SEC Charges Paul McCabe and PMAC Consulting with Acting as Unregistered Brokers for Pre-IPO Stocks
summary
Paul John McCabe Jr. and PMAC Consulting LLC agreed to pay $3 million to resolve SEC charges for acting as unregistered broker-dealers in pre-IPO stock transactions.
paragraph
Paul John McCabe Jr. and his firm, PMAC Consulting LLC, were charged with violating federal securities laws by performing broker-dealer activities without proper registration. McCabe earned over $16 million in transaction-based compensation while negotiating pre-IPO stock deals for nearly 100 sellers. The settlement requires the parties to pay $3 million in civil penalties and accept industry and penny stock bars.
narrative
The SEC charged Paul John McCabe Jr. and his firm, PMAC Consulting LLC, for illegally brokering transactions involving private company stocks expected to undergo initial public offerings. McCabe acted as a primary intermediary, negotiating terms and providing valuations for nearly 100 sellers while earning more than $16 million in compensation. This misconduct occurred after McCabe had already been barred from broker activity by FINRA in 2016. To resolve the enforcement action, McCabe and PMAC agreed to pay $3 million in joint and several civil penalties. Additionally, they accepted industry and penny stock bars and agreed to a cease-and-desist order from future violations. The SEC's action aims to ensure transparency and accountability in the pre-IPO securities market.
Classified pre-ipo-fraud(confidence 100%). EDGAR detection: forms S-1/Form D/1-A· recall 72% / precision 8%. detection rule →
Parties
Alistaire Bambachdaniel lossDouglas J. SmithFinancial Industry Regulatory Authoritymegan r. genetmichael s. dibattistaPatricia SchragePaul John McCabe Jr.paul john mccabe jr. and pmac consulting llcpermanent bar from broker activity by finra in late 2016Pmac Consulting LLCSecurities and Exchange Commissionsheldon l. pollockSteven G. RawlingsSushila P. RaoTian Wen
Keywords
secmccabepmacpmac consultingmccabe pmacorder findsfinds mccabepre-ipoorderconsultingunregisteredbroker-dealerpaul mccabeconsulting actingacting unregistered
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 2
- $16.00M $16 million $10M–$100M
- $3.00M $3 million $1M–$10M
Entities 16
- person Alistaire Bambach
- person daniel loss
- person Douglas J. Smith
- organization Financial Industry Regulatory Authority
- person megan r. genet
- person michael s. dibattista
- person Patricia Schrage
- person Paul John McCabe Jr.
- company paul john mccabe jr. and pmac consulting llc
- agency permanent bar from broker activity by finra in late 2016
- organization Pmac Consulting LLC
- organization Securities and Exchange Commission
- person sheldon l. pollock
- person Steven G. Rawlings
- person Sushila P. Rao
- person Tian Wen
Triples 5
- Paul John McCabe Jr. and PMAC Consulting LLC Have Agreed To Pay $3 million
- McCabe Consented To Permanent Bar From Broker Activity By FINRA In Late 2016
- McCabe Received More Than $16 Million In Transaction-Based Compensation
- McCabe Negotiated Terms Of Transactions For Purchase And Sale Of Pre-IPO Shares
- McCabe Acted As Primary Intermediary Between Buyers, Sellers, And Their Agents
PDF (from attached: pdf)
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Extracted body text (2,549c)
The Securities and Exchange Commission today announced that Paul John McCabe Jr. and his unregistered firm PMAC Consulting LLC have agreed to pay $3 million to resolve SEC charges for illegally brokering transactions involving the stock of private companies that were expected to undertake an initial public offering (IPO). According to the SEC’s order, McCabe consented to a permanent bar from broker activity by the Financial Industry Regulatory Authority (FINRA) in late 2016 after he refused to provide documents and information while affiliated with a registered broker-dealer being examined by FINRA. The SEC’s order finds that McCabe concurrently established PMAC Consulting and continued engaging in broker activity without registering as a broker-dealer or associating with a registered broker-dealer. The order finds that McCabe negotiated the terms of transactions for the purchase and sale of pre-IPO shares, worked directly with issuers, provided advice or valuations to purchasers, and acted as the primary intermediary between buyers, sellers, and their agents or representatives. According to the order, McCabe received more than $16 million in transaction-based compensation through PMAC on behalf of several fund clients and nearly 100 sellers. "Broker-dealers serve a critical function in the securities markets; here, McCabe tried to circumvent the registration requirements that are in place to ensure that markets operate with transparency, fairness, and accountability," said Sheldon L. Pollock, Associate Director of the SEC’s New York Regional Office. “The SEC remains committed to those principles by vigilantly policing pre-IPO transactions and exposing unregistered participants improperly performing broker activities.” The SEC’s order finds that McCabe, who is based in Bethesda, Maryland, and PMAC violated the broker-dealer registration provision of the federal securities laws. Without admitting or denying the findings, McCabe and PMAC agreed to industry and penny stock bars as well as joint and several civil penalties of $3 million. They also agreed to cease and desist from future violations. The SEC’s investigation was conducted by Michael S. DiBattista, Megan R. Genet, Tian Wen, Douglas J. Smith, Sushila P. Rao, Patricia Schrage, Alistaire Bambach, Daniel Loss, and Steven G. Rawlings of the New York Regional Office. The case was supervised by Mr. Pollock. The SEC appreciates the assistance of FINRA. Investors can read this Investor Alert to learn more about the risks of investing in pre-IPO offerings.
OCR text (2,549c · html-text · 99% conf)
The Securities and Exchange Commission today announced that Paul John McCabe Jr. and his unregistered firm PMAC Consulting LLC have agreed to pay $3 million to resolve SEC charges for illegally brokering transactions involving the stock of private companies that were expected to undertake an initial public offering (IPO). According to the SEC’s order, McCabe consented to a permanent bar from broker activity by the Financial Industry Regulatory Authority (FINRA) in late 2016 after he refused to provide documents and information while affiliated with a registered broker-dealer being examined by FINRA. The SEC’s order finds that McCabe concurrently established PMAC Consulting and continued engaging in broker activity without registering as a broker-dealer or associating with a registered broker-dealer. The order finds that McCabe negotiated the terms of transactions for the purchase and sale of pre-IPO shares, worked directly with issuers, provided advice or valuations to purchasers, and acted as the primary intermediary between buyers, sellers, and their agents or representatives. According to the order, McCabe received more than $16 million in transaction-based compensation through PMAC on behalf of several fund clients and nearly 100 sellers. "Broker-dealers serve a critical function in the securities markets; here, McCabe tried to circumvent the registration requirements that are in place to ensure that markets operate with transparency, fairness, and accountability," said Sheldon L. Pollock, Associate Director of the SEC’s New York Regional Office. “The SEC remains committed to those principles by vigilantly policing pre-IPO transactions and exposing unregistered participants improperly performing broker activities.” The SEC’s order finds that McCabe, who is based in Bethesda, Maryland, and PMAC violated the broker-dealer registration provision of the federal securities laws. Without admitting or denying the findings, McCabe and PMAC agreed to industry and penny stock bars as well as joint and several civil penalties of $3 million. They also agreed to cease and desist from future violations. The SEC’s investigation was conducted by Michael S. DiBattista, Megan R. Genet, Tian Wen, Douglas J. Smith, Sushila P. Rao, Patricia Schrage, Alistaire Bambach, Daniel Loss, and Steven G. Rawlings of the New York Regional Office. The case was supervised by Mr. Pollock. The SEC appreciates the assistance of FINRA. Investors can read this Investor Alert to learn more about the risks of investing in pre-IPO offerings.