 of the Exchange Act and issuers with reporting obligations pursuant to 
Section 15(d) of the Exchange Act to make and keep books, records, and accounts which, in 
reasonable detail, accurately and fairly reflect their transactions and dispositions of their assets. 
 
52. As a result of the conduct described above, Respondent violated Section 
13(b)(2)(B) of the Exchange Act, which requires issuers with a class of securities registered 
pursuant to Section 12 of the Exchange Act and issuers with reporting obligations pursuant to 
Section 15(d) of the Exchange Act to devise and maintain a system of internal accounting controls 
sufficient to provide reasonable assurances that (i) transactions are executed in accordance with 
management’s general or specific authorization; (ii) transactions are recorded as necessary (I) to 
permit preparation of financial statements in conformity with generally accepted accounting 
principles or any other criteria applicable to such statements, and (II) to maintain accountability for 
assets; (iii) access to assets is permitted only in accordance with management’s general or specific 
authorization; and (iv) the recorded accountability for assets is compared with the existing assets at 
reasonable intervals and appropriate action is taken with respect to any differences.  
 
IV. 
 In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanctions agreed to in Respondent’s Offer. 
 
 Accordingly, it is hereby ORDERED that: 
 
 A. Pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, 
Respondent cease and desist from committing or causing any violations and any future violations of 
Section 17(a) of the Securities Act and Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), and 14(a) of 
the Exchange Act and Rules 10b-5(a), 10b-5(c), 12b-20, 13a-11, and 14a-9 thereunder.  
 
 B. Respondent shall pay a civil penalty of $1,000,000 to the Securities and Exchange 
Commission. The Commission may distribute civil money penalties collected in this proceeding if, 
in its discretion, the Commission orders the establishment of a Fair Fund pursuant to 15 U.S.C. § 
7246, Section 308(a) of the Sarbanes-Oxley Act of 2002. The Commission will hold funds paid 
pursuant to this paragraph in an account at the United States Treasury pending a decision whether 
the Commission, in its discretion, will seek to distribute funds or, subject to Exchange Act Section 
21F(g)(3), transfer them to the general fund of the United States Treasury. If timely payment is not 
made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.  Payment shall be made in the 

 14 
following installments: $250,000 within 30 days after entry of this order; $250,000 within 120 
days after entry of this order; $250,000 within 210 days after entry of this order; and the remaining 
balance within 300 days after entry of this order. Payments shall be applied first to post order 
interest, which accrues pursuant to 31 U.S.C. § 3717. Prior to making the final payment set forth 
herein, Respondent shall contact the staff of the Commission for the amount due. If Respondent 
fails to make any payment by the date agreed and/or in the amount agreed according to the 
schedule set forth above, all outstanding payments under this Order, including post-order interest, 
minus any payments made, shall become due and payable immediately at the discretion of the staff 
of the Commission without further application to the Commission. 
 
Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying Meta 
Materials, Inc. as a Respondent in these proceedings, and the file number of these proceedings; a 
copy of the cover letter and check or money order must be sent to B. David Fraser, Associate 
Director, Division of Enforcement, Securities and Exchange Commission, 801 Cherry Street, Suite 
1900, Unit 18, Fort Worth, TX 76102.   
 
 C.  Regardless of whether the Commission in its discretion orders the creation of a 
Fair Fund for the penalties ordered in this proceeding, amounts ordered to be paid as civil money 
penalties pursuant to this Order shall be treated as penalties paid to the government for all 
purposes, including all tax purposes. To preserve the deterrent effect of the civil penalty, 
Respondent agrees that in any Related Investor Action, it shall not argue that it is entitled to, nor 
shall it benefit by, offset or reduction of any award of compensatory damages by the amount of any 
part of Respondent’s payment of a civil penalty in this action (“Penalty Offset”). If the court in any 
Related Investor Action grants such a Penalty Offset, Respondent agrees that it shall, within 30 
days after entry of a final order granting the Penalty Offset, notify the Commission’s counsel in 
this action and pay the amount of the Penalty Offset to the Securities and Exchange Commission.  
Such a payment shall not be deemed an additional civil penalty and shall not be deemed to change 

 15 
the amount of the civil penalty imposed in this proceeding. For purposes of this paragraph, a 
“Related Investor Action” means a private damages action brought against Respondent by or on 
behalf of one or more investors based on substantially the same facts as alleged in the Order 
instituted by the Commission in this proceeding. 
 
D.   Respondent acknowledges that the Commission is not imposing a civil penalty in 
excess of $1,000,000 based upon its agreement to cooperate in a Commission investigation and 
related enforcement action. If at any time following the entry of the Order, the Division of 
Enforcement (“Division”) obtains information indicating that Respondent knowingly provided 
materially false or misleading information or materials to the Commission, or in a related 
proceeding, the Division may, at its sole discretion and with prior notice to the Respondent, 
petition the Commission to reopen this matter and seek an order directing that the Respondent pay 
an additional civil penalty. Respondent may contest by way of defense in any resulting 
administrative proceeding whether it knowingly provided materially false or misleading 
information, but may not: (1) contest the findings in the Order; or (2) assert any defense to liability 
or remedy, including, but not limited to, any statute of limitations defense. 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
       Secretary 
 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES ACT OF 1933 

Release No. 11292 / June 25, 2024 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 100415 / June 25, 2024 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-21976 

 

 

In the Matter of 

 

META MATERIALS, INC. 

(f/k/a TORCHLIGHT 

ENERGY RESOURCES, 

INC.) 

 

Respondent. 

 

 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 8A OF THE SECURITIES ACT 

OF 1933 AND SECTION 21C OF THE 

SECURITIES EXCHANGE ACT OF 1934, 

MAKING FINDINGS, AND IMPOSING A 

CEASE-AND-DESIST ORDER 

   

 

I. 

 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-

and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act 

of 1933 (“Securities Act”) and Section 21C of the Securities Exchange Act of 1934 (“Exchange 

Act”) against Meta Materials, Inc. (“Respondent”). 

 

II. 

 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 

of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 

which the Commission is a party, and without admitting or denying the findings herein, except as 

to the Commission’s jurisdiction over him and the subject matter of these proceedings, which are 

admitted, Respondent consents to the entry of this Order Instituting Cease-and-Desist Proceedings 

Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange 

Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth 

below. 

 



 2 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

 

Summary 

 

1. In June 2021, Respondent raised $137.5 million in an at-the-market offering (the 

“ATM Offering”). Leading up to the offering and in connection with a merger, Respondent engaged 

in a scheme to inflate the price of its stock and defraud investors through numerous material 

misstatements and omissions about the potential value of a stock dividend to be issued as part of 

the merger. As a result of its fraudulent conduct, Respondent sold 16.2 million shares during its 

ATM Offering for tens of millions of dollars more than it could have absent its efforts to inflate its 

stock price.  

 

2. Respondent artificially inflated the value of its common stock by structuring a 

merger between its predecessor entities (Torchlight Energy Resources and Metamaterial Inc.) to 

include an unregistered preferred stock dividend that would not be immediately publicly tradeable 

(the “Preferred Dividend”), specifically designed to cause a “short squeeze.” Respondent privately 

and selectively disseminated—through paid consultants, private conversations with investors, and 

via social-media messages—the theory that the Preferred Dividend would cause a short squeeze by 

forcing short-sellers in Respondent’s stock to cover their positions before Torchlight issued the 

Preferred Dividend or risk violating their short contracts by having difficulty delivering the 

Preferred Dividend when the merger closed. But Respondent never disclosed in its public filings its 

intent to cause a short squeeze, and it waited until the last minute to announce the ATM Offering to 

capitalize on what Respondent believed would be a short-term price inflation of its stock. 

 

3. In support of its scheme, Respondent made false and misleading statements about 

the Preferred Dividend, which entitled its holders to receive the net proceeds of the sale of 

Respondent’s oil and gas assets. In its public filings, Respondent misrepresented the status of its 

efforts to market and sell those assets while concealing a planned spin-off of the assets into a new 

entity. Further, in May 2021, Respondent’s incoming Chief Executive Officer baselessly claimed 

that the value of the Preferred Dividend could be between $1 and $20 per share when, in fact, a 

valuation study by Respondent’s investment bankers only supported a per-share value range of 

$0.03 to $0.83. 

 

4. Respondent’s scheme occurred against the backdrop of a lax internal control 

environment. Respondent failed to devise and maintain internal accounting controls and make and 

keep adequate books and records by failing to account properly for the disposition of corporate 

assets or the recognition of legitimate expenses related to a series of payments made to stock 

promoters who rendered services to the company without any documentation. In addition, 

Respondent paid consulting fees designed to conceal the recruitment and compensation of a team 

 
1  The findings herein are made pursuant to Respondent's Offer of Settlement and are not 

binding on any other person or entity in this or any other proceeding. 

 



 3 

of individuals that were retained to spin-off Respondent’s oil and gas assets into a new entity at the 

same time that Respondent touted in its public statements its intention to make efforts to sell the oil 

and gas assets and distribute the net proceeds to Preferred Dividend holders. 

 

Respondent 

 

5. Meta Materials, Inc. (“Meta II” or “Respondent”) is a Nevada corporation 

headquartered in Dartmouth, Nova Scotia, Canada. Meta II was created on June 28, 2021 through a 

reverse merger between: (i) Torchlight Energy Resources, Inc. (“Torchlight”), a publicly traded 

Texas corporation headquartered in Plano, Texas that purported to be in the business of oil and gas 

exploration and production, then listed on the Nasdaq under the ticker symbol “TRCH”; and  (ii) 

Metamaterial, Inc. (“Meta I”), a Canadian headquartered company then listed on the Canadian 

Securities Exchange and focused on early-stage applied materials technology research and 

development. Today, Meta II’s common stock, which trades under the Nasdaq ticker symbol 

“MMAT,” is registered with the Commission pursuant to Section 12(b) of the Exchange Act. 

Concurrent with the merger, Torchlight issued the Preferred Dividend to Torchlight shareholders 

of record as of June 24, 2021, and Torchlight shares became Class A Preferred Shares of Meta II 

after the merger closed.  

 

Other Relevant Individuals 

 

6. John A. Brda, age 59, resides in St. Louis, Missouri. Brda served as Torchlight’s 

CEO from 2014 through its merger with Meta I on June 28, 2021. Post-merger, Brda held a 

consulting role with Meta II through late 2022.  

  

7. Georgios “George” Palikaras, age 42, is a Greek citizen who resides in Halifax, 

Nova Scotia, Canada. From 2011 to 2021, Palikaras was Meta I’s President & CEO. Upon Meta 

II’s creation, Palikaras became President & CEO of Meta II and served on its board of directors 

(“Board”). In October 2023, Meta II terminated Palikaras and he subsequently resigned from the 

Board.  

 

Background 

 

Torchlight’s Plan to Use a Preferred Dividend to Cause a Short Squeeze 

 

8. In early 2020, after selling off essentially all of its revenue-generating oil and gas 

properties, Torchlight faced an uncertain future: its stock traded below $1.00 per share, Nasdaq 

issued a delisting warning, and its auditors issued a going-concern warning. In response to 

Torchlight’s predicament, Brda, Torchlight’s CEO, implemented a plan:  

 

• Find a merger partner who desired Torchlight’s Nasdaq listing but not its remaining oil 

and gas assets; 



 4 

• Issue a Preferred Dividend in the form of preferred stock that would not be listed or 

traded on any exchange as part of the merger structure, ostensibly to allocate proceeds 

from the sale of Torchlight’s remaining oil and gas assets to legacy Torchlight 

shareholders; 

• Market and promote the Preferred Dividend to emphasize to the market that short 

sellers would have difficulty obtaining the Preferred Dividend without owning 

Torchlight stock, thus pressuring short sellers to close their positions or obtain 

Torchlight stock before the record date for the Preferred Dividend (“Record Date”), 

temporarily inflating  the price of Torchlight’s common stock; 

• Leverage the resulting inflated common stock price to raise capital through an ATM 

Offering and remove debt through debt conversion; and 

• Use capital raised through the ATM Offering to drill wells required to maintain 

Torchlight’s remaining oil and gas leases. 

 

9. Brda explained his plan—including the use of the Preferred Dividend to pressure 

short sellers—to members of Torchlight’s Board of Directors, its investment banker, and several 

prospective merger partners, including Palikaras and the Meta I Board of Directors. From its 

earliest conception, in brainstorming the plan with Torchlight’s Chairman and its lead banker in 

June 2020, Brda explained that, “[b]y issuing a Pref to [Torchlight] shareholders of record at 

closing, and announcing it as part of the [merger agreement], the short position which is quite 

extensive will be forced to cover.” Also in June 2020, Brda explained to a potential merger partner 

that he expected Torchlight’s stock price to increase “temporarily because of the short squeeze” 

while acknowledging that the resulting price increase would be “unsustainable.” In initial merger 

discussions, Brda explained to Palikaras how the deal structure could create a short squeeze and the 

plan to “[p]lay up the [preferred share] dividend to make sure the shorts understand their 

dilemma.” 

 

Torchlight, Brda, and Palikaras Promoted the Short Squeeze Narrative 

 

Brda Caused Torchlight to Make Public Statements to “Play Up” the Preferred Dividend 

 

10. Torchlight never directly disclosed in any public filing the full scope of Brda’s plan 

to use the Preferred Dividend to create a short squeeze. In Torchlight’s 2020 Form 10-K filed 

March 18, 2021, Torchlight disclosed that “[t]he market price of our common stock may be 

influenced by many factors,” including among “many” other factors, “actual or purported ‘short-

squeeze’ trading activity.” However, Torchlight did not publicly disclose that the Preferred 

Dividend could cause a short squeeze, much less that the Preferred Dividend was designed to 

create a short squeeze or that the ATM Offering was conducted to “take advantage of the squeeze.” 

Instead, Torchlight’s 2020 Form 10-K stated that “we have no reason to believe our shares would 

be the target of a short squeeze,” which was directly contrary to the statements that Respondent 

and its executives made privately about the Preferred Dividend and the plan to create a short 

squeeze.  

 



 5 

11. Instead, in reports filed with the Commission and in public statements, Brda and 

Torchlight focused attention on the Preferred Dividend and the supposed net profits from the sale 

of Torchlight’s oil and gas assets that Preferred Dividend holders could expect to receive, 

highlighting the Preferred Dividend in the announcement of the merger, the announcement of a 

final signed merger agreement, and the proxy filings concerning the merger. Torchlight also 

emphasized in its proxy filings that the Preferred Dividend would not be registered, would not be 

listed on any national exchange, and would not be “freely transferrable” unless an exemption 

applied. Brda believed that once short sellers understood it would be difficult acquire the Preferred 

Dividend in the market, they would be forced to cover their short positions in Torchlight because 

they would otherwise have difficulty obtaining the Preferred Dividend to comply with the terms of 

their short contracts, which would require them to deliver the proceeds or equivalent value of an 

in-kind dividend like Torchlight’s Preferred Dividend. The company planned to leverage this 

short-covering activity by issuing shares via an ATM Offering and removing debt through equity 

conversions. But neither Torchlight nor Brda explained the full plan in public; rather, they 

selectively disseminated portions of the plan through consultants, via hints dropped on social 

media, and to select investors. 

 

Torchlight and Brda Used Consultants to Spread Their Short Squeeze Theory to Investors 

 

12. Torchlight paid individual consultants to communicate with Torchlight’s current or 

potential shareholders. Through these consultants—two of whom Brda introduced to Palikaras as 

his “guys on stock support”—Brda communicated selective information about the merger to 

investors. For example, Brda emailed two of the consultants a slide presentation containing the 

plan to “[p]lay up the dividend to make sure the shorts understand their dilemma.”  

 

13. On the day that Torchlight and Meta I announced their letter of intent to merge, 

Brda forwarded the consultants a draft press release announcing the merger, complaining that the 

stock price had not moved enough, “I think people don't understand the dividend properly.” On 

September 21, 2020, Brda forwarded to two consultants the press release that Torchlight issued 

that day, announcing that it had entered into a letter of intent with Meta I to merge, and the 

following exchange occurred: 

 

Brda: We need your guys to embrace it. IMO, you get the [Torchlight] value up to $1 and 

then the 25% of META is free. Lots of room to build a nice position. 

 

Consultant: Agreed, Everyone I’ve spoke [sic] to today love it and are buying more and 

are long term investors! TONS of volume but not moving up? 

 

Brda: I think people don't understand the dividend properly. 

 

Consultant: I agree, I’m explaining it and I can hear the light come on while I’m talking to 

people. 

 

14. In January 2021, Brda emailed information about the outstanding short position in 

Torchlight to the stock-support consultants and wrote, “[w]e all knew [the shorts] would come 



 6 

after us one more time. They are creating a massive bubble, IMO, that is going to slingshot in our 

favor. The dividend is going to be a huge problem for them.”  

 

15. Other than generic contracts obligating the consultants to “introduce” the company 

to potential investors, Torchlight kept no records documenting why Torchlight paid the stock-

support consultants $3,000 to $5,000 per month plus stock warrants for their services. 

 

Torchlight, Brda, and Palikaras Promoted the Short Squeeze Narrative in Communications 

with Select Investors and Select Prospective Investors  

 

 Virtual Investor Conference 

 

16. During Spring 2021, Brda and Palikaras conducted meetings with investors through 

conferences organized by Torchlight’s financial advisors. From March 16-18, 2021, Brda and 

Palikaras met with a series of institutional investors at a virtual investor conference. During these 

meetings, Brda and Palikaras pitched the justification for the merger to one investor group at a 

time, and Brda explained to at least one investment firm the potential for the Preferred Dividend to 

cause a short squeeze and Torchlight’s plan to conduct a substantial ATM Offering concurrent 

with the merger close. In contrast, Torchlight never disclosed in its public filings the Preferred 

Dividend’s potential impact on short sellers, and it waited to publicly disclose the ATM Offering 

until June 16, 2021. 

 

Italian Investor Call 

 

17. In May 2021, Torchlight’s investor relations firm set up several virtual meetings 

with a group of Italian shareholders that Torchlight believed held more than one million shares of 

its common stock. Brda attended one of the meetings, and Palikaras attended another. The stated 

purposes of the meetings were to solicit the Italian shareholders’ proxy votes in favor of the merger 

and to encourage the investors to hold the common stock of the post-merger company. During his 

May 13, 2021 meeting with Italian shareholders (the “Italian Investor Call”), Palikaras described 

the plan to use the Preferred Dividend to create a short squeeze on several occasions, for example: 

 

And there is one more element to add here, which is the, let’s call the x-factor. If 

you notice the Torchlight stock is massively shorted … This deal is set up not to 

give a [cash] dividend at closing… As a result, there is no physical way for the 

shorts to cover the stock when the time to close, and we believe … the close, it’s 

called a short squeeze… (emphasis added). 

 

18. On June 7, 2021, a user posted on social media a screenshot purporting to show that 

the user recorded the Italian Investor Call. The user claimed they participated in the call and 

summarized their takeaways, including that the Preferred Dividend would “create a short squeeze 

as there are many short stocks to cover before the merger!!” Three days later, a Reddit user posted 

a partial audio recording of Palikaras’s comments during the Italian Investor Call, including the 

plan to create a short squeeze. 

 



 7 

Torchlight, Brda, and Palikaras Promoted the Short Squeeze Narrative, Including on 
Social Media 

 

19. Palikaras and Brda also used Twitter to tout the Preferred Dividend and short 

squeeze theory. For instance, on June 7, 2021, one week before Torchlight announced the Record 

Date, Brda posted on Torchlight’s Twitter account a video discussing short squeezes in the context 

of other stocks. After viewing the tweet, Palikaras texted Brda, advising caution: “I don’t think you 

should be sharing posts on the short squeeze…yet. Just my two cents. Once it happens that’s ok as 

it is fact, but [if you do it] before you are putting yourself at risk for potentially speculative 

content.” (emphasis added). 

 

20. Six days later, the day before Torchlight announced the Record Date, Palikaras 

tweeted a graphic of shorts-in-flames, kicking off a series of tweets and public statements designed 

to promote the short squeeze theory and encourage investors to purchase Torchlight’s common 

stock:  

 

 

21. Palikaras’s tweet received several public replies connecting the tweet to the short 

squeeze theory. For example, one user responded, “You should set the price of the shorts the price 

of TRCH at the end of the short squeeze.” Another wrote, “We definitely get the reference ‘Shorts 

Are Getting Burne[d].’” 

 

22. The next day, on June 14, 2021, Torchlight issued a press release announcing the 

Record Date (June 24, 2021), kicking off the sequence of events that culminated in the ATM 

Offering. 

 



 8 

Torchlight, Brda, and Palikaras Misrepresented the Value of the Preferred Dividend 

 

23. To support their efforts to manipulate the market for Torchlight’s common stock 

and encourage investors to buy or hold Torchlight’s common stock, Torchlight and Brda 

misrepresented the likelihood of a distribution of the “net proceeds” from the sale of Torchlight’s 

oil and gas assets. They encouraged investors to buy or hold Torchlight’s common stock by: (1) 

Torchlight and Brda giving the false impression in public filings and statements that Torchlight 

would undertake commercially reasonable efforts to sell the oil and gas assets; (2) Torchlight and 

Brda referencing the net proceeds that would be distributed to Preferred Dividend holders 

following the sale; and (3) Palikaras providing a wholly unsupported per-share value estimate 

(between $1 and $20) of net proceeds payable to Preferred Dividend shareholders that became a 

widely circulated talking point on social media. 

 

Torchlight and Brda Misrepresented Ongoing “Commercially Reasonable Efforts” to Sell 

Torchlight’s Oil and Gas Assets and Distribute “Net Proceeds” in Proxy Filings and 

Forms 8-K 

 

24. In public filings leading up to the merger, particularly in its preliminary and final 

proxy materials soliciting shareholder approval, Torchlight bolstered the potential value of the 

Preferred Dividend by misrepresenting that it would make “commercially reasonable efforts” to 

sell its oil and gas assets and distribute the net proceeds to Class A Preferred Shareholders within 

six months of the merger closing. In total, Torchlight repeated the claim that it would make 

“commercially reasonable efforts” to sell the oil and gas assets seven or eight times in each version 

of the proxy filings. And, references to the net proceeds to be distributed to preferred shareholders 

repeatedly appeared in press releases throughout the period that the merger was pending, including 

press releases dated April 15, 2021, May 3, 2021, and June 14, 2021 subsequently attached to 

current reports filed with the Commission. 

 

25. In reality, Torchlight had no prospects to sell the oil and gas assets. Torchlight 

made no effort to lay the groundwork for a sale when it made the aforementioned statements. The 

company’s records contain no evidence of any communications with specific prospects from any 

time in 2020 or 2021. Due to the size and unproven state of Torchlight’s oil and gas assets, only a 

small number of very large oil companies would be viable candidates to purchase Torchlight’s 

assets. Even Brda acknowledged that only “very specialized buyers” would be interested in 

Torchlight’s assets and that it would take from up to a year to a year and a half to complete the sale 

considering the due diligence a specialized buyer would need to undertake. Torchlight’s long-time 

investment banker, who was not retained to sell the oil and gas assets, believed that it could take 

two to three years to complete such a sale.  

 

26. To the contrary, as early as December 2020, Brda had already begun planning a 

spin-off of the oil and gas assets into a new entity. Just days after Torchlight and Meta I signed the 

definitive agreement for the merger, Brda circulated to Torchlight’s Chairman and other insiders 

presentations outlining capital formation plans for a spin-off entity, “Next Bridge Hydrocarbons, 

Inc.” Then, in January 2021, Brda and Torchlight began paying $20,000 a month (through an 



 9 

intermediary who received “consulting fees” for doing no actual work) to individuals who would 

form the initial management team of Next Bridge Hydrocarbons.  

 

27.  By August 17, 2021, less than 60 days after the merger closed, Meta II’s board 

voted to drill wells required to maintain the leases, with a goal of spinning off the assets into a 

separate company as soon as possible. Then, in December 2022, Meta II spun out the oil and gas 

assets into a new company—Next Bridge Hydrocarbons—the same entity name that Brda 

identified when he first began to plan for a spin-off transaction in December 2020.  

 

Palikaras’s False Claim About the Value of the Preferred Share Dividend 

 

28. On the May 13, 2021 Italian Investor Call, where Palikaras described the short 

squeeze to a select group of investors, he also made false and misleading statements about 

Torchlight’s efforts to sell its oil and gas assets, and the potential values of a cash distribution of 

the net proceeds from that sale.  

 

29. During the call, Palikaras claimed that Torchlight was speaking to “the right 

potential buyers” and that those buyers were “top tier,” when, in fact, Torchlight had not identified 

any potential buyers and Palikaras admitted that he had no knowledge of potential buyers or active 

negotiations.  

 

30. Palikaras also mentioned on the Italian Investor Call that, “according to the 

analysis,” the value of the Preferred Dividend could be between $1-$20 per share. The $1-$20 

range was wholly unsupported by a valuation study performed by Torchlight’s investment bankers 

that Palikaras reviewed, which estimated the asset value from $0.034 to $0.83 per share. 

Palikaras’s reference to an “analysis” gave investors the misleading impression that his value range 

was supportable when it was not. 

 

31. These statements by Palikaras quickly became a topic of discussion on social 

media, continuing to drive mentions throughout the ATM offering period. A common refrain on 

social media was that the company’s CEO (Palikaras) estimated that the Preferred Dividend would 

be worth $20 per share. 

 

32. After the merger, Meta II’s VP of Business Development emailed Palikaras and 

other Meta II leadership about an investor complaint citing the $1-$20 dividend range. In the 

email, the VP stated plainly, “[t]he dividend was never going to be worth more than $1… The 

math was not difficult prior to the merger: value of O&G assets / number of pre-existing TRCH 

shares.”  

 

Torchlight, Brda, and Palikaras Misled Investors about the Preferred Dividend. 

 

33. The false and misleading statements by Torchlight, Brda, and Palikaras made 

investors believe that Meta II could quickly monetize the oil and gas assets and distribute the net 

proceeds to Preferred-Dividend holders post-merger. This belief incentivized Torchlight 

shareholders to acquire or hold the common stock through the Record Date so they would be 



 10 

eligible to receive the Preferred Dividend. On July 21, 2021, just weeks after the merger closed, 

Meta II’s CFO emailed Palikaras about the importance of demonstrating to the marketplace that 

Meta II took steps to diligently pursue a purchaser for the oil and gas assets before proceeding to a 

spin-off given the “preferred holders who are expecting to see cash for their shares.” 

 

34. As it became clear that Meta II would not immediately pay Preferred Dividend 

holders any net proceeds and that no Torchlight asset sale (or net proceeds therefrom) were 

forthcoming, investors began to complain. One investor emailed Palikaras directly on August 15, 

2021, suggesting that Meta II issue stock to Preferred Dividend holders “somewhere near the 

middle of the proposed $1 - $20 dividend range” to “help take the sting away.”  

 
Torchlight’s Market Manipulation Scheme Caught Fire 

 

35. Brda and Palikaras privately celebrated as Torchlight’s stock became a hot topic of 

conversation on social media in the days before the merger. Users on platforms from Twitter to 

Stocktwits to YouTube to Reddit discussed the merger, the Preferred Dividend, and the short 

squeeze. On June 14, 2021, Brda sent Palikaras an image of an online campaign promoting the 

short squeeze theory using the hashtag “#TORCHDAY,” which succinctly summed up the plan: 

“Post and educate people about our short squeeze … #TORCHDAY” and “Post and educate 

people about our dividend ranging from $1 - $20 (deadline 06/22).” The graphic went on to 

explain, “[Torchlight] is a heavily shorted stock, and due to the fact a preferred share dividend is 

being granted to stockholders SHORTS HAVE TO COVER which can lead to a short squeeze of 

the stock.” The Torch Day graphic also explicitly referenced Palikaras’s “shorts-in-flames” tweet 

from the day before.  

 

36. Social media users posted the hashtag and versions of the graphic dozens of times 

in the days surrounding the Record Date announcement. And users on many other social-media 

platforms picked up on the basic gist of the scheme to promote purchasing Torchlight common 

stock by June 22, 2021 to benefit from the supposed short squeeze and the Preferred Dividend 

worth $1-$20 per share, using other hashtags, subreddits, and iterations on the short squeeze 

theory. 

 

37. Palikaras celebrated the “#TORCHDAY” campaign’s impact on the price of 

Torchlight’s stock and what it portended for the plan to use the ATM Offering to capitalize on the 

attention, texting Brda: “To the moon! We are happy to take $100-200m at a 20% PREMIUM TO 

THE MARKET and a minimum of $7 whatever is largest.” (emphasis in original). Brda agreed: “I 

think we can get there, just need to have diamond hands.”  

 

38. The trading volume in Torchlight’s common stock dramatically escalated as the 

merger approached. In May 2021, the average trading volume was five million shares per day. But, 

between the announcement of the Record Date on June 14 and the deadline to purchase Torchlight 

stock in order to obtain the Preferred Dividend on June 22, the average trading volume exceeded 

80 million shares per day.  

 

39. On June 14, 2021, the day after Palikaras made his “shorts-in-flames” tweet, 

Torchlight issued a press release, announcing the Record Date of June 24, 2021. Palikaras issued a 



 11 

tweet, linking the press release and promoting the June 24th record date: “[n]ice release by 

$TRCH, the dividend [record] date is 06/24 (ten day notice required), there is a T plus 2 rule so last 

chance to be in @TRCHEnergy is Tuesday 06/22 end of day.” Investors following Torchlight 

understood Palikaras’s tweet to mean that the supposed key to ensuring the short squeeze and 

obtaining the Preferred Dividend that Palikaras touted would be worth $1—$20 per share was to 

buy or hold Torchlight stock by or through June 22, 2021. Torchlight’s stock price immediately 

reacted, jumping from $3.58 to $5.07. It would reach $10.88 in the days leading up to the June 25 

merger close. 

 
Torchlight Profited from Its Manipulation of Torchlight’s Stock Price Using the ATM 
Offering 

 

40. Torchlight’s Board, Meta I’s Board, Brda, and Palikaras discussed their intention to 

raise funds at artificially inflated prices in a series of exchanges that occurred on the eve of the 

ATM Offering. As Torchlight’s stock price rose after the announcement of the Record Date, Brda 

demanded a quid pro quo from Meta I: Torchlight (and Brda) would not go forward with the long-

planned ATM Offering unless a portion of the funds raised by the ATM Offering would  go toward 

drilling oil wells to maintain Torchlight’s oil and gas leases.  

 

41. In a memo to the Meta I team, Brda explained that Torchlight’s Board would not 

agree to conduct the ATM Offering without assurances that they would receive the quid pro quo 

that they requested:  

 

We have the ATM that will be in play by Thursday morning… up to $100 Million…  

Raising money prior to the dividend record date, IMO, is the best way to get maximum 

money and at the best price… I believe I can get my board to approve if META would 

agree to lend a decent portion of the raise to [Torchlight]… Say 20% of the amount 

raised… Otherwise, we have no inclination to raise capital now as it only dilutes our oil 

and gas assets further…. The ducks are quacking, time to feed them!” (emphasis added).  

 

42. Palikaras and Meta I’s CFO recommended to Meta I’s Board that they approve 

conducting the ATM Offering, stating “all [Meta’s advisers] strongly recommended we take as 

much of the money as we can ahead of the closing.” (emphasis added). And although the ATM 

Offering would be “[d]ilutive to Torchlight [common and preferred] shareholders, before Ex-

Dividend date however it also takes advantage of the potential best pricing due to any short 

covering effect prior to the Ex-Date.” (emphasis added).  

 

43. Although Meta I did not formally agree to Brda’s demands, Meta II ultimately did 

enter into an agreement with Brda post-merger regarding an amount to fund drilling for the oil and 

gas assets—consistent with Brda’s original plan and part of his scheme.  

 

44. The day after Torchlight’s stock price increased dramatically in response to the 

news of the Record Date announcement, Torchlight executed a sales agreement with an investment 

bank to conduct the ATM Offering. As a result of the ATM Offering, Torchlight sold 16.2 million 

shares of common stock between June 18 and June 24, at an average price of $8.50 per share, 



 12 

raising $137.5 million. Over 95% of that volume was sold prior to the “T plus 2” date of June 22, 

2021. 

 

45. Torchlight’s stock reached its highest price around the “T plus 2 date” of June 22, 

2021 just as Torchlight, Brda, and Palikaras predicted. But after closing at $9.92/share on June 

21st, and $7.00/share on June 22nd, the stock price fell dramatically. On June 25, 2021, the 

Preferred Dividend payment date, the stock closed at $4.95/share. The following Monday (June 

28th), after Torchlight announced a 2-for-1 reverse stock split and the completion of its merger 

with Meta I, the company’s new ticker (MMAT) closed at $3.98/share (after accounting for the 

reverse split, less than half its prior day close). 

 

46. The communications by Brda and Palikaras during the ATM Offering reflected 

their intent to take advantage of the manipulated stock price. On Friday, June 18, after Torchlight 

sold two million shares on the first day of active selling on the ATM Offering, Brda texted 

Palikaras, “[w]e have two days to take advantage of the squeeze, today should have been a 5 

million share day at 6 [dollars per share]…” (emphasis added). Palikaras responded, “[f]ill her 

up[.]” Another member of Torchlight’s Board wrote to Brda, asking his input about transacting in 

the stock, “I won’t move if I have information that isn’t public, but if this short squeeze goes high 

enough I don’t want to miss it if I can participate legally.” (emphasis added). 

 

Violations 

 

47. As a result of the conduct described above, Respondent violated Section 10(b) of 

the Exchange Act and Rules 10b-5(a) and (c) thereunder, which prohibit fraudulent conduct in 

connection with the purchase or sale of securities; Section 17(a)(1) of the Securities Act, which 

prohibits the use of “any device, scheme, or artifice to defraud” in connection with the purchase or 

sale of securities; and Section 17(a)(3) of the Securities Act, which makes it unlawful for “any 

person in the offer or sale of any securities . . . directly or indirectly . . . to engage in any 

transaction, practice, or course of business which operates or would operate as a fraud or deceit 

upon the purchaser.”  

 

48. As a result of the conduct described above in Paragraphs 24 through 26, 

Respondent violated Section 17(a)(2) of the Securities Act, which makes it unlawful for “any 

person in the offer or sale of securities … directly or indirectly… to obtain money or property by 

means of any untrue statement of material fact or any omission to state a material fact necessary in 

order to make statements made, in light of the circumstances under which they were made, not 

misleading.”    

 

49. As a result of the conduct described above, Respondent violated Section 14(a) of 

the Exchange Act and Rule 14a-9 thereunder, which prohibit the use of a proxy statement which, at 

the time and in the light of the circumstances under which it is made, is false or misleading with 

respect to any material fact, or which omits to state any material fact necessary in order to make the 

statements therein not false or misleading or necessary to correct any statement in any earlier 

communications with respect to the solicitation of a proxy for the same meeting or subject matter 

which has become false or misleading. 



 13 

 

50. As a result of the conduct described above, Respondent violated Section 13(a) of 

the Exchange Act and Rules 12b-20, and 13a-11 thereunder, which require every issuer of a 

security registered pursuant to Section 12 of the Exchange Act to file with the Commission 

information, documents, and current reports as the Commission may require, and mandate that the 

reports contain such further material information as may be necessary to make the required 

statements not misleading. 

 

51. As a result of the conduct described above, Respondent violated Section 

13(b)(2)(A) of the Exchange Act, which requires issuers with a class of securities registered 

pursuant to Section 12 of the Exchange Act and issuers with reporting obligations pursuant to 

Section 15(d) of the Exchange Act to make and keep books, records, and accounts which, in 

reasonable detail, accurately and fairly reflect their transactions and dispositions of their assets. 

 

52. As a result of the conduct described above, Respondent violated Section 

13(b)(2)(B) of the Exchange Act, which requires issuers with a class of securities registered 

pursuant to Section 12 of the Exchange Act and issuers with reporting obligations pursuant to 

Section 15(d) of the Exchange Act to devise and maintain a system of internal accounting controls 

sufficient to provide reasonable assurances that (i) transactions are executed in accordance with 

management’s general or specific authorization; (ii) transactions are recorded as necessary (I) to 

permit preparation of financial statements in conformity with generally accepted accounting 

principles or any other criteria applicable to such statements, and (II) to maintain accountability for 

assets; (iii) access to assets is permitted only in accordance with management’s general or specific 

authorization; and (iv) the recorded accountability for assets is compared with the existing assets at 

reasonable intervals and appropriate action is taken with respect to any differences.  

 

IV. 

 In view of the foregoing, the Commission deems it appropriate and in the public interest to 

impose the sanctions agreed to in Respondent’s Offer. 

 

 Accordingly, it is hereby ORDERED that: 

 

 A. Pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act, 

Respondent cease and desist from committing or causing any violations and any future violations of 

Section 17(a) of the Securities Act and Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), and 14(a) of 

the Exchange Act and Rules 10b-5(a), 10b-5(c), 12b-20, 13a-11, and 14a-9 thereunder.  

 

 B. Respondent shall pay a civil penalty of $1,000,000 to the Securities and Exchange 

Commission. The Commission may distribute civil money penalties collected in this proceeding if, 

in its discretion, the Commission orders the establishment of a Fair Fund pursuant to 15 U.S.C. § 

7246, Section 308(a) of the Sarbanes-Oxley Act of 2002. The Commission will hold funds paid 

pursuant to this paragraph in an account at the United States Treasury pending a decision whether 

the Commission, in its discretion, will seek to distribute funds or, subject to Exchange Act Section 

21F(g)(3), transfer them to the general fund of the United States Treasury. If timely payment is not 

made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.  Payment shall be made in the 



 14 

following installments: $250,000 within 30 days after entry of this order; $250,000 within 120 

days after entry of this order; $250,000 within 210 days after entry of this order; and the remaining 

balance within 300 days after entry of this order. Payments shall be applied first to post order 

interest, which accrues pursuant to 31 U.S.C. § 3717. Prior to making the final payment set forth 

herein, Respondent shall contact the staff of the Commission for the amount due. If Respondent 

fails to make any payment by the date agreed and/or in the amount agreed according to the 

schedule set forth above, all outstanding payments under this Order, including post-order interest, 

minus any payments made, shall become due and payable immediately at the discretion of the staff 

of the Commission without further application to the Commission. 

 

Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying Meta 

Materials, Inc. as a Respondent in these proceedings, and the file number of these proceedings; a 

copy of the cover letter and check or money order must be sent to B. David Fraser, Associate 

Director, Division of Enforcement, Securities and Exchange Commission, 801 Cherry Street, Suite 

1900, Unit 18, Fort Worth, TX 76102.   

 

 C.  Regardless of whether the Commission in its discretion orders the creation of a 

Fair Fund for the penalties ordered in this proceeding, amounts ordered to be paid as civil money 

penalties pursuant to this Order shall be treated as penalties paid to the government for all 

purposes, including all tax purposes. To preserve the deterrent effect of the civil penalty, 

Respondent agrees that in any Related Investor Action, it shall not argue that it is entitled to, nor 

shall it benefit by, offset or reduction of any award of compensatory damages by the amount of any 

part of Respondent’s payment of a civil penalty in this action (“Penalty Offset”). If the court in any 

Related Investor Action grants such a Penalty Offset, Respondent agrees that it shall, within 30 

days after entry of a final order granting the Penalty Offset, notify the Commission’s counsel in 

this action and pay the amount of the Penalty Offset to the Securities and Exchange Commission.  

Such a payment shall not be deemed an additional civil penalty and shall not be deemed to change 



 15 

the amount of the civil penalty imposed in this proceeding. For purposes of this paragraph, a 

“Related Investor Action” means a private damages action brought against Respondent by or on 

behalf of one or more investors based on substantially the same facts as alleged in the Order 

instituted by the Commission in this proceeding. 

 

D.   Respondent acknowledges that the Commission is not imposing a civil penalty in 

excess of $1,000,000 based upon its agreement to cooperate in a Commission investigation and 

related enforcement action. If at any time following the entry of the Order, the Division of 

Enforcement (“Division”) obtains information indicating that Respondent knowingly provided 

materially false or misleading information or materials to the Commission, or in a related 

proceeding, the Division may, at its sole discretion and with prior notice to the Respondent, 

petition the Commission to reopen this matter and seek an order directing that the Respondent pay 

an additional civil penalty. Respondent may contest by way of defense in any resulting 

administrative proceeding whether it knowingly provided materially false or misleading 

information, but may not: (1) contest the findings in the Order; or (2) assert any defense to liability 

or remedy, including, but not limited to, any statute of limitations defense. 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

       Secretary