Securities and Exchange Commission v. Clinton Maurice Tucker II

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DAVID D. WHIPPLE (Utah State Bar No. 17347)
PRO HAC VICE APPLICATION PENDING
[email protected]
AMY J. OLIVER (Utah State Bar No. 8785)
PRO HAC VICE APPLICATION PENDING
[email protected]
Counsel for Plaintiff
U.S. Securities and Exchange Commission
351 South West Temple, Suite 6.100
Salt Lake City, UT 84101-1950
Tel.: (801) 524-5796
Fax: (801) 524-3558

Local Counsel:
AMY JANE LONGO (Cal. Bar No. 198304)
444 S. Flower Street, Suite 900
Los Angeles, California 90071
Email: [email protected]
Phone: (323) 965-3835
Fax: (213)-443-1904

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
SOUTHERN DIVISION

SECURITIES AND EXCHANGE
COMMISSION,

Plaintiff,
vs.
CLINTON MAURICE TUCKER
II, an individual,
Defendant.

Case No.

COMPLAINT

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Plaintiff Securities and Exchange Commission (the “Commission”), alleges
as follows:
JURISDICTION AND VENUE
1. The Commission brings this action pursuant to Sections 20(b) and
20(d) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77t(b) and (g)]
and Sections 21(d) and (e) of the Securities Exchange Act of 1934 (“Exchange
Act”) [15 U.S.C. § 78u(d) and (e)] to enjoin such acts, practices, and courses of
business, and to obtain disgorgement, prejudgment interest, civil money penalties,
and such other and further relief as this Court may deem just and appropriate.
2. Clinton Maurice Tucker II (“Defendant”) was involved in the offer
and sale of the common stock of numerous microcap companies, which are each a
“security” as that term is defined under Section 2(a)(1) of the Securities Act [15
U.S.C. § 77b(a)(1)] and Section 3(a)(10) of the Exchange Act [15 U.S.C. §
78c(a)(10)].
3. Defendant, directly or indirectly, made use of the mails or the means
or instrumentalities of interstate commerce in connection with the conduct alleged
in this Complaint.
4. This Court has subject matter jurisdiction over this action pursuant to
Section 22 of the Securities Act [15 U.S.C. § 77v], Sections 21(d) and 27 of the
Exchange Act [15 U.S.C. §§ 78u(d) and 78aa], and 28 U.S.C. § 1331.
5. Venue in this District is proper because Defendant is found, inhabits,
and/or transacted business in the Central District of California and because one or
more acts or transactions constituting the violations occurred in the Central District
of California.
SUMMARY OF THE ACTION
6. From at least December 2014 through at least May 2019, Defendant
has been involved in the business of soliciting investors to purchase securities.
7. While acting as an investor solicitor, Defendant defrauded investors

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through two investment schemes.
8. First, Defendant participated in a matched trading scheme, pursuant to
which certain shareholders of microcap companies paid Defendant and others to
facilitate the sale of their shares through coordinated trades.
9. Second, upon identifying particularly vulnerable investors through
this matched trading scheme, Defendant further defrauded them by soliciting them
for additional ostensible investment opportunities and directing them to send funds
directly to him. Instead of using the funds as represented to these investors,
Defendant misappropriated the investors’ money for other purposes, including to
pay for personal expenses.
10. While Defendant engaged in the solicitations in both schemes, he was
neither registered with the Commission as a broker or dealer nor associated with a
broker or dealer registered with the Commission.
11. By engaging in this conduct, as further described herein, Defendant
violated and, unless restrained and enjoined by this Court, may continue to violate
Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], Sections 10(b) and
15(a)(1) of the Exchange Act [15 U.S.C. §§ 78j(b), 78o(a)(1)], and Exchange Act
Rule 10b–5 [17 C.F.R. § 240.10b–5].
DEFENDANT
12. Clinton Maurice Tucker II, age 50, is last known to reside in Trabuco
Canyon, California. Defendant failed to respond to any of the Commission staff’s
attempts at communication or subpoenas, including those that were served upon
him via process server.

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FACTS
 Defendant Offered and Sold Securities in Matched-Trading Schemes
13. Beginning in or around December 2014, Defendant began acting as an
investor solicitor on behalf of William S. Marshall (“Marshall”), the undisclosed
control person of microcap company Intertech Solutions, Inc. (“ITEC”), a Nevada
company that is headquartered in Scottsdale, Arizona.
14. Marshall, through various entities he controlled, obtained large blocks
of ostensibly unrestricted ITEC shares and sought to sell those shares into the
market without significantly affecting ITEC’s share price.
15. Defendant agreed to assist Marshall in selling his ITEC stock and thus
engaged in a matched-trading scheme that generally operated as follows:
a. Marshall obtained large blocks of ostensibly unrestricted shares of
ITEC via private transactions and desired to profit quickly from
them by selling the shares into the market.
b. Marshall however, understood that selling large amounts of thinly-
traded microcap securities through standard brokerage sell orders
would likely take a long time (if using limit orders) and/or cause a
collapse in the price of the shares he sought to sell (if using market
orders).
c. To avoid this, Marshall hired solicitors, including Defendant, to
solicit investors to purchase Marshall’s shares of ITEC.
d. Defendant used purchased lead lists to cold call prospective
investors and inquired if the investor had an active brokerage
account with online order-entry functionality.
e. If so, Defendant pitched the value of an investment in ITEC to the
prospective investor.
f. If the prospective investor was swayed and decided to purchase
shares of ITEC, Defendant would enquire of the prospect how

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much money s/he wished to invest.
g. Defendant would then contact Marshall or his agent and inform
him of the total dollar amount that the investor desired to invest.
h. Marshall or his agent then checked the then-current level II
quotation for ITEC (which shows offers on the ask and bid) and
provided Defendant with a limit order price at which the
prospective investor was to enter his or her purchase order.
i. Defendant then conveyed the determined limit order price to the
prospective investor, who would enter a buy limit order for ITEC
stock at the designated price.
j. Simultaneously, Marshall or his agent entered a sell limit order for
the same amount of shares at the same price. Through these means,
the investor’s buy order and Marshall’s sell order were likely to
match, at least in part, with the effect that Marshall was able to
liquidate his position piecemeal into a market with ready
purchasers.
k. Marshall or his agent and Defendant communicated about how
many shares of the investor’s order were “captured” (i.e., matched
between the investor and Marshall), and Marshall paid Defendant,
via wire transfers, a commission equal to a percentage of the sale
price of the shares.
16. While still working for Marshall, Defendant began working for other
securities solicitation operations and became extensively involved in the securities
solicitation business.
17. Between early 2015 and at least May 2019, Defendant worked as a
solicitor in at least seven securities solicitation operations.
18. Each of these operations participated in a matched-trading scheme
similar to the one carried out by Marshall.

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19. Specifically, individuals like Marshall who owned large blocks of
illiquid microcap securities (the “selling shareholders”) would seek to dump their
shares without causing the price of the shares to crash.
20. To do so, they hired securities solicitation operations like the ones
Defendant worked for to cold call prospective investors and solicit them to
purchase shares of the same microcap companies the selling shareholders were
seeking to dump.
21. If an investor agreed to purchase shares, information about the
intended investment was relayed to the selling shareholder, and the selling
shareholder determined a price and volume for the trade.
22. Without telling the investor about the involvement of the selling
shareholder, the solicitor, Defendant, then instructed the investor to enter a buy
order at the coordinated price and volume.
23. Simultaneously, the selling shareholder placed an opposing sell order
at the same price and volume.
24. If the trade between the selling shareholder and the solicited investor
successfully matched, the selling shareholder paid the securities solicitation
operation a commission, a portion of which was paid to the solicitor, Defendant,
who was responsible for the trade.
25. Total commissions generally ranged from 35% to 50% of investor
proceeds, a portion of which was retained by the securities solicitation operation
and a portion of which the securities solicitation operation paid to Defendant.
26. Defendant was not simply an unwitting solicitor in this matched-
trading scheme but instead knew or was reckless in not knowing the nature of the
scheme.
27. In total, Defendant received gross commissions of almost $600,000
between May 2015 and May 2019 for his involvement as a solicitor in the
matched-trading scheme, including over $33,000 in direct payments from a selling

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shareholder (as opposed to a particular solicitation entity engaged in match-trade
solicitations) clearly demonstrating his awareness that the selling shareholders
were paying him for his solicitation efforts.
28. Defendant deceived investors by failing to inform them of the selling
shareholders’ involvement, thereby leading investors to believe they were entering
into standard open-market transactions.
29. Defendant further deceived investors by using a variety of fictitious
names, including David Heinz, Clifton Jones, Steve Smith, and CJ Wilson, in order
to conceal his identity from investors.
30. In at least one instance, Defendant misled an investor into believing
that he was not receiving commissions for his solicitations, and instead told the
investor that he would receive a warrant as compensation if the stock increased in
value.  Through these means, Defendant obtained money from at least one investor
by means of these misrepresentations and omissions, which he made knowingly or
with severe recklessness.  A reasonable investor would have considered the
misstatements and omissions about Defendant’s true compensation arrangements
and use of investor funds in deciding whether to invest.
31. Furthermore, by using fictitious names, Defendant knowingly or with
severe recklessness made material misrepresentations and omissions to investors.
A reasonable investor would have considered the misstatements and omissions
about his true identity important in deciding whether to invest, particularly where
the Defendant soliciting the transaction was not licensed to engage in securities
solicitations and neither registered with the Commission as a broker or dealer, nor
associated with a broker or dealer registered with the Commission.
 Defendant Lied to Investors and Misappropriated Investor Funds
32. As a solicitor in the above-discussed matched-trading schemes,
Defendant cultivated a relationship with certain investors by repeatedly soliciting
them over the course of several months and convincing them to purchase multiple

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securities.
33. After developing a relationship with these repeat investors, Defendant
transitioned from soliciting them to purchase shares through the matched-trading
scheme to convincing them to send investment funds directly to him for other
ostensible investment opportunities.
34. In this activity, Defendant targeted elderly or otherwise vulnerable
investors, several of whom have since passed away.
35. Defendant invented a variety of evidently fictitious investment
opportunities that he pitched to investors, including opportunities to purchase
shares of companies at a discount, opportunities to purchase shares of a company
before a merger, an investment in a gold venture, and an investment in a
cryptocurrency venture.
36. Upon persuading targeted investors to invest in the contrived
opportunity, Defendant instructed investors to send checks or wires to bank
accounts controlled by him or K.W., who, upon information and belief, is or has
been Defendant’s girlfriend or wife.
37. For example, in 2018, Defendant, using the fictitious name David
Heinz, contacted an investor from North Andover, Massachusetts, and told him
that he had access to discount shares of two companies that were seeking to raise
funds.
38. Defendant offered the investor the shares of one company for around
$0.20 per share and told him they were already worth $1.00 per share and could
increase to even higher in value.
39. Defendant told the investor that as soon as the shares increased in
value, he would send the investor the profits.
40. The investor did not initially purchase the shares from Defendant, but
after Defendant contacted him multiple times over the course of nearly a year, the
investor decided to invest.

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41. Defendant instructed the investor to wire his funds to a bank account
that, upon information and belief is controlled by K.W.
42. Between approximately January 9, 2019 and May 10, 2019, the
investor wired a total of $85,000 to the bank account controlled by K.W.
comprising a total of eight transactions.
43. Defendant never sent the investor any stock certificates or
documentation indicating ownership of the shares he purchased, and the investor
never received a return on his investment.
44. For the Massachusetts investor, and at least five other investors,
financial records demonstrate no subsequent transfer to the represented investment
opportunities.  Instead, the financial records show that after the subject bank
accounts received an inflow of funds from solicited investors, those funds would
immediately be withdrawn as cash and/or used to pay for personal expenses such
as gasoline, restaurant bills, and credit card payments until the account balance was
drawn to a nearly zero balance.
45. In several instances, Defendant told investors that they had received a
return on their investment and that Defendant would be sending the investors
checks or wires reflecting their returns. In all but two of these instances, the
investors never received the promised payments.
46. As to those two instances where payment was made, one investor
from Linden, Michigan, received only $2,000 on or around November 28, 2014,
after being told he was entitled to returns of $15,000 on his $33,500 investment.
47. The second payment was made to an investor from Alberta, Canada,
who received a $500 money order on his $10,000 investment, which he made on or
around October 9, 2015.
48. The Alberta investor was originally told by Defendant that his
$10,000 was going to be used to purchase 40,000 restricted shares of microcap
issuer Kimberly Parry Organics at a discount and that, once the shares became

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unrestricted, Defendant would sell the shares and pay the proceeds to the investor.
49. On or around October 9, 2015, the Alberta investor was told by
Defendant that Defendant had sold the shares and that the investor would soon
receive $32,000 via wire transfer. The investor never received any such wire
transfer from Defendant, although several months later the investor did receive a
check from Defendant for $10,000, but the check bounced.
50. Through these means, Defendant obtained money, at least $165,000
from investors between May 2015 and May 2019, by means of misrepresentations
and omissions.  Defendant failed to disclose that he intended to and did use
investor funds for other things than the represented investments.  Defendant made
these representations knowingly or with severe recklessness.  A reasonable
investor would have considered the Defendant’s misstatements and omissions
about the use of investor funds important in deciding whether to invest.
FIRST CLAIM FOR RELIEF
Violations of Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)]
1. The Commission re-alleges and incorporates by reference each and
every allegation in paragraphs 1–50, inclusive, as if they were fully set forth
herein.
2. By engaging in the conduct described above, Defendant:
a. engaged in the business of effecting transactions in securities
for the account of others; and
b. directly or indirectly, made use of the mails or the means or
instrumentalities of interstate commerce to effect transactions in, or to induce or
attempt to induce the purchase or sale of, securities without being registered as a
broker or dealer with the Commission or associated with a broker or dealer
registered with the Commission.
3. By reason of the foregoing, Defendant violated and, unless enjoined,
will continue to violate Sections 15(a)(1) of the Exchange Act [15 U.S.C.

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§ 78o(a)(1)].
SECOND CLAIM FOR RELIEF
Violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]
4. The Commission re-alleges and incorporates by reference each and
every allegation in paragraphs 1–50, inclusive, as if they were fully set forth
herein.
5. By engaging in the conduct described above, Defendant, directly or
indirectly, individually or in concert with others, in the offer and sale of securities,
by use of the means and instruments of transportation and communication in
interstate commerce or by use of the mails has (1) employed devices, schemes, or
artifices to defraud; (2) obtained money or property by means of untrue statements
of material fact or omissions to state material facts necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading; and (3) engaged in transactions, practices, or courses of business
which operated or would operate as a fraud or deceit.
6. With respect to violations of Sections 17(a)(2) and 17(a)(3) of the
Securities Act, Defendant was at least negligent in his conduct and in the untrue
and misleading statements alleged herein.
7. With respect to violations of Section 17(a)(1) of the Securities Act,
Defendant engaged in the above-referenced conduct knowingly or with sever
recklessness.
8. By reason of the foregoing, Defendant violated and, unless enjoined,
will continue to violate Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].
THIRD CLAIM FOR RELIEF
Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and
Exchange Act Rule 10b-5 [17 C.F.R. § 240.10b-5]
9. The Commission re-alleges and incorporates by reference each and
every allegation in paragraphs 1–50, inclusive, as if they were fully set forth

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herein.
10. By engaging in the conduct described above, Defendant, directly or
indirectly, individually or in concert with others, in connection with the purchase
or sale of securities, by use of the means and instrumentalities of interstate
commerce or by use of the mails has (a) employed devices, schemes, and artifices
to defraud; (b) made untrue statements of material facts or omitted to state material
facts necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading; and (c) engaged in acts, practices,
and course of business which operated as a fraud and deceit upon purchasers,
prospective purchasers, and other persons.
11. Defendant engaged in the above-referenced conduct and made the
above-referenced untrue and misleading statements knowingly or with severe
recklessness.
12. By reason of the foregoing, Defendant violated and, unless enjoined,
will continue to violate Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and
Exchange Act Rule 10b-5 [17 C.F.R. § 240.10b-5].
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court enter a
final judgment:
I.
Permanently restraining and enjoining Defendant from, directly or
indirectly, engaging in conduct in violation of Section 17(a) of the Securities Act
[15 U.S.C. § 77q(a)], Sections 10(b) and 15(a)(1) of the Exchange Act [15 U.S.C.
§§ 78j(b), 78o(a)(1)], and Exchange Act Rule 10b–5 [17 C.F.R. § 240.10b–5];
II.
Permanently restraining and enjoining Defendant from directly or indirectly,
including, but not limited to, through any entity owned or controlled any of them,
soliciting any person or entity to purchase or sell any security;

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III.
Ordering Defendant to disgorge all ill-gotten gains or unjust enrichment
derived from the activities set forth in this Complaint, together with prejudgment
interest thereon;
IV.
Ordering Defendant to pay a civil penalty pursuant to Section 20(d) of the
Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15
U.S.C. § 78u(d)(3)];
V.
Retaining jurisdiction of this action in accordance with the principles of
equity and the Federal Rules of Civil Procedure in order to implement and carry
out the terms of all orders and decrees that may be entered, or to entertain any
suitable application or motion for additional relief within the jurisdiction of this
Court; and,
VI.
Granting such other and further relief as this Court may deem just, equitable,
or necessary in connection with the enforcement of the federal securities laws and
for the protection of investors.
VII.
Granting such other and further relief as this Court may deem just, equitable,
or necessary in connection with the enforcement of the federal securities laws and
for the protection of investors.

Dated: May 11, 2020

/s/ Amy Jane Longo
Amy Jane Longo
Attorney for Plaintiff
Securities and Exchange Commission

Complaints and Other Initiating Documents
8:20-cv-00875 Securities and Exchange Commission v. Tucker II
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
Notice of Electronic Filing
The following transaction was entered by Longo, Amy on 5/11/2020 at 8:47 AM PDT and filed on
5/11/2020
Case Name:Securities and Exchange Commission v. Tucker II
Case Number:8:20-cv-00875
Filer:Securities and Exchange Commission
Document Number:
1
Docket Text:
COMPLAINT No Fee Required - US Government, filed by Plaintiff Securities and
Exchange Commission. (Attorney Amy J Longo added to party Securities and Exchange
Commission(pty:pla))(Longo, Amy)
8:20-cv-00875 Notice has been electronically mailed to:
Amy J Longo     [email protected], [email protected], [email protected], [email protected]
8:20-cv-00875 Notice has been delivered by First Class U. S. Mail or by other means
BY THE
FILER to :
The following document(s) are associated with this transaction:
Document description:Main Document
Original filename:F:\marcelom\Tucker\1. Complaint - Tucker (C.D. Cal) (Final).pdf
Electronic document Stamp:
[STAMP cacdStamp_ID=1020290914 [Date=5/11/2020] [FileNumber=29788833-0
] [58e9ffa8a7415de60907c7cd1b2e4048e6cd3cea78720aae3ae01e76a755b543eb4
6a7240f77e01b525ea2919a0801f56044538a7b993cdb1f16af3a4f18d079]]

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DAVID D. WHIPPLE (Utah State Bar No. 17347) 
PRO HAC VICE APPLICATION PENDING 
[email protected]  
AMY J. OLIVER (Utah State Bar No. 8785) 
PRO HAC VICE APPLICATION PENDING 
[email protected]  
Counsel for Plaintiff 
U.S. Securities and Exchange Commission 
351 South West Temple, Suite 6.100 
Salt Lake City, UT 84101-1950 
Tel.: (801) 524-5796 
Fax: (801) 524-3558 
 
Local Counsel: 
AMY JANE LONGO (Cal. Bar No. 198304) 
444 S. Flower Street, Suite 900 
Los Angeles, California 90071 
Email: [email protected] 
Phone: (323) 965-3835 
Fax: (213)-443-1904 
 
 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

SOUTHERN DIVISION 

 

SECURITIES AND EXCHANGE 
COMMISSION, 

 
Plaintiff, 

vs. 

CLINTON MAURICE TUCKER 
II, an individual,  

Defendant. 

  
Case No.  
 

COMPLAINT 

 

 

 

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Plaintiff Securities and Exchange Commission (the “Commission”), alleges 

as follows:  

JURISDICTION AND VENUE 

1. The Commission brings this action pursuant to Sections 20(b) and 

20(d) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77t(b) and (g)] 

and Sections 21(d) and (e) of the Securities Exchange Act of 1934 (“Exchange 

Act”) [15 U.S.C. § 78u(d) and (e)] to enjoin such acts, practices, and courses of 

business, and to obtain disgorgement, prejudgment interest, civil money penalties, 

and such other and further relief as this Court may deem just and appropriate. 

2. Clinton Maurice Tucker II (“Defendant”) was involved in the offer 

and sale of the common stock of numerous microcap companies, which are each a 

“security” as that term is defined under Section 2(a)(1) of the Securities Act [15 

U.S.C. § 77b(a)(1)] and Section 3(a)(10) of the Exchange Act [15 U.S.C. § 

78c(a)(10)].  

3. Defendant, directly or indirectly, made use of the mails or the means 

or instrumentalities of interstate commerce in connection with the conduct alleged 

in this Complaint. 

4. This Court has subject matter jurisdiction over this action pursuant to 

Section 22 of the Securities Act [15 U.S.C. § 77v], Sections 21(d) and 27 of the 

Exchange Act [15 U.S.C. §§ 78u(d) and 78aa], and 28 U.S.C. § 1331. 

5. Venue in this District is proper because Defendant is found, inhabits, 

and/or transacted business in the Central District of California and because one or 

more acts or transactions constituting the violations occurred in the Central District 

of California. 

SUMMARY OF THE ACTION 

6. From at least December 2014 through at least May 2019, Defendant 

has been involved in the business of soliciting investors to purchase securities.  

7. While acting as an investor solicitor, Defendant defrauded investors 

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through two investment schemes.  

8. First, Defendant participated in a matched trading scheme, pursuant to 

which certain shareholders of microcap companies paid Defendant and others to 

facilitate the sale of their shares through coordinated trades. 

9. Second, upon identifying particularly vulnerable investors through 

this matched trading scheme, Defendant further defrauded them by soliciting them 

for additional ostensible investment opportunities and directing them to send funds 

directly to him. Instead of using the funds as represented to these investors, 

Defendant misappropriated the investors’ money for other purposes, including to 

pay for personal expenses. 

10. While Defendant engaged in the solicitations in both schemes, he was 

neither registered with the Commission as a broker or dealer nor associated with a 

broker or dealer registered with the Commission.  

11. By engaging in this conduct, as further described herein, Defendant 

violated and, unless restrained and enjoined by this Court, may continue to violate 

Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], Sections 10(b) and 

15(a)(1) of the Exchange Act [15 U.S.C. §§ 78j(b), 78o(a)(1)], and Exchange Act 

Rule 10b–5 [17 C.F.R. § 240.10b–5]. 

DEFENDANT 

12. Clinton Maurice Tucker II, age 50, is last known to reside in Trabuco 

Canyon, California. Defendant failed to respond to any of the Commission staff’s 

attempts at communication or subpoenas, including those that were served upon 

him via process server. 
  

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FACTS 

 Defendant Offered and Sold Securities in Matched-Trading Schemes 

13. Beginning in or around December 2014, Defendant began acting as an 

investor solicitor on behalf of William S. Marshall (“Marshall”), the undisclosed 

control person of microcap company Intertech Solutions, Inc. (“ITEC”), a Nevada 

company that is headquartered in Scottsdale, Arizona. 

14. Marshall, through various entities he controlled, obtained large blocks 

of ostensibly unrestricted ITEC shares and sought to sell those shares into the 

market without significantly affecting ITEC’s share price. 

15. Defendant agreed to assist Marshall in selling his ITEC stock and thus 

engaged in a matched-trading scheme that generally operated as follows: 

a. Marshall obtained large blocks of ostensibly unrestricted shares of 

ITEC via private transactions and desired to profit quickly from 

them by selling the shares into the market. 

b. Marshall however, understood that selling large amounts of thinly-

traded microcap securities through standard brokerage sell orders 

would likely take a long time (if using limit orders) and/or cause a 

collapse in the price of the shares he sought to sell (if using market 

orders). 

c. To avoid this, Marshall hired solicitors, including Defendant, to 

solicit investors to purchase Marshall’s shares of ITEC. 

d. Defendant used purchased lead lists to cold call prospective 

investors and inquired if the investor had an active brokerage 

account with online order-entry functionality. 

e. If so, Defendant pitched the value of an investment in ITEC to the 

prospective investor. 

f. If the prospective investor was swayed and decided to purchase 

shares of ITEC, Defendant would enquire of the prospect how 

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much money s/he wished to invest. 

g. Defendant would then contact Marshall or his agent and inform 

him of the total dollar amount that the investor desired to invest. 

h. Marshall or his agent then checked the then-current level II 

quotation for ITEC (which shows offers on the ask and bid) and 

provided Defendant with a limit order price at which the 

prospective investor was to enter his or her purchase order. 

i. Defendant then conveyed the determined limit order price to the 

prospective investor, who would enter a buy limit order for ITEC 

stock at the designated price. 

j. Simultaneously, Marshall or his agent entered a sell limit order for 

the same amount of shares at the same price. Through these means, 

the investor’s buy order and Marshall’s sell order were likely to 

match, at least in part, with the effect that Marshall was able to 

liquidate his position piecemeal into a market with ready 

purchasers. 

k. Marshall or his agent and Defendant communicated about how 

many shares of the investor’s order were “captured” (i.e., matched 

between the investor and Marshall), and Marshall paid Defendant, 

via wire transfers, a commission equal to a percentage of the sale 

price of the shares. 

16. While still working for Marshall, Defendant began working for other 

securities solicitation operations and became extensively involved in the securities 

solicitation business. 

17. Between early 2015 and at least May 2019, Defendant worked as a 

solicitor in at least seven securities solicitation operations. 

18. Each of these operations participated in a matched-trading scheme 

similar to the one carried out by Marshall. 

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19. Specifically, individuals like Marshall who owned large blocks of 

illiquid microcap securities (the “selling shareholders”) would seek to dump their 

shares without causing the price of the shares to crash. 

20. To do so, they hired securities solicitation operations like the ones 

Defendant worked for to cold call prospective investors and solicit them to 

purchase shares of the same microcap companies the selling shareholders were 

seeking to dump.   

21. If an investor agreed to purchase shares, information about the 

intended investment was relayed to the selling shareholder, and the selling 

shareholder determined a price and volume for the trade. 

22. Without telling the investor about the involvement of the selling 

shareholder, the solicitor, Defendant, then instructed the investor to enter a buy 

order at the coordinated price and volume. 

23. Simultaneously, the selling shareholder placed an opposing sell order 

at the same price and volume. 

24. If the trade between the selling shareholder and the solicited investor 

successfully matched, the selling shareholder paid the securities solicitation 

operation a commission, a portion of which was paid to the solicitor, Defendant, 

who was responsible for the trade. 

25. Total commissions generally ranged from 35% to 50% of investor 

proceeds, a portion of which was retained by the securities solicitation operation 

and a portion of which the securities solicitation operation paid to Defendant.  

26. Defendant was not simply an unwitting solicitor in this matched-

trading scheme but instead knew or was reckless in not knowing the nature of the 

scheme. 

27. In total, Defendant received gross commissions of almost $600,000 

between May 2015 and May 2019 for his involvement as a solicitor in the 

matched-trading scheme, including over $33,000 in direct payments from a selling 

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shareholder (as opposed to a particular solicitation entity engaged in match-trade 

solicitations) clearly demonstrating his awareness that the selling shareholders 

were paying him for his solicitation efforts. 

28. Defendant deceived investors by failing to inform them of the selling 

shareholders’ involvement, thereby leading investors to believe they were entering 

into standard open-market transactions. 

29. Defendant further deceived investors by using a variety of fictitious 

names, including David Heinz, Clifton Jones, Steve Smith, and CJ Wilson, in order 

to conceal his identity from investors. 

30. In at least one instance, Defendant misled an investor into believing 

that he was not receiving commissions for his solicitations, and instead told the 

investor that he would receive a warrant as compensation if the stock increased in 

value.  Through these means, Defendant obtained money from at least one investor 

by means of these misrepresentations and omissions, which he made knowingly or 

with severe recklessness.  A reasonable investor would have considered the 

misstatements and omissions about Defendant’s true compensation arrangements 

and use of investor funds in deciding whether to invest. 

31. Furthermore, by using fictitious names, Defendant knowingly or with 

severe recklessness made material misrepresentations and omissions to investors.  

A reasonable investor would have considered the misstatements and omissions 

about his true identity important in deciding whether to invest, particularly where 

the Defendant soliciting the transaction was not licensed to engage in securities 

solicitations and neither registered with the Commission as a broker or dealer, nor 

associated with a broker or dealer registered with the Commission. 

 Defendant Lied to Investors and Misappropriated Investor Funds 

32. As a solicitor in the above-discussed matched-trading schemes, 

Defendant cultivated a relationship with certain investors by repeatedly soliciting 

them over the course of several months and convincing them to purchase multiple 

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securities.   

33. After developing a relationship with these repeat investors, Defendant 

transitioned from soliciting them to purchase shares through the matched-trading 

scheme to convincing them to send investment funds directly to him for other 

ostensible investment opportunities. 

34. In this activity, Defendant targeted elderly or otherwise vulnerable 

investors, several of whom have since passed away. 

35. Defendant invented a variety of evidently fictitious investment 

opportunities that he pitched to investors, including opportunities to purchase 

shares of companies at a discount, opportunities to purchase shares of a company 

before a merger, an investment in a gold venture, and an investment in a 

cryptocurrency venture.  

36. Upon persuading targeted investors to invest in the contrived 

opportunity, Defendant instructed investors to send checks or wires to bank 

accounts controlled by him or K.W., who, upon information and belief, is or has 

been Defendant’s girlfriend or wife. 

37. For example, in 2018, Defendant, using the fictitious name David 

Heinz, contacted an investor from North Andover, Massachusetts, and told him 

that he had access to discount shares of two companies that were seeking to raise 

funds. 

38. Defendant offered the investor the shares of one company for around 

$0.20 per share and told him they were already worth $1.00 per share and could 

increase to even higher in value. 

39. Defendant told the investor that as soon as the shares increased in 

value, he would send the investor the profits. 

40. The investor did not initially purchase the shares from Defendant, but 

after Defendant contacted him multiple times over the course of nearly a year, the 

investor decided to invest. 

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41. Defendant instructed the investor to wire his funds to a bank account 

that, upon information and belief is controlled by K.W. 

42. Between approximately January 9, 2019 and May 10, 2019, the 

investor wired a total of $85,000 to the bank account controlled by K.W. 

comprising a total of eight transactions. 

43. Defendant never sent the investor any stock certificates or 

documentation indicating ownership of the shares he purchased, and the investor 

never received a return on his investment. 

44. For the Massachusetts investor, and at least five other investors, 

financial records demonstrate no subsequent transfer to the represented investment 

opportunities.  Instead, the financial records show that after the subject bank 

accounts received an inflow of funds from solicited investors, those funds would 

immediately be withdrawn as cash and/or used to pay for personal expenses such 

as gasoline, restaurant bills, and credit card payments until the account balance was 

drawn to a nearly zero balance. 

45. In several instances, Defendant told investors that they had received a 

return on their investment and that Defendant would be sending the investors 

checks or wires reflecting their returns. In all but two of these instances, the 

investors never received the promised payments. 

46. As to those two instances where payment was made, one investor 

from Linden, Michigan, received only $2,000 on or around November 28, 2014, 

after being told he was entitled to returns of $15,000 on his $33,500 investment. 

47. The second payment was made to an investor from Alberta, Canada, 

who received a $500 money order on his $10,000 investment, which he made on or 

around October 9, 2015. 

48. The Alberta investor was originally told by Defendant that his 

$10,000 was going to be used to purchase 40,000 restricted shares of microcap 

issuer Kimberly Parry Organics at a discount and that, once the shares became 

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unrestricted, Defendant would sell the shares and pay the proceeds to the investor. 

49. On or around October 9, 2015, the Alberta investor was told by 

Defendant that Defendant had sold the shares and that the investor would soon 

receive $32,000 via wire transfer. The investor never received any such wire 

transfer from Defendant, although several months later the investor did receive a 

check from Defendant for $10,000, but the check bounced. 

50. Through these means, Defendant obtained money, at least $165,000 

from investors between May 2015 and May 2019, by means of misrepresentations 

and omissions.  Defendant failed to disclose that he intended to and did use 

investor funds for other things than the represented investments.  Defendant made 

these representations knowingly or with severe recklessness.  A reasonable 

investor would have considered the Defendant’s misstatements and omissions 

about the use of investor funds important in deciding whether to invest. 

FIRST CLAIM FOR RELIEF 

Violations of Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)] 

1. The Commission re-alleges and incorporates by reference each and 

every allegation in paragraphs 1–50, inclusive, as if they were fully set forth 

herein.  

2. By engaging in the conduct described above, Defendant: 

a. engaged in the business of effecting transactions in securities 

for the account of others; and 

b. directly or indirectly, made use of the mails or the means or 

instrumentalities of interstate commerce to effect transactions in, or to induce or 

attempt to induce the purchase or sale of, securities without being registered as a 

broker or dealer with the Commission or associated with a broker or dealer 

registered with the Commission. 

3. By reason of the foregoing, Defendant violated and, unless enjoined, 

will continue to violate Sections 15(a)(1) of the Exchange Act [15 U.S.C. 

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§ 78o(a)(1)]. 

SECOND CLAIM FOR RELIEF 

Violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)] 

4. The Commission re-alleges and incorporates by reference each and 

every allegation in paragraphs 1–50, inclusive, as if they were fully set forth 

herein. 

5. By engaging in the conduct described above, Defendant, directly or 

indirectly, individually or in concert with others, in the offer and sale of securities, 

by use of the means and instruments of transportation and communication in 

interstate commerce or by use of the mails has (1) employed devices, schemes, or 

artifices to defraud; (2) obtained money or property by means of untrue statements 

of material fact or omissions to state material facts necessary in order to make the 

statements made, in light of the circumstances under which they were made, not 

misleading; and (3) engaged in transactions, practices, or courses of business 

which operated or would operate as a fraud or deceit.  

6. With respect to violations of Sections 17(a)(2) and 17(a)(3) of the 

Securities Act, Defendant was at least negligent in his conduct and in the untrue 

and misleading statements alleged herein. 

7. With respect to violations of Section 17(a)(1) of the Securities Act, 

Defendant engaged in the above-referenced conduct knowingly or with sever 

recklessness. 

8. By reason of the foregoing, Defendant violated and, unless enjoined, 

will continue to violate Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

THIRD CLAIM FOR RELIEF 

Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 

Exchange Act Rule 10b-5 [17 C.F.R. § 240.10b-5] 

9. The Commission re-alleges and incorporates by reference each and 

every allegation in paragraphs 1–50, inclusive, as if they were fully set forth 

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herein.  

10. By engaging in the conduct described above, Defendant, directly or 

indirectly, individually or in concert with others, in connection with the purchase 

or sale of securities, by use of the means and instrumentalities of interstate 

commerce or by use of the mails has (a) employed devices, schemes, and artifices 

to defraud; (b) made untrue statements of material facts or omitted to state material 

facts necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading; and (c) engaged in acts, practices, 

and course of business which operated as a fraud and deceit upon purchasers, 

prospective purchasers, and other persons. 

11. Defendant engaged in the above-referenced conduct and made the 

above-referenced untrue and misleading statements knowingly or with severe 

recklessness. 

12. By reason of the foregoing, Defendant violated and, unless enjoined, 

will continue to violate Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 

Exchange Act Rule 10b-5 [17 C.F.R. § 240.10b-5]. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court enter a 

final judgment: 

I. 

Permanently restraining and enjoining Defendant from, directly or 

indirectly, engaging in conduct in violation of Section 17(a) of the Securities Act 

[15 U.S.C. § 77q(a)], Sections 10(b) and 15(a)(1) of the Exchange Act [15 U.S.C. 

§§ 78j(b), 78o(a)(1)], and Exchange Act Rule 10b–5 [17 C.F.R. § 240.10b–5]; 

II. 

Permanently restraining and enjoining Defendant from directly or indirectly, 

including, but not limited to, through any entity owned or controlled any of them, 

soliciting any person or entity to purchase or sell any security; 

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III. 

Ordering Defendant to disgorge all ill-gotten gains or unjust enrichment 

derived from the activities set forth in this Complaint, together with prejudgment 

interest thereon; 

IV. 

Ordering Defendant to pay a civil penalty pursuant to Section 20(d) of the 

Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 

U.S.C. § 78u(d)(3)]; 

V. 

Retaining jurisdiction of this action in accordance with the principles of 

equity and the Federal Rules of Civil Procedure in order to implement and carry 

out the terms of all orders and decrees that may be entered, or to entertain any 

suitable application or motion for additional relief within the jurisdiction of this 

Court; and, 

VI. 

Granting such other and further relief as this Court may deem just, equitable, 

or necessary in connection with the enforcement of the federal securities laws and 

for the protection of investors. 

VII. 

Granting such other and further relief as this Court may deem just, equitable, 

or necessary in connection with the enforcement of the federal securities laws and 

for the protection of investors. 

 

Dated: May 11, 2020 

 

 /s/ Amy Jane Longo 

Amy Jane Longo 
Attorney for Plaintiff 
Securities and Exchange Commission 

 

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Complaints and Other Initiating Documents 
8:20-cv-00875 Securities and Exchange Commission v. Tucker II

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

Notice of Electronic Filing

The following transaction was entered by Longo, Amy on 5/11/2020 at 8:47 AM PDT and filed on 
5/11/2020 
Case Name: Securities and Exchange Commission v. Tucker II
Case Number: 8:20-cv-00875
Filer: Securities and Exchange Commission
Document Number:1

Docket Text:
COMPLAINT No Fee Required - US Government, filed by Plaintiff Securities and 
Exchange Commission. (Attorney Amy J Longo added to party Securities and Exchange 
Commission(pty:pla))(Longo, Amy)

8:20-cv-00875 Notice has been electronically mailed to: 

Amy J Longo     [email protected], [email protected], [email protected], [email protected] 

8:20-cv-00875 Notice has been delivered by First Class U. S. Mail or by other means BY THE 
FILER to : 

The following document(s) are associated with this transaction:

Document description:Main Document 
Original filename:F:\marcelom\Tucker\1. Complaint - Tucker (C.D. Cal) (Final).pdf
Electronic document Stamp:
[STAMP cacdStamp_ID=1020290914 [Date=5/11/2020] [FileNumber=29788833-0
] [58e9ffa8a7415de60907c7cd1b2e4048e6cd3cea78720aae3ae01e76a755b543eb4
6a7240f77e01b525ea2919a0801f56044538a7b993cdb1f16af3a4f18d079]]