2022-10-21 sec-litreleases litigation_release 67 KB 3,347 chars

SEC v. Douglas Roe; Atlantean Management Corp.; Kelly Warawa; Shane Schmidt; and Nelson Gomes, No. LR-25563, District of Massachusetts (Oct. 21, 2022) — Press Release

raw: Gomes et al.

Gomes et al., No. 1:20-cv-11092 (Oct. 21, 2022)

Caption: Securities and Exchange Commission v. Roe

summary

The SEC obtained final judgments against Douglas Roe, Atlantean Management Corp., and Kelly Warawa for a $25 million microcap fraud scheme involving illegal stock dumping.

paragraph

The defendants were charged with violating the Securities Act of 1933 and the Exchange Act of 1934 through the fraudulent sale of Sandy Steele Unlimited, Inc. stock. Roe and Atlantean were ordered to pay significant disgorgement and civil penalties, including a $300,000 penalty for Atlantean and $248,435 for Roe. Warawa was ordered to pay $9,190 in disgorgement and a $9,190 civil penalty, alongside a five-year penny stock bar.

narrative

The SEC successfully obtained final judgments against Douglas Roe, his entity Atlantean Management Corp., and Kelly Warawa for a microcap fraud scheme that generated over $25 million. The defendants used secret entities and fraudulent promotional campaigns, which included false claims that Sandy Steele Unlimited, Inc. could produce medical-quality facemasks during the COVID-19 pandemic, to dump shares into the public market. To resolve the charges, the court ordered Roe to pay $248,435 in civil penalties and approximately $548,435 in disgorgement and interest, while Atlantean was ordered to pay a $300,000 penalty and joint and several disgorgement. Warawa was ordered to pay $9,190 in disgorgement and a $9,190 civil penalty, and was also hit with a five-year penny stock bar. The litigation also addressed defendant Shane Schmidt, who entered a partial judgment requiring him to pay disgorgement and interest. The defendants were enjoined from violating various provisions of the Securities Act of 1933 and the Exchange Act of 1934.

Enriched metadata

Scheme: pump-and-dump (95%)
Court: District of Massachusetts
Case No.: 1:20-cv-11092
Disgorgement: $545,974
Civil penalty: $300,000
Victim loss: $25,000,000
Entity: Atlantean Management Corp.

Classified pump-and-dump(confidence 95%). EDGAR detection: forms S-8/S-1/424B/8-K· recall 69% / precision 12%. detection rule →

Exhibits & Attached Documents (1)

pdf MEMORANDUM AND ORDER ON PLAINTIFF’S MOTION FOR CIVIL PENALTIES
211 KB 15,777 chars Source

Extracted insights

Dollar amounts 10

$25.00M $25 million $10M–$100M
$548K $548,435 $100K–$1M
$546K $545,974 $100K–$1M
$546K $545,974 $100K–$1M
$300K $300,000 $100K–$1M
$248K $248,435 $100K–$1M
$33K $32,971 $10K–$100K
$9K $9,190 <$10K
$9K $9,190 <$10K
$362 $362 <$10K

Entities 5

company a fraudulent scheme to dump securities of sandy steele unlimited, inc.
company five-year penny stock bar on kelly warawa and atlantean management corp.
person nelson gomes
person promotional campaigns
agency Securities and Exchange Commission

Triples 12

Securities And Exchange Commission obtained judgments against Douglas Roe, Atlantean Management Corp., and Kelly Warawa
Roe, Warawa, and Schmidt engaged in a fraudulent scheme to dump securities of Sandy Steele Unlimited, Inc.
Roe, Warawa, and Schmidt used Atlantean and other defendant entities to secretly hold shares of Sandy Steele
Nelson Gomes operated a fraudulent business that concealed identities while illegally dumping stock
Promotional campaigns included false and misleading information about Sandy Steele's ability to produce medical facemasks during COVID-19
Court ordered Roe to pay $248,435 civil penalty and $548,435 disgorgement plus $32,971 interest
Court ordered Atlantean Management Corp. to pay $300,000 civil penalty and $545,974 disgorgement plus interest
Court ordered Kelly Warawa to pay $9,190 disgorgement, $362 interest, and $9,190 civil penalty
Court imposed five-year penny stock bar on Kelly Warawa and Atlantean Management Corp.
Court entered partial judgment by consent against Shane Schmidt for disgorgement and interest
Securities And Exchange Commission filed complaint against 11 defendants including Roe, Warawa, Schmidt, and Gomes for microcap fraud
Roe, Atlantean, and Warawa consented to final judgments enjoining violations of Securities Act and Exchange Act provisions

PDF (from attached: pdf)

MEMORANDUM AND ORDER ON PLAINTIFF’S MOTION FOR CIVIL PENALTIES · Source

Text layers

Extracted body text (3,347c)

SEC Obtains Judgments Against Three Defendants in a Microcap Fraud Scheme Litigation Release No. 25563 / October 21, 2022 Securities and Exchange Commission v. Gomes et al.;, ivil Action No. 1:20-cv-11092 (D. Mass. filed June 9, 2020) The Securities and Exchange Commission announced today that it obtained final judgments against three defendants, Douglas Roe and an entity Roe controlled named Atlantean Management Corp., as well as Kelly Warawa, in a previously-filed action against 11 defendants alleging a fraudulent scheme that generated more than $25 million from illegal sales of multiple microcap companies' stock. According to the Commission's complaint, filed in the United States District Court for the District of Massachusetts, Roe and Atlantean, along with defendants Warawa and Shane Schmidt, engaged in a fraudulent scheme to dump the securities of a microcap company, Sandy Steele Unlimited, Inc. Roe, Warawa and Schmidt allegedly used Atlantean and other defendant entities to secretly hold their shares of Sandy Steele and the other entities to sell the shares through a fraudulent business, operated by defendant Nelson Gomes, which concealed their identities while illegally dumping their stock into the public market. The complaint alleges that these illegal sales of Sandy Steele's stock were boosted by promotional campaigns that, in some instances, included false and misleading information designed fraudulently to capitalize on the COVID-19 pandemic, such as false claims that Sandy Steele could produce medical quality facemasks. On October 20, 2022, the Court ordered Roe to pay a civil penalty of $248,435 and Atlantean to pay a civil penalty of $300,000. Previously, Roe, Atlantean and Warawa consented to the entry of final judgments on March 30, 2022, enjoining each of them from violations of Sections 5(a), 5(c) and 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder. The judgment against Warawa also imposed a five year penny stock bar and ordered her to pay disgorgement in the amount of $9,190 plus prejudgment interest in the amount of $362, and a civil penalty of $9,190. Further, on March 30, 2022, the Court ordered: (i) Roe to pay $548,435 in disgorgement plus prejudgment interest in the amount of $32,971 (of which $545,974 is joint and several with Atlantean); and (ii) Atlantean to pay disgorgement and prejudgment interest of $545,974, which is joint and several with Roe. The judgment against Atlantean also imposed a five year penny stock bar. On July 13, 2021, the court entered a partial judgment by consent against the one remaining defendant, Shane Schmidt, which required him to pay disgorgement and prejudgment interest. Upon the Commission's motion, the Court may also impose a civil penalty, with all monetary amounts against Schmidt to be determined at a later date by the Court, at which time the SEC's case will be complete. The litigation is being handled by Trevor Donelan, Kathleen Shields, J. Lauchlan Wash, and Amy Gwiazda in the Boston Regional Office. For additional information, see Litigation Release No. 24839 (June 18, 2020), Litigation Release No. 24979 (December 9, 2020), Litigation Release No. 25100 (May 28, 2021) and Litigation Release No. 25200 (September 10, 2021). Memorandum And Order

OCR text (3,347c · html-text · 99% conf)

Enriched metadata

Exhibits & Attached Documents (1)

Extracted insights

Related documents (1)