SEC v. Vincenzo Carnovale; and Amar Bahadoorsingh, No. LR-25919, District of Massachusetts (Jan. 3, 2024) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25919 / January 3, 2024 Securities and Exchange Commission v. Carnovale, et al., Civil Action No. 1:21-cv-11938 (D. Mass. filed December 2, 2021) SEC Obtains Judgment Against Individual for Participating in Fraudulent Microcap Scheme The Securities and Exchange Commission announced a judgment against an individual charged with participating in a fraudulent scheme involving unlawful microcap stock sales at the expense of unsuspecting retail investors. Among other things, the final judgment against Canadian resident Vincenzo Carnovale ordered him to pay $667,653. The SEC's complaint alleged that, from 2016 through at least October 2020, Carnovale and Canadian resident Amar Bahadoorsingh secretly gained control of thinly traded microcap companies, hired stock promoters to create demand for their stock, and generated substantial illicit profits by selling the stock to unsuspecting investors. Carnovale and Bahadoorsingh allegedly hid the fact that they controlled the securities of publicly traded companies. They allegedly misled investors, brokers, and transfer agents (companies that maintain records of stock ownership) to convince these parties that the defendants' stock shares were eligible for trading in the public markets, when in fact their stock was not appropriately registered for sale with the SEC. They also allegedly caused the microcap companies to make materially false and misleading statements in their publicly filed financial statements and reports. On January 2, 2024, the federal district court in Boston, Massachusetts entered a final judgment by consent against Carnovale, permanently enjoining him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder, and the registration provisions of Section 5 of the Securities Act. The Court also imposed a penny stock bar on Carnovale and a conduct-based injunction prohibiting Carnovale from participating in the issuance, purchase, offer, or sale of any security except for a security on a national securities exchange for his own account, and ordered him to pay disgorgement of ill-gotten gains of $364,683, $79,741 in prejudgment interest thereon, and a civil penalty of $223,229. On March 31, 2023, Bahadoorsingh was ordered to pay $466,619 for his role in the fraudulent scheme. The SEC’s case was handled by David J. D’Addio, Dahlia Rin, and Amy Gwiazda in the Boston Regional Office. Final Judgment Litigation Release No. 25685 / March 31, 2023 Judgment

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25919 / January 3, 2024 Securities and Exchange Commission v. Carnovale, et al., Civil Action No. 1:21-cv-11938 (D. Mass. filed December 2, 2021) SEC Obtains Judgment Against Individual for Participating in Fraudulent Microcap Scheme The Securities and Exchange Commission announced a judgment against an individual charged with participating in a fraudulent scheme involving unlawful microcap stock sales at the expense of unsuspecting retail investors. Among other things, the final judgment against Canadian resident Vincenzo Carnovale ordered him to pay $667,653. The SEC's complaint alleged that, from 2016 through at least October 2020, Carnovale and Canadian resident Amar Bahadoorsingh secretly gained control of thinly traded microcap companies, hired stock promoters to create demand for their stock, and generated substantial illicit profits by selling the stock to unsuspecting investors. Carnovale and Bahadoorsingh allegedly hid the fact that they controlled the securities of publicly traded companies. They allegedly misled investors, brokers, and transfer agents (companies that maintain records of stock ownership) to convince these parties that the defendants' stock shares were eligible for trading in the public markets, when in fact their stock was not appropriately registered for sale with the SEC. They also allegedly caused the microcap companies to make materially false and misleading statements in their publicly filed financial statements and reports. On January 2, 2024, the federal district court in Boston, Massachusetts entered a final judgment by consent against Carnovale, permanently enjoining him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder, and the registration provisions of Section 5 of the Securities Act. The Court also imposed a penny stock bar on Carnovale and a conduct-based injunction prohibiting Carnovale from participating in the issuance, purchase, offer, or sale of any security except for a security on a national securities exchange for his own account, and ordered him to pay disgorgement of ill-gotten gains of $364,683, $79,741 in prejudgment interest thereon, and a civil penalty of $223,229. On March 31, 2023, Bahadoorsingh was ordered to pay $466,619 for his role in the fraudulent scheme. The SEC’s case was handled by David J. D’Addio, Dahlia Rin, and Amy Gwiazda in the Boston Regional Office. Final Judgment Litigation Release No. 25685 / March 31, 2023 Judgment