SEC v. Lee Simmons, No. LR-25478, Southern District of New York (Aug. 19, 2022) — Press Release

SEC Charges Market Manipulator Who Filed False Documents Via Edgar Litigation Release No. 25478 / August 19, 2022 Securities and Exchange Commission v. Lee Simmons, No. 1:22-cv-07081 (S.D.N.Y. filed Aug. 19, 2022) The Securities and Exchange Commission Today Charged Lee Simmons, a Minnesota Resident, with Fraud Stemming from His Allegedly Phony Offer to Purchase Bluelinx Holdings, Inc.- a U.S.-listed wholesale distributor of building and industrial products. According to the SEC's complaint, filed in federal district court in Manhattan, on February 20, 2020, Simmons and Bluefin Acquisition, LLC, a sham company he controlled, issued a phony press release announcing a proposed tender offer to acquire at least 35% of BlueLinx common stock for $24.50 a share, a significant premium over the stock's previous closing price. As alleged, the press release led to a spike in the price of BlueLinx shares, but Simmons was not able to capitalize on the price movement by selling options that he had purchased before the fake tender offer. According to the complaint, late the next day, minutes before his options were set to expire, Simmons issued a second press release to "confirm" the purported tender offer. This second press release, it is alleged, helped Simmons manipulate the price of BlueLinx stock for the second time in two days, allowing him to sell roughly half of his call options and make a small profit. The SEC's complaint alleges that Simmons's press releases were materially misleading because he had not in fact commenced a tender offer and did not have the financial means to complete the transaction. According to the complaint, to give his purported tender offer the appearance of legitimacy and prolong the positive market reaction long enough to profit from it, Simmons filed false documents through the Commission's online Electronic Data Gathering and Retrieval (EDGAR) system suggesting that he had access to funds to complete the tender offer. The SEC's complaint charges Simmons with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-8 thereunder, and Section 207 of the Investment Advisers Act of 1940, and seeks permanent and conduct-based injunctions, disgorgement and prejudgment interest, a penalty, and an officer and director bar. The investigation was conducted by David Snyder of the SEC's Crypto Assets and Cyber Unit and Han Nguyen of the Market Abuse Unit. The investigation was supervised by Assunta Vivolo of the Crypto Assets and Cyber Unit, Carolyn Welshhans, Acting Chief of the Crypto Assets and Cyber Unit, Joseph G. Sansone, Chief of the Market Abuse Unit, and Scott Thompson, Acting Co-Regional Director of the Philadelphia Regional Office. The litigation will be conducted by John Donnelly and supervised by Gregory Bockin of the Philadelphia Regional Office. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York and U.S. Department of Homeland Security. SEC Complaint

SEC Charges Market Manipulator Who Filed False Documents Via Edgar Litigation Release No. 25478 / August 19, 2022 Securities and Exchange Commission v. Lee Simmons, No. 1:22-cv-07081 (S.D.N.Y. filed Aug. 19, 2022) The Securities and Exchange Commission Today Charged Lee Simmons, a Minnesota Resident, with Fraud Stemming from His Allegedly Phony Offer to Purchase Bluelinx Holdings, Inc.- a U.S.-listed wholesale distributor of building and industrial products. According to the SEC's complaint, filed in federal district court in Manhattan, on February 20, 2020, Simmons and Bluefin Acquisition, LLC, a sham company he controlled, issued a phony press release announcing a proposed tender offer to acquire at least 35% of BlueLinx common stock for $24.50 a share, a significant premium over the stock's previous closing price. As alleged, the press release led to a spike in the price of BlueLinx shares, but Simmons was not able to capitalize on the price movement by selling options that he had purchased before the fake tender offer. According to the complaint, late the next day, minutes before his options were set to expire, Simmons issued a second press release to "confirm" the purported tender offer. This second press release, it is alleged, helped Simmons manipulate the price of BlueLinx stock for the second time in two days, allowing him to sell roughly half of his call options and make a small profit. The SEC's complaint alleges that Simmons's press releases were materially misleading because he had not in fact commenced a tender offer and did not have the financial means to complete the transaction. According to the complaint, to give his purported tender offer the appearance of legitimacy and prolong the positive market reaction long enough to profit from it, Simmons filed false documents through the Commission's online Electronic Data Gathering and Retrieval (EDGAR) system suggesting that he had access to funds to complete the tender offer. The SEC's complaint charges Simmons with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-8 thereunder, and Section 207 of the Investment Advisers Act of 1940, and seeks permanent and conduct-based injunctions, disgorgement and prejudgment interest, a penalty, and an officer and director bar. The investigation was conducted by David Snyder of the SEC's Crypto Assets and Cyber Unit and Han Nguyen of the Market Abuse Unit. The investigation was supervised by Assunta Vivolo of the Crypto Assets and Cyber Unit, Carolyn Welshhans, Acting Chief of the Crypto Assets and Cyber Unit, Joseph G. Sansone, Chief of the Market Abuse Unit, and Scott Thompson, Acting Co-Regional Director of the Philadelphia Regional Office. The litigation will be conducted by John Donnelly and supervised by Gregory Bockin of the Philadelphia Regional Office. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York and U.S. Department of Homeland Security. SEC Complaint