2023-05-12 sec-litreleases litigation_release 64 KB 2,180 chars

SEC v. Matthew Bell; and DiScala, No. LR-25725, Eastern District of New York (May 12, 2023) — Press Release

raw: Discala et al.

Discala et al., No. 1:14-cv-4346 (E.D.N.Y. May 12, 2023)

Caption: Securities and Exchange Commission v. DiScala et al.

summary

Former broker Matthew Bell received a final judgment from the SEC for manipulating CodeSmart Holdings, Inc. stock prices to profit at the expense of his brokerage customers.

paragraph

The SEC obtained a final judgment against Matthew Bell for his role in a scheme to manipulate the price of CodeSmart Holdings, Inc. securities. Bell was charged with violating several provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. He agreed to a permanent injunction and the disgorgement of $552,725 in ill-gotten gains and interest.

narrative

The SEC has obtained a final judgment against former broker Matthew Bell for his involvement in a scheme to manipulate the stock price of CodeSmart Holdings, Inc. starting in 2013. Bell allegedly used his brokerage customers, including several elderly individuals, to purchase CodeSmart shares while he simultaneously sold his own shares to profit at their expense. The SEC charged Bell with multiple violations of the Securities Act of 1933 and the Securities Exchange Act of 1934, including Rule 10b-5. As part of the resolution, Bell agreed to a permanent injunction against future violations and a penny stock bar. He was also ordered to disgorge $552,725 in ill-gotten gains and interest, a payment deemed satisfied by a restitution order in a parallel criminal proceeding. This final judgment follows a previous partial judgment entered by the court in December 2022.

Enriched metadata

Scheme: market-manipulation (95%)
Court: Eastern District of New York
Case No.: 1:14-cv-4346
Disgorgement: $552,725
Entity: CodeSmart Holdings, Inc.
CIK: 0001543098

Classified market-manipulation(confidence 95%). EDGAR detection: forms SC 13D/G/13F· recall 53% / precision 9%. detection rule →

Extracted insights

Dollar amounts 1

$553K $552,725 $100K–$1M

Entities 6

person his codesmart shares
person matthew bell
company scheme to manipulate price of codesmart holdings, inc. securities
agency sec litigation
agency Securities and Exchange Commission
court u.s. district court for the eastern district of new york

Triples 11

SEC obtains final judgment against Matthew Bell
U.S. District Court For The Eastern District Of New York entered final judgment against Matthew Bell
Matthew Bell was involved in scheme to manipulate price of CodeSmart Holdings, Inc. securities
Bell invested brokerage customers in CodeSmart
Bell personally sold his CodeSmart shares
Bell purchased shares in his customers' accounts
Bell agreed to be permanently enjoined from violations of the charged provisions
Bell agreed to disgorge $552,725
Todd Brody and Lindsay Moilanen handle SEC litigation
Sheldon L. Pollock and Joseph Sansone supervise SEC litigation
SEC appreciates assistance of U.S. Attorney's Office For The Eastern District Of New York and Federal Bureau Of Investigation

View original SEC litigation releasesec.gov

Extracted body text (2,180c)

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25725 / May 12, 2023 Securities and Exchange Commission v. DiScala et al., Civil Action No. 1:14-cv-4346 (E.D.N.Y. filed July 17, 2014; amended January 19, 2016). SEC Obtains Final Judgment Against Former Broker for Role in Alleged Offering Fraud On May 5, 2023, the U.S. District Court for the Eastern District of New York entered a final judgment against Matthew Bell, enjoining him from violating certain provisions of the federal securities laws. According to the SEC's complaint, starting in 2013, Bell was involved in a scheme to manipulate the price of the securities of CodeSmart Holdings, Inc. ("CodeSmart"). The SEC alleged that Bell and another individual invested their brokerage customers in CodeSmart, including a number of elderly customers. The SEC alleged that the plan was for the defendants, including Bell, to profit at the expense of Bell's customers. Bell allegedly personally sold his CodeSmart shares at the same time as purchasing shares in his customers' accounts. The SEC's complaint charged Bell with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Sections 9(a) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. On December 22, 2022, the Court entered a partial judgment against Bell by consent in which he agreed to be permanently enjoined from violations of the charged provisions and agreed to a penny stock bar. On May 5, 2023, the Court entered a final judgment against Bell by consent in which he agreed to be permanently enjoined from violations of the charged provisions. He agreed to disgorge $552,725 in ill-gotten gains and prejudgment interest thereon, the payment of which was deemed satisfied by the restitution order in the parallel criminal proceeding, United States v. DiScala, et al., 14 Cr. 399 (E.D.N.Y.). The SEC's litigation is being handled by Todd Brody and Lindsay Moilanen of the New York Regional Office and is being supervised by Sheldon L. Pollock and Joseph Sansone. The SEC appreciates the assistance of the U.S. Attorney's Office for the Eastern District of New York and the Federal Bureau of Investigation.

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