SEC v. William A. Justice; Keith A. Rosenbaum; Brian D. Shibley; and Randell R. Torno, No. LR-26344, Northern District of Texas (July 10, 2025) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26344 / July 10, 2025 Securities and Exchange Commission v. Keith A. Rosenbaum, William A. Justice, Randell R. Torno, and Brian D. Shibley, No. 3:25-cv-01716 (N.D. Tex. filed July 1, 2025) SEC Charges Public Company CEOs and Disbarred Attorney in Penny-Stock Fraud Scheme On July 1, 2025, the Securities and Exchange Commission charged William A. Justice, Brian D. Shibley, and Randell R. Torno, each a former Chief Executive Officer (“CEO”) of a penny-stock public company, and Keith A. Rosenbaum, a disbarred California attorney, for their roles in an alleged $112 million pump-and-dump scheme orchestrated by Texas resident Philip Verges. The SEC previously filed charges against Verges and others on September 26, 2023, for their roles in the alleged scheme. The SEC’s complaint alleges that, from approximately June 2017 through June 2022, at Verges’ direction, the CEOs signed, or allowed their signatures to appear on, disclosure statements published a penny stock trading platform that they reasonably should have known contained materially false and misleading information regarding who prepared the penny-stock issuers’ financial statements and also concealed Verges’s control of the penny-stock issuers. In addition, the complaint alleges that, at Verges’s direction, each CEO executed documents that facilitated share issuances to Verges’s nominees without exercising reasonable care in inquiring whether the issuances were appropriate and/or accurate. The SEC’s complaint further alleges that Rosenbaum authored at least 17 attorney opinion letters for one of Verges’s nominees after being suspended from practicing law by the State Bar of California, and subsequently authored at least 73 more opinion letters after he was disbarred. The SEC’s complaint, filed in the U.S. District Court for the Northern District of Texas, charges the CEOs with violating Sections 17(a)(2) and (3) of the Securities Act of 1933 (“Securities Act”) and Rosenbaum with violating Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The CEOs, without admitting or denying the SEC’s allegations, consented to the entry of final judgments permanently enjoining them from violations of the charged statutes, imposing a penny-stock bar and officer-and-director bar against each CEO, ordering Torno to pay disgorgement of $22,398.08 plus prejudgment interest of $2,011.92, and ordering Torno and Shibley to each pay a civil penalty of $35,000. Rosenbaum, without admitting or denying the SEC’s allegations, consented to a bifurcated settlement permanently enjoining him from future violations of the antifraud provision and ordering disgorgement, prejudgment interest, civil penalties, and a penny-stock bar to be resolved upon a motion by the SEC. The investigation was conducted by Christopher Reynolds and Carol Stumbaugh of the SEC’s Fort Worth Regional Office, under the supervision of Derek Kleinmann and B. David Fraser. The litigation will be led by Jason P. Reinsch and supervised by Keefe M. Bernstein.

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26344 / July 10, 2025 Securities and Exchange Commission v. Keith A. Rosenbaum, William A. Justice, Randell R. Torno, and Brian D. Shibley, No. 3:25-cv-01716 (N.D. Tex. filed July 1, 2025) SEC Charges Public Company CEOs and Disbarred Attorney in Penny-Stock Fraud Scheme On July 1, 2025, the Securities and Exchange Commission charged William A. Justice, Brian D. Shibley, and Randell R. Torno, each a former Chief Executive Officer (“CEO”) of a penny-stock public company, and Keith A. Rosenbaum, a disbarred California attorney, for their roles in an alleged $112 million pump-and-dump scheme orchestrated by Texas resident Philip Verges. The SEC previously filed charges against Verges and others on September 26, 2023, for their roles in the alleged scheme. The SEC’s complaint alleges that, from approximately June 2017 through June 2022, at Verges’ direction, the CEOs signed, or allowed their signatures to appear on, disclosure statements published a penny stock trading platform that they reasonably should have known contained materially false and misleading information regarding who prepared the penny-stock issuers’ financial statements and also concealed Verges’s control of the penny-stock issuers. In addition, the complaint alleges that, at Verges’s direction, each CEO executed documents that facilitated share issuances to Verges’s nominees without exercising reasonable care in inquiring whether the issuances were appropriate and/or accurate. The SEC’s complaint further alleges that Rosenbaum authored at least 17 attorney opinion letters for one of Verges’s nominees after being suspended from practicing law by the State Bar of California, and subsequently authored at least 73 more opinion letters after he was disbarred. The SEC’s complaint, filed in the U.S. District Court for the Northern District of Texas, charges the CEOs with violating Sections 17(a)(2) and (3) of the Securities Act of 1933 (“Securities Act”) and Rosenbaum with violating Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The CEOs, without admitting or denying the SEC’s allegations, consented to the entry of final judgments permanently enjoining them from violations of the charged statutes, imposing a penny-stock bar and officer-and-director bar against each CEO, ordering Torno to pay disgorgement of $22,398.08 plus prejudgment interest of $2,011.92, and ordering Torno and Shibley to each pay a civil penalty of $35,000. Rosenbaum, without admitting or denying the SEC’s allegations, consented to a bifurcated settlement permanently enjoining him from future violations of the antifraud provision and ordering disgorgement, prejudgment interest, civil penalties, and a penny-stock bar to be resolved upon a motion by the SEC. The investigation was conducted by Christopher Reynolds and Carol Stumbaugh of the SEC’s Fort Worth Regional Office, under the supervision of Derek Kleinmann and B. David Fraser. The litigation will be led by Jason P. Reinsch and supervised by Keefe M. Bernstein.