SEC v. Amar Bahadoorsingh; and Vincenzo Carnovale, No. LR-25685, District of Massachusetts (Mar. 31, 2023) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25685 / March 31, 2023 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 Amar Bahadoorsingh, last of Canada, ordered him to pay $466,619. The SEC's complaint alleges that, from 2016 through at least October 2020, Bahadoorsingh and Canadian resident Vincenzo Carnovale 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. Bahadoorsingh and Carnovale 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) in order 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. Additionally, Bahadoorsingh allegedly fabricated documents that he provided to brokers and transfer agents in order to avoid due diligence procedures those parties had in place to comply with the securities laws. On March 31, 2023, the federal district court in Boston, Massachusetts entered a final judgment by default against Bahadoorsingh, 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 ("Exchange Act") and Rule 10b-5 thereunder, and the registration provisions of Section 5 of the Securities Act. The Court also imposed a penny stock bar on Bahadoorsingh and ordered him to pay disgorgement of ill-gotten gains of $231,020, $28,416 in prejudgment interest thereon, and a civil penalty of $207,183. On June 30, 2022, Bahadoorsingh was ordered in a separate SEC action to pay over $700,000 for his alleged participation in a fraudulent scheme to sell shares of microcap company Aureus Inc. The SEC's ongoing case against defendant Vincenzo Carnovale is being handled by David J. D'Addio, Dahlia Rin, and Amy Gwiazda in the Boston Regional Office. Judgment

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25685 / March 31, 2023 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 Amar Bahadoorsingh, last of Canada, ordered him to pay $466,619. The SEC's complaint alleges that, from 2016 through at least October 2020, Bahadoorsingh and Canadian resident Vincenzo Carnovale 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. Bahadoorsingh and Carnovale 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) in order 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. Additionally, Bahadoorsingh allegedly fabricated documents that he provided to brokers and transfer agents in order to avoid due diligence procedures those parties had in place to comply with the securities laws. On March 31, 2023, the federal district court in Boston, Massachusetts entered a final judgment by default against Bahadoorsingh, 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 ("Exchange Act") and Rule 10b-5 thereunder, and the registration provisions of Section 5 of the Securities Act. The Court also imposed a penny stock bar on Bahadoorsingh and ordered him to pay disgorgement of ill-gotten gains of $231,020, $28,416 in prejudgment interest thereon, and a civil penalty of $207,183. On June 30, 2022, Bahadoorsingh was ordered in a separate SEC action to pay over $700,000 for his alleged participation in a fraudulent scheme to sell shares of microcap company Aureus Inc. The SEC's ongoing case against defendant Vincenzo Carnovale is being handled by David J. D'Addio, Dahlia Rin, and Amy Gwiazda in the Boston Regional Office. Judgment