In re Lawrence I. Rosen
summary
Lawrence I. Rosen violated Sections 13(d) and 16(a) of the Securities Exchange Act by failing to timely file beneficial ownership reports for five companies, including JAKKS Pacific, after crossing ownership thresholds, resulting in a $150,000 civil penalty, a cease-and-desist order, and non-dischargeable debt under Bankruptcy Code § 523(a)(19).
paragraph
Lawrence I. Rosen failed to file required Schedule 13D/G reports after exceeding 5% beneficial ownership in JAKKS Pacific, Meet Group, FTE Networks, FuelCell Energy, and Remark Holdings, with some filings delayed over a year. He also repeatedly violated Section 16(a) by missing Form 3, Form 4, and Form 5 deadlines for JAKKS stock transactions between March 2021 and February 2022, including filing Schedule 13G instead of Schedule 13D after surpassing 20% ownership. The SEC imposed a $150,000 civil penalty, ordered a cease-and-desist, and declared the penalty non-dischargeable in bankruptcy under 11 U.S.C. § 523(a)(19), without requiring proof of scienter.
narrative
Lawrence I. Rosen violated Sections 13(d) and 16(a) of the Securities Exchange Act by failing to timely file beneficial ownership reports after crossing the 5% threshold in five public companies: JAKKS Pacific, Meet Group, FTE Networks, FuelCell Energy, and Remark Holdings. As a greater than 10% owner of JAKKS, he also failed to file timely Form 3, Form 4, and Form 5 disclosures for multiple stock transactions between March 2021 and February 2022, with some reports delayed until January 2023. Rosen improperly filed Schedule 13G instead of Schedule 13D after surpassing 20% ownership in JAKKS, undermining the transparency required by federal securities law. The SEC accepted his settlement offer, which included no admission of guilt but acknowledged jurisdiction and the factual basis for the violations. As part of the order, Rosen was fined $150,000, ordered to cease and desist from future violations, and required to repay any compensatory damages received in related investor actions within 30 days. The penalty is non-dischargeable under Bankruptcy Code § 523(a)(19), reflecting the seriousness of the reporting failures. Liability under Sections 13(d) and 16(a) is strict—no intent or profit motive is required, only mechanical failure to report timely and accurately. The violations spanned from March 2018 to early 2023 and involved over 50 transactions totaling approximately $13 million in purchases and sales.
Classified non-corporate(confidence 90%). No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →
Statutes
31 U.S.C. § 371711 U.S.C. § 52311 U.S.C. § 523(a)SECTION 21C OF THE SECURITIES EXCHANGE ACTRule 13d-1(a)Rule 13d-2(a)Rule 13d-2Rule 13d-1(c)Rule 13d-1(f)Rule 13d-2(b)Rule 13d-2(d)Rule 13d-3Rule 16a-3Rule 13d-1
Parties
Securities and Exchange CommissionLawrence I. Rosen
Keywords
respondentbeneficial ownershipbeneficialexchangecommon stockfileownershipcommissionsecuritiesstockbeneficial ownerwithin daysclassschedulecommon
Extracted insights
Dollar amounts 2
- $13.00M $13 million $10M–$100M
- $150K $150,000 $100K–$1M
Entities 5
- person lawrence i. rosen
- company section 13(d) by failing to timely file statements regarding fte networks, inc.
- company section 13(d) by failing to timely file statements regarding jakks pacific, inc.
- company section 13(d) by failing to timely file statements regarding meet group inc.
- agency Securities and Exchange Commission
Triples 10
- Securities And Exchange Commission instituted cease-and-desist proceedings against Lawrence I. Rosen
- Lawrence I. Rosen submitted Offer Of Settlement
- Securities And Exchange Commission accepted Offer Of Settlement
- Lawrence I. Rosen consented to entry of Order Instituting Cease-and-Desist Proceedings
- Lawrence I. Rosen violated Section 13(d) by failing to timely file statements regarding JAKKS Pacific, Inc.
- Lawrence I. Rosen violated Section 13(d) by failing to timely file statements regarding Meet Group Inc.
- Lawrence I. Rosen violated Section 13(d) by failing to timely file statements regarding FTE Networks, Inc.
- Lawrence I. Rosen violated Section 13(d) by failing to timely file statements regarding FuelCell Energy Inc.
- Lawrence I. Rosen violated Section 13(d) by failing to timely file statements regarding Remark Holdings Inc.
- Lawrence I. Rosen violated Section 16(a) on multiple occasions
Text layers
Extracted body text (26,842c)
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 98545 / September 27, 2023
ADMINISTRATIVE PROCEEDING
File No. 3-21730
In the Matter of
Lawrence I. Rosen,
Respondent.
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO
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 21C of the
Securities Exchange Act of 1934 (“Exchange Act”), against Lawrence I. Rosen (“Rosen” or
“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 Respondent and the subject
matter of these proceedings, which are admitted, and except as provided herein in Section V,
Respondent consents to the entry of this Order Instituting Cease-and-Desist Proceedings
Pursuant to 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
1
that:
Summary
1. These proceedings arise out of violations of the beneficial ownership reporting
requirements of the federal securities laws.
2. Section 13(d) of the Exchange Act and the rules promulgated thereunder require any
person who directly or indirectly acquires beneficial ownership of more than 5% of a registered
class of equity security to file a statement with the Commission disclosing certain information and
to file certain updating amendments. Section 13(d) is a key provision that allows shareholders
and potential investors to evaluate changes in substantial shareholdings. See 113 Cong. Rec. 855
(1967). The duty to file is not dependent on any intention by the stockholder to gain control of
the company, but on a mechanical 5% ownership test.
3. Section 16(a) of the Exchange Act and the rules promulgated thereunder require
officers and directors of a company with a registered class of equity security, and any beneficial
owners of greater than 10% of such class, to file certain reports of securities holdings and
transactions. Section 16(a) was motivated by a belief that “the most potent weapon against the
abuse of inside information is full and prompt publicity” and by a desire “to give investors an idea
of the purchases and sales by insiders which may in turn indicate their private opinion as to
prospects of the company.” H.R. Rep. 73-1383, at 13, 24 (1934). Reflecting this informational
purpose, the obligation to file applies irrespective of profits or the filer’s reasons for engaging in the
transactions. The Sarbanes-Oxley Act of 2002 and Commission implementing regulations
accelerated the reporting deadline for most transactions to two business days and mandated that all
reports be filed electronically on EDGAR to facilitate rapid dissemination to the public.
4. While subject to these reporting requirements, Respondent violated Section 13(d) by
failing to timely file initial statements or required amendments with respect to Respondent’s
beneficial ownership of the registered class of common stock of JAKKS Pacific, Inc. (“JAKKS”),
Meet Group Inc. (“Meet Group”), FTE Networks, Inc. (“FTE”), FuelCell Energy Inc.
(“FuelCell ”), and Remark Holdings Inc. (“Remark”) and violated Section 16(a) on multiple
occasions by failing to timely file reports of holdings and transactions in JAKKS’ securities.
Respondent
5. Rosen, age 64, was subject at all relevant times to Section 13(d) of the Exchange Act
as an acquirer of greater than 5% beneficial ownership of registered classes of securities of JAKKS,
Meet Group, FTE, FuelCell , and Remark, and was subject at all relevant times to Section 16(a) of
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
the Exchange Act as a greater than 10% beneficial owner of the registered class of common stock of
JAKKS.
Issuers
6. JAKKS is a Delaware corporation with its principal place of business in Santa
Monica, California. JAKKS’s common stock is and has been at all relevant times registered with
the Commission under Section 12 of the Exchange Act and trades on the NASDAQ stock market
(ticker: JAKK). Rosen acquired beneficial ownership of more than 5% of JAKKS’s registered
class of common stock as of December 8, 2020, and acquired greater than 10% beneficial
ownership as of February 26, 2021.
7. Meet Group is a Delaware corporation with its principal place of business in
Pennsylvania. Meet Group’s common stock was at all relevant times registered with the
Commission under Section 12 of the Exchange Act and traded on the NASDAQ stock market
(ticker: MEET) until September 2020, when it ceased to trade after being acquired and
terminated its Section 12 registration. Rosen acquired beneficial ownership of more than 5% of
Meet Group’s registered class of common stock as of March 29, 2018 and remained a greater
than 5% beneficial owner until the September 2020 acquisition.
8. FTE is a Nevada corporation with its principal place of business in New York,
New York. FTE’s common stock was at all relevant times registered with the Commission under
Section 12 of the Exchange Act and traded on the NYSE stock market (ticker: FTNW) until it
was suspended from trading in December 2019 and de-listed in May 2020. Rosen acquired
beneficial ownership of more than 5% of FTE’s registered class of common stock as of February
8, 2019 and remained a greater than 5% beneficial owner until October 16, 2019.
9. FuelCell is a Delaware corporation with its principal place of business in
Danbury, Connecticut. FuelCell’s common stock is and has been at all relevant times registered
with the Commission under Section 12 of the Exchange Act and trades on the NASDAQ stock
market (ticker: FCEL). Rosen acquired beneficial ownership of more than 5% of FuelCell’s
registered class of common stock as of November 21, 2019. By December 31, 2020, Rosen
ceased to be a greater than 5% beneficial owner.
10. Remark is a Delaware corporation with its principal place of business in Las
Vegas, Nevada. Remark’s common stock is and has been at all relevant times registered with the
Commission under Section 12 of the Exchange Act and trades on the NASDAQ stock market
(ticker: MARK). Rosen acquired beneficial ownership of more than 5% of Remark’s registered
class of common stock as of June 19, 2018 and remains a greater than 5% beneficial owner.
Applicable Legal Framework
11. Under Section 13(d)(1) of the Exchange Act, any person, including a group, who has
acquired beneficial ownership of more than 5% of any class of equity security registered under
Section 12 of the Exchange Act must publicly file, within 10 days after the acquisition, a disclosure
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statement with the Commission. Rule 13d-1(a) requires the statement to contain the information
specified by Schedule 13D, which includes, among other things, the identity of the beneficial
owners, the amount of beneficial ownership, and plans or proposals regarding the issuer.
12. Section 13(d)(2) of the Exchange Act and Rule 13d-2(a) thereunder require a filer to
amend a Schedule 13D promptly as material changes occur in disclosures previously made,
including but not limited to, any material increase or decrease in the percentage of the class
beneficially owned. An acquisition or disposition of beneficial ownership of securities in an amount
equal to 1% or more of the class of securities is deemed material for purposes of Rule 13d-2. Any
delay in filing beyond the date the filing reasonably can be made may not be prompt.
2
13. As an alternative to filing on Schedule 13D, certain statutory provisions and rules
allow the use of short-form disclosure statements on Schedule 13G with differing timing
requirements under certain conditions. Rule 13d-1(c) provides that, in lieu of filing a Schedule 13D,
a person may file a short-form statement on Schedule 13G within 10 days after the triggering
acquisition if the person “has not acquired the securities with any purpose, or with the effect of,
changing or influencing the control of the issuer, or in connection with or as a participant in any
transaction having that purpose or effect,” and is not directly or indirectly the beneficial owner of
20% or more of the class of securities (a “Passive Investor 13G Filer”). Under Rule 13d-1(f)(1), a
Passive Investor 13G Filer must file a Schedule 13D within 10 days after beneficial ownership first
equals or exceeds 20 percent of the class and is prohibited from voting or acquiring additional
securities of the class until 10 days after the Schedule 13D is filed.
14. Passive Investor 13G Filers are required, under Exchange Act Rule 13d-2(b), to file
an annual amendment within 45 days after the end of each calendar year if there are any changes in
the information reported in the previous filing on that Schedule, unless certain limited exceptions
apply. In addition to annual amendments, under Exchange Act Rule 13d-2(d), a Passive Investor
13G Filer must also amend the Schedule 13G promptly upon acquiring beneficial ownership of
greater than 10% of a registered class of equity securities and must thereafter promptly amend the
Schedule 13G upon increasing or decreasing its beneficial ownership by more than 5% of the class.
15. Under Section 13(d) of the Exchange Act and the application of Rule 13d-3, a
beneficial owner of a security includes “any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise” has or shares voting or
investment power with respect to such security. More than one person may be a beneficial
owner of the same securities.
16. Section 16(a) of the Exchange Act and the rules promulgated thereunder apply to
every person who is the beneficial owner of more than 10% of any class of equity security
registered pursuant to Section 12 of the Exchange Act, and any officer or director of the issuer of
any such security (collectively, “insiders”). For purposes of determining status as a greater than
2
Amendments to Beneficial Ownership Reporting Requirements, SEC Release No. 34-39538 (Jan. 12,
1998), 63 Fed. Reg. 2854, 2855 n.14 (Jan. 16, 1998).
5
10% beneficial owner under Section 16(a), the term means any person who is deemed a beneficial
owner under Section 13(d) of the Exchange Act and the rules thereunder, subject to limited
exceptions.
17. Pursuant to Section 16(a) and Rule 16a-3, insiders are required to file initial
statements of holdings on Form 3 and keep this information current by reporting transactions on
Forms 4 and 5. Specifically, within 10 days after becoming an insider, or on or before the effective
date of the Section 12 registration of the class of equity security, an insider must file a Form 3 report
disclosing all securities of the issuer in which the insider has or is deemed to have a direct or
indirect pecuniary interest. To keep this information current, insiders must file Form 4 reports
disclosing transactions resulting in a change in beneficial ownership within two business days
following the execution date of the transaction, except for limited types of transactions eligible for
deferred reporting. Transactions required to be reported on Form 4 include purchases and sales of
securities, exercises and conversions of derivative securities, and grants or awards of securities from
the issuer. In addition, insiders are required to file a Form 5 report within 45 days after the issuer’s
fiscal year-end to report any transactions or holdings that should have been, but were not, reported
on Form 3 or 4 (as applicable) during the issuer’s most recent fiscal year and any transactions
eligible for deferred reporting (unless the insider has previously reported all such transactions).
18. There is no state of mind requirement for violations of Section 16(a) and 13(d)
and the rules thereunder.
3
The failure to timely file a required report, even if inadvertent,
constitutes a violation.
4
Respondent Failed to File Required Section 16(a) Reports on a Timely Basis
19. As a greater than 10% beneficial owner of JAKKS since February 26, 2021,
Respondent has been subject to the reporting requirements of Exchange Act Section 16(a) and
remains subject to those requirements.
3
See, e.g., SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1167 (D.C. Cir. 1978) (“Indeed, the plain language of
section 13(d)(1) gives no hint that intentional conduct need be found, but rather, appears to place a simple and
affirmative duty of reporting on certain persons. The legislative history confirms that Congress was concerned with
providing disclosure to investors, and not merely with protecting them from fraudulent conduct”); SEC v. e-Smart
Technologies, Inc., 82 F. Supp. 3d 97, 104 (D.D.C. 2015) (scienter is not required to establish a violation of Section
16(a) of the Exchange Act)..
4
Cf. Oppenheimer & Co., Inc., 47 SEC 286, 1980 WL 26901, at *2 (May 19, 1980) (Commission opinion)
(“We have previously held that the failure to make a required report, even though inadvertent, constitutes a willful
violation”); see generally Herbert Moskowitz, 77 SEC Docket 446, 2002 WL 434524, at *7 (Mar. 21, 2002)
(Commission opinion) (“evidence of both motive for non-disclosure and actual market impact ... is irrelevant” to
whether violations of Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder occurred); Mandated
Electronic Filing and Website Posting for Forms 3, 4 and 5, SEC Release No. 34-47809 (May 7, 2003), 68 Fed. Reg.
25788, 25792 (May 13, 2003) (noting that an issuer’s eligibility for temporary relief from disclosing Forms 4 filed one
business day late by its insiders “does not change the fact that any Form 3, 4 or 5 filed later than the applicable due date
violates Section 16(a)”) (emphasis added).
6
20. Although Respondent filed a Schedule 13G amendment on March 3, 2021 with
respect to JAKKS reporting his beneficial ownership percentage as 10.6%, Respondent did not
begin to file any Section 16(a) reports until February 16, 2022—almost one year after he had
become required to do so. On February 16, 2022, Respondent filed an untimely Form 3 that
incorrectly identified October 2, 2021 as the date on which he became a greater than 10%
beneficial owner, and filed untimely Forms 4 as to his open-market purchases of JAKKS’
common stock on numerous dates between October 25, 2021 and February 10, 2022. It was not
until January 26, 2023 that Respondent filed Forms 4 to report his numerous prior purchases
between March 8, 2021 and October 8, 2021. In addition, after Respondent filed the initial Form
3 and Forms 4 on February 16, 2022, Respondent also failed to file on a timely basis for sale
transactions in May and June 2022, which were also not reported on a Form 4 until January 26,
2023. Respondent’s late reports include transactions executed on the following dates that were
required to be reported on Form 4 within two business days:
Form Type Date of Trans. Due Date Date Filed
4 3/8/2021 3/10/2021 1/26/2023
4 3/10/2021 3/12/2021 1/26/2023
4 3/12/2021 3/16/2021 1/26/2023
4 3/17/2021 3/19/2021 1/26/2023
4 3/19/2021 3/23/2021 1/26/2023
4 3/24/2021 3/26/2021 1/26/2023
4 3/25/2021 3/29/2021 1/26/2023
4 4/8/2021 4/12/2021 1/26/2023
4 6/9/2021 6/11/2021 1/26/2023
4 6/11/2021 6/15/2021 1/26/2023
4 6/14/2021 6/16/2021 1/26/2023
4 6/15/2021 6/17/2021 1/26/2023
4 6/16/2021 6/18/2021 1/26/2023
4 6/17/2021 6/21/2021 1/26/2023
4 6/18/2021 6/22/2021 1/26/2023
4 6/24/2021 6/28/2021 1/26/2023
4 6/28/2021 6/30/2021 1/26/2023
4 7/6/2021 7/8/2021 1/26/2023
4 7/7/2021 7/9/2021 1/26/2023
7
Form Type Date of Trans. Due Date Date Filed
4 7/8/2021 7/12/2021 1/26/2023
4 7/9/2021 7/13/2021 1/26/2023
4 7/12/2021 7/14/2021 1/26/2023
4 7/15/2021 7/19/2021 1/26/2023
4 8/5/2021 8/9/2021 1/26/2023
4 8/6/2021 8/10/2021 1/26/2023
4 10/8/2021 10/13/2021 1/26/2023
4 10/25/2021 10/27/2021 2/16/2022
4 10/27/2021 10/29/2021 2/16/2022
4 10/28/2021 11/1/2021 2/16/2022
4 10/29/2021 11/2/2021 2/16/2022
4 11/4/2021 11/8/2021 2/16/2022
4 11/11/2021 11/15/2021 2/16/2022
4 11/12/2021 11/16/2021 2/16/2022
4 11/15/2021 11/17/2021 2/16/2022
4 11/16/2021 11/18/2021 2/16/2022
4 11/18/2021 11/22/2021 2/16/2022
4 11/19/2021 11/23/2021 2/16/2022
4 11/22/2021 11/24/2021 2/16/2022
4 11/26/2021 11/30/2021 2/16/2022
4 12/7/2021 12/9/2021 2/16/2022
4 12/8/2021 12/10/2021 2/16/2022
4 12/9/2021 12/13/2021 2/16/2022
4 12/10/2021 12/14/2021 2/16/2022
4 12/13/2021 12/15/2021 2/16/2022
4 12/14/2021 12/16/2021 2/16/2022
4 12/15/2021 12/17/2021 2/16/2022
4 12/21/2021 12/23/2021 2/16/2022
4 12/22/2021 12/27/2021 2/16/2022
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Form Type Date of Trans. Due Date Date Filed
4 12/23/2021 12/28/2021 2/16/2022
4 12/30/2021 1/4/2022 2/16/2022
4 1/7/2022 1/11/2022 2/16/2022
4 1/26/2022 1/28/2022 2/16/2022
4 1/28/2022 2/1/2022 2/16/2022
4 1/31/2022 2/2/2022 2/16/2022
4 2/1/2022 2/3/2022 2/16/2022
4 2/2/2022 2/4/2022 2/16/2022
4 2/3/2022 2/7/2022 2/16/2022
4 2/4/2022 2/8/2022 2/16/2022
4 2/7/2022 2/9/2022 2/16/2022
4 2/8/2022 2/10/2022 2/16/2022
4 2/9/2022 2/11/2022 2/16/2022
4 2/10/2022 2/12/2022 2/16/2022
5 5/9/2022 5/11/2022 1/26/2023
5 5/10/2022 5/12/2022 1/26/2023
5 6/17/2022 6/21/2022 1/26/2023
21. Respondent’s late-reported transactions included open-market purchases of JAKKS
common stock from March 8, 2021 to February 10, 2022 with an aggregate market value of
approximately $13 million as well as sales of JAKKS stock on three dates in May and June 2022.
Respondent also failed to timely file a required Form 5 to report transactions that should have
been reported on Forms 4 during JAKKS’s fiscal year 2021 but were not.
22. As a result of the conduct described above, Respondent violated Section 16(a) of
the Exchange Act and Rule 16a-3 thereunder.
Respondent Failed to Timely File on Schedule 13G and 13D
23. Respondent has been subject to the reporting requirements of Exchange Act
Section 13(d) since acquiring beneficial ownership of more than 5% of the class of registered
common stock of JAKKS as of December 8, 2020, and remains subject to those requirements.
Respondent was required to file a Schedule 13D within 10 days, or in lieu thereof, file a
Schedule 13G within 10 days if eligible under Rule 13d-1(c) as a Passive Investor 13G Filer.
9
Respondent’s filing of an initial Schedule 13G statement on February 22, 2021 did not comply
with the applicable 10-day filing deadline.
24. With respect to his beneficial ownership of JAKKS common stock, Respondent
also failed to make timely and accurately filings required of persons relying on Rule 13d-1(c) as
Passive Investor 13G Filers, including:
• As of July 12, 2021, Respondent’s beneficial ownership had increased to more
than 15%, an increase of more than 5% of the class of securities from the amount
set forth previously, which information was only partially reflected in an
amendment filed February 3, 2022, and was not accurately reflected in an
amendment until January 26, 2023—neither of which were prompt; and
• Between at least April 11, 2022 and May 9, 2022, Respondent was ineligible to
file on Schedule 13G because Respondent’s beneficial ownership exceeded 20%.
As a result, Respondent was required under Rule 13d-1(f) to, among other things,
file a Schedule 13D within 10 days of the date on which Respondent’s beneficial
ownership equaled or exceeded 20%. Respondent failed to file a Schedule 13D
until January 26, 2023.
25. Respondent also failed to timely file initial statements pursuant to Exchange Act
Section 13(d) and Rule 13d-1 thereunder as required after acquiring beneficial ownership of
more than 5% of the outstanding class of common stock of Meet Group, FTE, FuelCell, and
Remark. Respondent was required to file a Schedule 13D within 10 days after the date he
acquired greater than 5% beneficial ownership with respect to each of these issuers, or in lieu
thereof, file a Schedule 13G within 10 days of such triggering acquisition if eligible under Rule
13d-1(c) as a Passive Investor 13G Filer.
26. Respondent became subject to the reporting requirements of Exchange Act
Section 13(d) with respect to Meet Group after acquiring beneficial ownership of more than 5%
of Meet Group’s common stock as of March 29, 2018. Respondent’s filing of an initial Schedule
13G statement on November 16, 2018, did not comply with the applicable 10-day filing
deadline.
27. Respondent became subject to the reporting requirements of Exchange Act
Section 13(d) with respect to FTE after acquiring beneficial ownership of more than 5% of
FTE’s common stock as of February 8, 2019. Respondent’s filing of an initial Schedule 13G
statement on March 1, 2019, did not comply with the applicable 10-day filing deadline.
28. Respondent became subject to the reporting requirements of Exchange Act
Section 13(d) with respect to FuelCell after acquiring beneficial ownership of more than 5% of
FuelCell’s common stock as of November 21, 2019. Respondent’s filing of an initial Schedule
13G statement on February 10, 2020, did not comply with the applicable 10-day filing deadline.
10
29. Respondent became subject to the reporting requirements of Exchange Act
Section 13(d) with respect to Remark after acquiring beneficial ownership of more than 5% of
Remark’s common stock as of June 19, 2018. Respondent’s filing of an initial Schedule 13G
statement on July 31, 2019, did not comply with the applicable 10-day filing deadline.
30. As a result of the conduct described above, Respondent violated Section 13(d) of
the Exchange Act and Rules 13d-1 and 13d-2 thereunder.
Respondent’s Remedial Efforts
31. In determining to accept Respondent’s Offer, the Commission considered certain
remedial acts undertaken by Respondent and cooperation afforded to Commission staff.
IV.
In view of the foregoing, the Commission deems it appropriate to impose the sanctions
agreed to in Respondent’s Offer.
Accordingly, it is hereby ORDERED that:
A. Pursuant to Section 21C of the Exchange Act, Respondent cease and desist from
committing or causing any violations and any future violations of Sections 13(d) and 16(a) of the
Exchange Act and Rules 13d-1, 13d-2 and 16a-3 promulgated thereunder.
B. Respondent shall, within 14 days of the entry of this Order, pay a civil money
penalty in the amount of $150,000 to the Securities and Exchange Commission, for transfer to
the general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If
timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.
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
11
Payments by check or money order must be accompanied by a cover letter identifying
Lawrence I. Rosen 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 Thomas Smith,
Associate Regional Director, Division of Enforcement, Securities and Exchange Commission,
100 Pearl Street, Suite 20-100, New York, NY 10004.
C. 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, he shall not argue that he is entitled to, nor shall he 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 he 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 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.
V.
It is further Ordered that, solely for purposes of exceptions to discharge set forth in
Section 523 of the Bankruptcy Code, 11 U.S.C. § 523, the findings in this Order are true and
admitted by Respondent, and further, any debt for disgorgement, prejudgment interest, civil
penalty or other amounts due by Respondent under this Order or any other judgment, order,
consent order, decree or settlement agreement entered in connection with this proceeding, is a
debt for the violation by Respondent of the federal securities laws or any regulation or order
issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C.
§ 523(a)(19).
By the Commission.
Vanessa A. Countryman
Secretary OCR text (27,003c · tika · 95% conf)
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 98545 / September 27, 2023
ADMINISTRATIVE PROCEEDING
File No. 3-21730
In the Matter of
Lawrence I. Rosen,
Respondent.
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO
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 21C of the
Securities Exchange Act of 1934 (“Exchange Act”), against Lawrence I. Rosen (“Rosen” or
“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 Respondent and the subject
matter of these proceedings, which are admitted, and except as provided herein in Section V,
Respondent consents to the entry of this Order Instituting Cease-and-Desist Proceedings
Pursuant to 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. These proceedings arise out of violations of the beneficial ownership reporting
requirements of the federal securities laws.
2. Section 13(d) of the Exchange Act and the rules promulgated thereunder require any
person who directly or indirectly acquires beneficial ownership of more than 5% of a registered
class of equity security to file a statement with the Commission disclosing certain information and
to file certain updating amendments. Section 13(d) is a key provision that allows shareholders
and potential investors to evaluate changes in substantial shareholdings. See 113 Cong. Rec. 855
(1967). The duty to file is not dependent on any intention by the stockholder to gain control of
the company, but on a mechanical 5% ownership test.
3. Section 16(a) of the Exchange Act and the rules promulgated thereunder require
officers and directors of a company with a registered class of equity security, and any beneficial
owners of greater than 10% of such class, to file certain reports of securities holdings and
transactions. Section 16(a) was motivated by a belief that “the most potent weapon against the
abuse of inside information is full and prompt publicity” and by a desire “to give investors an idea
of the purchases and sales by insiders which may in turn indicate their private opinion as to
prospects of the company.” H.R. Rep. 73-1383, at 13, 24 (1934). Reflecting this informational
purpose, the obligation to file applies irrespective of profits or the filer’s reasons for engaging in the
transactions. The Sarbanes-Oxley Act of 2002 and Commission implementing regulations
accelerated the reporting deadline for most transactions to two business days and mandated that all
reports be filed electronically on EDGAR to facilitate rapid dissemination to the public.
4. While subject to these reporting requirements, Respondent violated Section 13(d) by
failing to timely file initial statements or required amendments with respect to Respondent’s
beneficial ownership of the registered class of common stock of JAKKS Pacific, Inc. (“JAKKS”),
Meet Group Inc. (“Meet Group”), FTE Networks, Inc. (“FTE”), FuelCell Energy Inc.
(“FuelCell”), and Remark Holdings Inc. (“Remark”) and violated Section 16(a) on multiple
occasions by failing to timely file reports of holdings and transactions in JAKKS’ securities.
Respondent
5. Rosen, age 64, was subject at all relevant times to Section 13(d) of the Exchange Act
as an acquirer of greater than 5% beneficial ownership of registered classes of securities of JAKKS,
Meet Group, FTE, FuelCell, and Remark, and was subject at all relevant times to Section 16(a) of
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
the Exchange Act as a greater than 10% beneficial owner of the registered class of common stock of
JAKKS.
Issuers
6. JAKKS is a Delaware corporation with its principal place of business in Santa
Monica, California. JAKKS’s common stock is and has been at all relevant times registered with
the Commission under Section 12 of the Exchange Act and trades on the NASDAQ stock market
(ticker: JAKK). Rosen acquired beneficial ownership of more than 5% of JAKKS’s registered
class of common stock as of December 8, 2020, and acquired greater than 10% beneficial
ownership as of February 26, 2021.
7. Meet Group is a Delaware corporation with its principal place of business in
Pennsylvania. Meet Group’s common stock was at all relevant times registered with the
Commission under Section 12 of the Exchange Act and traded on the NASDAQ stock market
(ticker: MEET) until September 2020, when it ceased to trade after being acquired and
terminated its Section 12 registration. Rosen acquired beneficial ownership of more than 5% of
Meet Group’s registered class of common stock as of March 29, 2018 and remained a greater
than 5% beneficial owner until the September 2020 acquisition.
8. FTE is a Nevada corporation with its principal place of business in New York,
New York. FTE’s common stock was at all relevant times registered with the Commission under
Section 12 of the Exchange Act and traded on the NYSE stock market (ticker: FTNW) until it
was suspended from trading in December 2019 and de-listed in May 2020. Rosen acquired
beneficial ownership of more than 5% of FTE’s registered class of common stock as of February
8, 2019 and remained a greater than 5% beneficial owner until October 16, 2019.
9. FuelCell is a Delaware corporation with its principal place of business in
Danbury, Connecticut. FuelCell’s common stock is and has been at all relevant times registered
with the Commission under Section 12 of the Exchange Act and trades on the NASDAQ stock
market (ticker: FCEL). Rosen acquired beneficial ownership of more than 5% of FuelCell’s
registered class of common stock as of November 21, 2019. By December 31, 2020, Rosen
ceased to be a greater than 5% beneficial owner.
10. Remark is a Delaware corporation with its principal place of business in Las
Vegas, Nevada. Remark’s common stock is and has been at all relevant times registered with the
Commission under Section 12 of the Exchange Act and trades on the NASDAQ stock market
(ticker: MARK). Rosen acquired beneficial ownership of more than 5% of Remark’s registered
class of common stock as of June 19, 2018 and remains a greater than 5% beneficial owner.
Applicable Legal Framework
11. Under Section 13(d)(1) of the Exchange Act, any person, including a group, who has
acquired beneficial ownership of more than 5% of any class of equity security registered under
Section 12 of the Exchange Act must publicly file, within 10 days after the acquisition, a disclosure
4
statement with the Commission. Rule 13d-1(a) requires the statement to contain the information
specified by Schedule 13D, which includes, among other things, the identity of the beneficial
owners, the amount of beneficial ownership, and plans or proposals regarding the issuer.
12. Section 13(d)(2) of the Exchange Act and Rule 13d-2(a) thereunder require a filer to
amend a Schedule 13D promptly as material changes occur in disclosures previously made,
including but not limited to, any material increase or decrease in the percentage of the class
beneficially owned. An acquisition or disposition of beneficial ownership of securities in an amount
equal to 1% or more of the class of securities is deemed material for purposes of Rule 13d-2. Any
delay in filing beyond the date the filing reasonably can be made may not be prompt.2
13. As an alternative to filing on Schedule 13D, certain statutory provisions and rules
allow the use of short-form disclosure statements on Schedule 13G with differing timing
requirements under certain conditions. Rule 13d-1(c) provides that, in lieu of filing a Schedule 13D,
a person may file a short-form statement on Schedule 13G within 10 days after the triggering
acquisition if the person “has not acquired the securities with any purpose, or with the effect of,
changing or influencing the control of the issuer, or in connection with or as a participant in any
transaction having that purpose or effect,” and is not directly or indirectly the beneficial owner of
20% or more of the class of securities (a “Passive Investor 13G Filer”). Under Rule 13d-1(f)(1), a
Passive Investor 13G Filer must file a Schedule 13D within 10 days after beneficial ownership first
equals or exceeds 20 percent of the class and is prohibited from voting or acquiring additional
securities of the class until 10 days after the Schedule 13D is filed.
14. Passive Investor 13G Filers are required, under Exchange Act Rule 13d-2(b), to file
an annual amendment within 45 days after the end of each calendar year if there are any changes in
the information reported in the previous filing on that Schedule, unless certain limited exceptions
apply. In addition to annual amendments, under Exchange Act Rule 13d-2(d), a Passive Investor
13G Filer must also amend the Schedule 13G promptly upon acquiring beneficial ownership of
greater than 10% of a registered class of equity securities and must thereafter promptly amend the
Schedule 13G upon increasing or decreasing its beneficial ownership by more than 5% of the class.
15. Under Section 13(d) of the Exchange Act and the application of Rule 13d-3, a
beneficial owner of a security includes “any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise” has or shares voting or
investment power with respect to such security. More than one person may be a beneficial
owner of the same securities.
16. Section 16(a) of the Exchange Act and the rules promulgated thereunder apply to
every person who is the beneficial owner of more than 10% of any class of equity security
registered pursuant to Section 12 of the Exchange Act, and any officer or director of the issuer of
any such security (collectively, “insiders”). For purposes of determining status as a greater than
2 Amendments to Beneficial Ownership Reporting Requirements, SEC Release No. 34-39538 (Jan. 12,
1998), 63 Fed. Reg. 2854, 2855 n.14 (Jan. 16, 1998).
5
10% beneficial owner under Section 16(a), the term means any person who is deemed a beneficial
owner under Section 13(d) of the Exchange Act and the rules thereunder, subject to limited
exceptions.
17. Pursuant to Section 16(a) and Rule 16a-3, insiders are required to file initial
statements of holdings on Form 3 and keep this information current by reporting transactions on
Forms 4 and 5. Specifically, within 10 days after becoming an insider, or on or before the effective
date of the Section 12 registration of the class of equity security, an insider must file a Form 3 report
disclosing all securities of the issuer in which the insider has or is deemed to have a direct or
indirect pecuniary interest. To keep this information current, insiders must file Form 4 reports
disclosing transactions resulting in a change in beneficial ownership within two business days
following the execution date of the transaction, except for limited types of transactions eligible for
deferred reporting. Transactions required to be reported on Form 4 include purchases and sales of
securities, exercises and conversions of derivative securities, and grants or awards of securities from
the issuer. In addition, insiders are required to file a Form 5 report within 45 days after the issuer’s
fiscal year-end to report any transactions or holdings that should have been, but were not, reported
on Form 3 or 4 (as applicable) during the issuer’s most recent fiscal year and any transactions
eligible for deferred reporting (unless the insider has previously reported all such transactions).
18. There is no state of mind requirement for violations of Section 16(a) and 13(d)
and the rules thereunder.3 The failure to timely file a required report, even if inadvertent,
constitutes a violation.4
Respondent Failed to File Required Section 16(a) Reports on a Timely Basis
19. As a greater than 10% beneficial owner of JAKKS since February 26, 2021,
Respondent has been subject to the reporting requirements of Exchange Act Section 16(a) and
remains subject to those requirements.
3 See, e.g., SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1167 (D.C. Cir. 1978) (“Indeed, the plain language of
section 13(d)(1) gives no hint that intentional conduct need be found, but rather, appears to place a simple and
affirmative duty of reporting on certain persons. The legislative history confirms that Congress was concerned with
providing disclosure to investors, and not merely with protecting them from fraudulent conduct”); SEC v. e-Smart
Technologies, Inc., 82 F. Supp. 3d 97, 104 (D.D.C. 2015) (scienter is not required to establish a violation of Section
16(a) of the Exchange Act)..
4 Cf. Oppenheimer & Co., Inc., 47 SEC 286, 1980 WL 26901, at *2 (May 19, 1980) (Commission opinion)
(“We have previously held that the failure to make a required report, even though inadvertent, constitutes a willful
violation”); see generally Herbert Moskowitz, 77 SEC Docket 446, 2002 WL 434524, at *7 (Mar. 21, 2002)
(Commission opinion) (“evidence of both motive for non-disclosure and actual market impact … is irrelevant” to
whether violations of Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder occurred); Mandated
Electronic Filing and Website Posting for Forms 3, 4 and 5, SEC Release No. 34-47809 (May 7, 2003), 68 Fed. Reg.
25788, 25792 (May 13, 2003) (noting that an issuer’s eligibility for temporary relief from disclosing Forms 4 filed one
business day late by its insiders “does not change the fact that any Form 3, 4 or 5 filed later than the applicable due date
violates Section 16(a)”) (emphasis added).
6
20. Although Respondent filed a Schedule 13G amendment on March 3, 2021 with
respect to JAKKS reporting his beneficial ownership percentage as 10.6%, Respondent did not
begin to file any Section 16(a) reports until February 16, 2022—almost one year after he had
become required to do so. On February 16, 2022, Respondent filed an untimely Form 3 that
incorrectly identified October 2, 2021 as the date on which he became a greater than 10%
beneficial owner, and filed untimely Forms 4 as to his open-market purchases of JAKKS’
common stock on numerous dates between October 25, 2021 and February 10, 2022. It was not
until January 26, 2023 that Respondent filed Forms 4 to report his numerous prior purchases
between March 8, 2021 and October 8, 2021. In addition, after Respondent filed the initial Form
3 and Forms 4 on February 16, 2022, Respondent also failed to file on a timely basis for sale
transactions in May and June 2022, which were also not reported on a Form 4 until January 26,
2023. Respondent’s late reports include transactions executed on the following dates that were
required to be reported on Form 4 within two business days:
Form Type Date of Trans. Due Date Date Filed
4 3/8/2021 3/10/2021 1/26/2023
4 3/10/2021 3/12/2021 1/26/2023
4 3/12/2021 3/16/2021 1/26/2023
4 3/17/2021 3/19/2021 1/26/2023
4 3/19/2021 3/23/2021 1/26/2023
4 3/24/2021 3/26/2021 1/26/2023
4 3/25/2021 3/29/2021 1/26/2023
4 4/8/2021 4/12/2021 1/26/2023
4 6/9/2021 6/11/2021 1/26/2023
4 6/11/2021 6/15/2021 1/26/2023
4 6/14/2021 6/16/2021 1/26/2023
4 6/15/2021 6/17/2021 1/26/2023
4 6/16/2021 6/18/2021 1/26/2023
4 6/17/2021 6/21/2021 1/26/2023
4 6/18/2021 6/22/2021 1/26/2023
4 6/24/2021 6/28/2021 1/26/2023
4 6/28/2021 6/30/2021 1/26/2023
4 7/6/2021 7/8/2021 1/26/2023
4 7/7/2021 7/9/2021 1/26/2023
7
Form Type Date of Trans. Due Date Date Filed
4 7/8/2021 7/12/2021 1/26/2023
4 7/9/2021 7/13/2021 1/26/2023
4 7/12/2021 7/14/2021 1/26/2023
4 7/15/2021 7/19/2021 1/26/2023
4 8/5/2021 8/9/2021 1/26/2023
4 8/6/2021 8/10/2021 1/26/2023
4 10/8/2021 10/13/2021 1/26/2023
4 10/25/2021 10/27/2021 2/16/2022
4 10/27/2021 10/29/2021 2/16/2022
4 10/28/2021 11/1/2021 2/16/2022
4 10/29/2021 11/2/2021 2/16/2022
4 11/4/2021 11/8/2021 2/16/2022
4 11/11/2021 11/15/2021 2/16/2022
4 11/12/2021 11/16/2021 2/16/2022
4 11/15/2021 11/17/2021 2/16/2022
4 11/16/2021 11/18/2021 2/16/2022
4 11/18/2021 11/22/2021 2/16/2022
4 11/19/2021 11/23/2021 2/16/2022
4 11/22/2021 11/24/2021 2/16/2022
4 11/26/2021 11/30/2021 2/16/2022
4 12/7/2021 12/9/2021 2/16/2022
4 12/8/2021 12/10/2021 2/16/2022
4 12/9/2021 12/13/2021 2/16/2022
4 12/10/2021 12/14/2021 2/16/2022
4 12/13/2021 12/15/2021 2/16/2022
4 12/14/2021 12/16/2021 2/16/2022
4 12/15/2021 12/17/2021 2/16/2022
4 12/21/2021 12/23/2021 2/16/2022
4 12/22/2021 12/27/2021 2/16/2022
8
Form Type Date of Trans. Due Date Date Filed
4 12/23/2021 12/28/2021 2/16/2022
4 12/30/2021 1/4/2022 2/16/2022
4 1/7/2022 1/11/2022 2/16/2022
4 1/26/2022 1/28/2022 2/16/2022
4 1/28/2022 2/1/2022 2/16/2022
4 1/31/2022 2/2/2022 2/16/2022
4 2/1/2022 2/3/2022 2/16/2022
4 2/2/2022 2/4/2022 2/16/2022
4 2/3/2022 2/7/2022 2/16/2022
4 2/4/2022 2/8/2022 2/16/2022
4 2/7/2022 2/9/2022 2/16/2022
4 2/8/2022 2/10/2022 2/16/2022
4 2/9/2022 2/11/2022 2/16/2022
4 2/10/2022 2/12/2022 2/16/2022
5 5/9/2022 5/11/2022 1/26/2023
5 5/10/2022 5/12/2022 1/26/2023
5 6/17/2022 6/21/2022 1/26/2023
21. Respondent’s late-reported transactions included open-market purchases of JAKKS
common stock from March 8, 2021 to February 10, 2022 with an aggregate market value of
approximately $13 million as well as sales of JAKKS stock on three dates in May and June 2022.
Respondent also failed to timely file a required Form 5 to report transactions that should have
been reported on Forms 4 during JAKKS’s fiscal year 2021 but were not.
22. As a result of the conduct described above, Respondent violated Section 16(a) of
the Exchange Act and Rule 16a-3 thereunder.
Respondent Failed to Timely File on Schedule 13G and 13D
23. Respondent has been subject to the reporting requirements of Exchange Act
Section 13(d) since acquiring beneficial ownership of more than 5% of the class of registered
common stock of JAKKS as of December 8, 2020, and remains subject to those requirements.
Respondent was required to file a Schedule 13D within 10 days, or in lieu thereof, file a
Schedule 13G within 10 days if eligible under Rule 13d-1(c) as a Passive Investor 13G Filer.
9
Respondent’s filing of an initial Schedule 13G statement on February 22, 2021 did not comply
with the applicable 10-day filing deadline.
24. With respect to his beneficial ownership of JAKKS common stock, Respondent
also failed to make timely and accurately filings required of persons relying on Rule 13d-1(c) as
Passive Investor 13G Filers, including:
• As of July 12, 2021, Respondent’s beneficial ownership had increased to more
than 15%, an increase of more than 5% of the class of securities from the amount
set forth previously, which information was only partially reflected in an
amendment filed February 3, 2022, and was not accurately reflected in an
amendment until January 26, 2023—neither of which were prompt; and
• Between at least April 11, 2022 and May 9, 2022, Respondent was ineligible to
file on Schedule 13G because Respondent’s beneficial ownership exceeded 20%.
As a result, Respondent was required under Rule 13d-1(f) to, among other things,
file a Schedule 13D within 10 days of the date on which Respondent’s beneficial
ownership equaled or exceeded 20%. Respondent failed to file a Schedule 13D
until January 26, 2023.
25. Respondent also failed to timely file initial statements pursuant to Exchange Act
Section 13(d) and Rule 13d-1 thereunder as required after acquiring beneficial ownership of
more than 5% of the outstanding class of common stock of Meet Group, FTE, FuelCell, and
Remark. Respondent was required to file a Schedule 13D within 10 days after the date he
acquired greater than 5% beneficial ownership with respect to each of these issuers, or in lieu
thereof, file a Schedule 13G within 10 days of such triggering acquisition if eligible under Rule
13d-1(c) as a Passive Investor 13G Filer.
26. Respondent became subject to the reporting requirements of Exchange Act
Section 13(d) with respect to Meet Group after acquiring beneficial ownership of more than 5%
of Meet Group’s common stock as of March 29, 2018. Respondent’s filing of an initial Schedule
13G statement on November 16, 2018, did not comply with the applicable 10-day filing
deadline.
27. Respondent became subject to the reporting requirements of Exchange Act
Section 13(d) with respect to FTE after acquiring beneficial ownership of more than 5% of
FTE’s common stock as of February 8, 2019. Respondent’s filing of an initial Schedule 13G
statement on March 1, 2019, did not comply with the applicable 10-day filing deadline.
28. Respondent became subject to the reporting requirements of Exchange Act
Section 13(d) with respect to FuelCell after acquiring beneficial ownership of more than 5% of
FuelCell’s common stock as of November 21, 2019. Respondent’s filing of an initial Schedule
13G statement on February 10, 2020, did not comply with the applicable 10-day filing deadline.
10
29. Respondent became subject to the reporting requirements of Exchange Act
Section 13(d) with respect to Remark after acquiring beneficial ownership of more than 5% of
Remark’s common stock as of June 19, 2018. Respondent’s filing of an initial Schedule 13G
statement on July 31, 2019, did not comply with the applicable 10-day filing deadline.
30. As a result of the conduct described above, Respondent violated Section 13(d) of
the Exchange Act and Rules 13d-1 and 13d-2 thereunder.
Respondent’s Remedial Efforts
31. In determining to accept Respondent’s Offer, the Commission considered certain
remedial acts undertaken by Respondent and cooperation afforded to Commission staff.
IV.
In view of the foregoing, the Commission deems it appropriate to impose the sanctions
agreed to in Respondent’s Offer.
Accordingly, it is hereby ORDERED that:
A. Pursuant to Section 21C of the Exchange Act, Respondent cease and desist from
committing or causing any violations and any future violations of Sections 13(d) and 16(a) of the
Exchange Act and Rules 13d-1, 13d-2 and 16a-3 promulgated thereunder.
B. Respondent shall, within 14 days of the entry of this Order, pay a civil money
penalty in the amount of $150,000 to the Securities and Exchange Commission, for transfer to
the general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If
timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.
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
11
Payments by check or money order must be accompanied by a cover letter identifying
Lawrence I. Rosen 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 Thomas Smith,
Associate Regional Director, Division of Enforcement, Securities and Exchange Commission,
100 Pearl Street, Suite 20-100, New York, NY 10004.
C. 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, he shall not argue that he is entitled to, nor shall he 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 he 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 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.
V.
It is further Ordered that, solely for purposes of exceptions to discharge set forth in
Section 523 of the Bankruptcy Code, 11 U.S.C. § 523, the findings in this Order are true and
admitted by Respondent, and further, any debt for disgorgement, prejudgment interest, civil
penalty or other amounts due by Respondent under this Order or any other judgment, order,
consent order, decree or settlement agreement entered in connection with this proceeding, is a
debt for the violation by Respondent of the federal securities laws or any regulation or order
issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C.
§ 523(a)(19).
By the Commission.
Vanessa A. Countryman
Secretary
Respondent