SEC v. In Ovations Holdings, Inc.; and Mark Goldberg, No. 1:18-cv-05026, Eastern District of New York (Sept. 6, 2018) — Complaint

MARC P. BERGER
REGIONAL DIRECTOR
Lara S. Mehraban
Gerald A. Gross
Preethi Krishnamurthy
Eric M. Schmidt
Attorneys for the Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
Brookfield Place
200 Vesey Street, Suite 400
New York, New York 10281-1022
(212) 336-0116 (Krishnamurthy)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE COMMISSION,

                                             Plaintiff,

                        -against-

IN OVATIONS HOLDINGS, INC. and
MARK GOLDBERG,

                                             Defendants.

COMPLAINT

18 Civ. ___ (     )

 Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against
defendants In Ovations Holdings, Inc. (“Ovations”) and Mark Goldberg (“Goldberg”) (together,
“Defendants”), alleges as follows:
SUMMARY
1. From at least 2014 through 2015 (the “Relevant Period”), Defendants Ovations and
Goldberg—a microcap issuer of publicly-traded stock and its chief executive officer, respectively—
issued materially false press releases to fraudulently induce investors to buy Ovations stock.

2

VIOLATIONS
2. By virtue of the conduct alleged in this Complaint, Defendants engaged in acts,
practices, and courses of business that constitute violations of Section 10(b) of the Securities
Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5(b) promulgated
thereunder [17 C.F.R. § 240.10b-5 (b)].
3. Unless Defendants are permanently restrained and enjoined, they will again engage in
the acts, practices, transactions, and courses of business set forth in this Complaint, and in acts,
practices, transactions, and courses of business of a similar type and object.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
4. The Commission brings this action under the authority conferred upon it by
Exchange Act Section 21(d) [15 U.S.C. § 78u(d)].
5. The Commission seeks a final judgment: (a) permanently enjoining Defendants from
violating Exchange Act Section 10(b) and Rule 10b-5 thereunder, pursuant to Exchange Act Section
21(d)(1) [15 U.S.C. § 78u(d)(1)]; (b) ordering Defendant Goldberg to disgorge the ill-gotten gains he
received as a result of the violations alleged here and to pay prejudgment interest thereon, pursuant
to Exchange Act Section 21(d)(5) [15 U.S.C. § 78u(d)(5)]; (c) ordering Defendants to pay civil money
penalties, pursuant to Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; (d) permanently
prohibiting Goldberg from serving as an officer or director of any company that has a class of
securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or that is required to file
reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to Exchange Act
Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; (e) permanently prohibiting Goldberg from participating in
any offering of a penny stock, pursuant to Exchange Act Section 21(d)(6) [15 U.S.C. § 78u(d)(6)] ;
and (f) ordering any other relief the Court may deem just and proper.

3

JURISDICTION AND VENUE
6. This Court has jurisdiction over this action under Exchange Act Section 27
[15 U.S.C. § 78aa].
7. Defendants, directly or indirectly, have made use of the means or instrumentalities of
interstate commerce or of the mails in connection with the transactions, acts, practices, and courses
of business alleged here.
8. Venue lies in the Eastern District of New York under Exchange Act Section 27
[15 U.S.C. § 78aa]. Among other things, Goldberg lives in the Eastern District of New York, where
Ovations has its principal place of business.
THE DEFENDANTS
9. Ovations, a Colorado corporation, has its principal office in Middle Village (Queens
County), New York. Formerly known as Marine Exploration, Inc., Ovations originally claimed to be
in the business of searching for salvageable treasure. From approximately September 2017 through
January 2018, Ovations claimed to be entering the business of selling environmental controls and
biochar products to the cannabis industry. Since then, Ovations has claimed to sell water filtration
and purification systems. Ovations’ common stock, not currently registered with the Commission, is
quoted under the symbol “INOH” on OTC Link, an interdealer quotation and trade messaging
system operated by OTC Markets Group, Inc. During the Relevant Period, Ovations’ common
stock met the definition of a “penny stock” under Exchange Act Section 3(a)(51) [15 U.S.C.
§ 78c(a)(51)] and Rule 3a51-1 thereunder [17 C.F.R. § 240. 3a51-1], in part because the stock traded
below five dollars per share.
10. Goldberg, age 61, lives in Middle Village, New York. From at least 2009 through at
least June 2015, Goldberg served as Ovations’ CEO or co-CEO. Between 1982 and 2003, Goldberg
was associated with various broker-dealers registered with the Commission.

4

FACTS
11. During the Relevant Period, Ovations issued at least seven false or misleading press
releases about its business.
12. On information and belief, Goldberg, as Ovations’ CEO, generated each of these
press releases himself and caused Ovations to issue them.
13. Goldberg did so to fraudulently induce investors to buy shares of Ovations stock so
that one or more stock promoters could sell their Ovations shares in the market for a profit.
14. Goldberg knew or recklessly disregarded the falsity or misleading nature of each of
these press releases.
15. On information and belief, Goldberg received approximately $250,000 in return
from one or more stock promoters at least partly for Goldberg’s role in issuing Ovations’ false or
misleading press releases.
A. The Press Releases about Licensing Lung Cancer Detection Technology
16. On June 10, 2014, Ovations issued a press release entitled “In Ovations Holdings,
Inc. Announces the Licensing of Technology for Early Detection of Lung Cancer.”
17. On information and belief, Goldberg generated and caused Ovations to issue this
press release.
18. The press release claimed:
[Ovations] has concluded negotiations for licensing sophisticated
sputum cytology technology for early and pre stage detection of lung
cancer from Mel Ehrlich, Ph.D., who is also an officer and director
of INOH. Dr. Ehrlich has invented, patented, perfected and
marketed multiple biomedical and energy efficiency technologies.
Pursuant to the license, INOH obtained exclusive rights to market
the sputum cytology and related technologies world-wide from Dr.
Ehrlich.

5

19. On July 2, 2014, at approximately 9:25 a.m.,
1
 Ovations issued a press release entitled
“In Ovations Holdings, Inc. Announces the Immediate Availability of the Early Detection of Lung
Cancer Kit.”
20. On information and belief, Goldberg generated and caused Ovations to issue this
press release.
21. The press release claimed:
[Ovations] is pleased to announce the implementation of the
technology using sputum cytology for the early detection of lung
cancer, a recognized laboratory procedure similar to the ‘Pap’ test.
Mel Ehrlich, Ph.D. stated, ‘I am pleased with the diligent efforts that
[Ovations] is implementing with the sputum cytology technology for
the early detection of lung cancer.’
22. In reality, Dr. Ehrlich never served as an officer or director of Ovations, as Goldberg
knew from his position as Ovations’ CEO.
23. Nor did Ovations ever provide any funding to Dr. Ehrlich under its licensing
agreement in order to obtain rights to his technology, as Goldberg similarly knew.
24. On June 30 and July 1, 2014, the two days before Ovations issued its July 2 press
release, and on July 2, 2014, no shares of Ovations’ common stock traded in the market.
25. On July 3, 2014, the day after Ovations issued the press release, approximately 9.95
million Ovations shares traded in the market.
B. The Press Releases about Acquiring a Wholly-Owned Subsidiary
26. Less than seven months later, on January 20, 2015, at approximately 8:50 a.m.,
Ovations issued a press release entitled “In Ovations Holdings, Inc. Acquires NBE Financial
Network, Inc. With Close to 1 Million Dollars in Annual Revenues Through Management of Several
Locations in Four States.”

1
  All times alleged in this Complaint reflect Eastern Standard or Eastern Daylight Time.

6

27. On information and belief, Goldberg generated and caused Ovations to issue this
press release.
28. The press release claimed:
[Ovations] has acquired NBE Financial Network, Inc. (NBE) as a
wholly owned subsidiary. With nearly $1 million dollars in revenues
in 2014, NBE’s acquisition by INOH continues the trend of the
company’s diversification and augments its current holdings with a
strong revenue generating network. NBE, managing established
offices in Florida, New York, New Jersey and Illinois, is engaged in
the operation and management of law offices in these multiple states
and is also engaged in the acquisition and management of residential
properties.
29. The press release also quoted Goldberg:
Mark Goldberg, INOH Co-CEO added, ‘...In seeking out this
relationship and ultimately acquiring NBE as a wholly-owned
subsidiary, we consistently kept in mind the feedback from our
valued shareholders. By acquiring NBE, a company with nearly $1
million dollars in revenues and a presence in multiple metropolitan
areas, we have augmented INOH’s holdings in order to balance
active, present value with our other holdings of strong future
potential.’
30. In reality, Ovations never acquired NBE Financial Network, Inc. (“NBE”) and NBE
never became Ovations’ subsidiary, as Goldberg knew from his position as Ovations’ CEO.
31. On January 16, 2015, the last trading day before Ovations issued its January 20 press
release, approximately 74 million shares of Ovations’ common stock traded in the market.
32. On January 20, 2015, the day Ovations issued that press release, almost four times as
many—over 275 million—Ovations shares traded in the market.
33. On March 16, 2015, at approximately 9:40 a.m., Ovations issued a press release
entitled “In Ovations Holdings, Inc.’s Wholly-Owned Subsidiary NBE Financial Network, Inc.
Reports Substantial Increases in Revenue.”
34. On information and belief, Goldberg generated and caused Ovations to issue this
press release.

7

35. The press release claimed: “[Ovations’] wholly-owned subsidiary NBE Financial
Network, Inc. (NBE) reports revenues of $80,335 for February, 2015, an increase of 31%.”
36. On March 13, 2015, the trading day immediately before Ovations issued its March 16
press release, approximately 47 million shares of Ovations’ common stock traded in the market.
37. On March 16, 2015, the day Ovations issued the press release, over 76 million
Ovations shares traded in the market.
38. The next day, Ovations’ trading volume doubled to more than 155 million shares
traded.
C. The Press Release about Acquiring an Interest in a Multimedia Company
39. On March 26, 2015, at approximately 9:26 a.m., Ovations issued a press release
entitled “In Ovations Holdings, Inc. Announces Expansion Into Multimedia Production, Network
TV Programs, and Advertising – Marketing Services.”
40. On information and belief, Goldberg generated and caused Ovations to issue this
press release.
41. The press release claimed: “[Ovations] has acquired a substantial interest in ASAP
Multimedia (ASAP). Since 1987, ASAP has been a leading full service television, web, multimedia
and production company and creative agency.”
42. From his position as Ovations’ CEO and his discussions with ASAP’s president,
Goldberg knew that Ovations had never acquired an ownership interest in ASAP. Indeed, Goldberg
knew that, in approximately March 2015, Ovations had entered into an agreement with ASAP by
which Ovations would obtain an interest in ASAP in the future upon Ovations’ fulfillment of certain
conditions and that Ovations had not in fact fulfilled those conditions.
43. On March 25, 2015, the day before Ovations issued this press release, approximately
64 million shares of Ovations’ common stock traded in the market.

8

44. On March 26, 2015, the day Ovations issued the press release, over 71.8 million
Ovations shares traded in the market.
45. The next day, Ovations’ trading volume almost doubled to more than 130 million
shares traded.
46. When ASAP’s president discovered and read Ovations’ March 26 press release, he
told Goldberg that ASAP wanted no further association with Ovations.
D. The Press Releases About the Tank Farm
47. On June 10, 2015, at approximately 9:23 a.m., Ovations issued a press release entitled
“In Ovations Holdings, Inc. (INOH) Enters Into Letter of Intent on Acquisition of 7.5 Million
Gallon Tank Farm Calculated to Value Over $13,000,000 and to Yield Revenues of $1.8 Million
Dollars per Year.”
48. On information and belief, Goldberg generated and caused Ovations to issue this
press release.
49. The press release claimed:
[Ovations] and 2 Lisa Court Corporation executed a Letter of Intent
(LOI) for the purchase and rehabilitation of the Meridian Mid
Continent Tank Farm and Terminal (hereinafter ‘Tank Farm’) located
in Meridian, Mississippi. The Tank Farm..., after rehabilitation, will
produce an approximate income in excess of $1,800,000 per year and
possess a total property/project value of between $13,000,000 and
$14,000,000.
50. The press release also announced Goldberg’s resignation as co-CEO.
51. On June 25, 2015, at approximately 8:54 a.m., Ovations issued a press release entitled
“In Ovations Holdings, Inc. (INOH) Executes Purchase and Sale Contract on Acquisition of 7.5
Million Gallon Tank Farm Calculated to Value Over $13,000,000 and to Yield Revenues of $1.8
Million per Year.”

9

52. This press release similarly claimed:
[Ovations] and 2 Lisa Court Corporation executed a formal Purchase
and Sale Agreement for the purchase and rehabilitation of the
Meridian Mid Continent Tank Farm and Terminal (hereinafter ‘Tank
Farm’) located in Meridian, Mississippi. The Tank Farm..., after
rehabilitation, will produce an approximate income in excess of
$1,800,000 per year and possesses a total property/project value of
between $13,000,000 and $14,000,000. As previously disclosed, 2 Lisa
Court Corporation has already committed to provide up to 50%
seller financing to [Ovations] on the approximately 20 acre
site. Additional financing is expected to come from private offerings
and a traditional bank-financed real estate loan.
53. The press release further claimed: “[W]e are pleased to announce that [Ovations] has
welcomed Mr. Ted Doukas [the owner of 2 Lisa Court Corporation] to its Board of Directors. Mr.
Doukas is a recognized corporate turn-around specialist and [Ovations] looks forward to receiving
his input and expert advice.”
54. In fact, although Goldberg had spoken with Ted Doukas about Ovations’ potential
purchase of a Mississippi tank farm (for oil storage) owned by 2 Lisa Court, Goldberg never asked
Doukas to serve on Ovations’ Board of Directors, and Doukas never agreed to do so.
55. Goldberg thus knew that Doukas had never agreed to join and indeed never joined
Ovations’ Board of Directors.
56. Furthermore, on information and belief, Ovations had no reasonable basis for the
tank farm income and valuation projections contained in the June 10 and June 25 press releases.
57. On June 9, 2015, the day before Ovations issued the June 10 press release,
approximately 37 million shares of Ovations traded.
58. On June 10, 2015, the day Ovations issued that press release, almost eight times as
many Ovations shares—over 293 million shares—traded.
59. On June 24, 2015, the day before Ovations issued the June 25 press release, only
580,000 Ovations shares traded.

10

60. On June 25, 2015, the day Ovations issued that press release, 346 times as many—
over 200 million Ovations shares—traded.
61. When Doukas learned of Ovations’ June 25 press release, he complained to
Goldberg that the press release was false. Goldberg claimed that it was a mistake and did not say
anything to Doukas to give him the impression that Goldberg was no longer involved with
Ovations.
62. On October 27, 2015, Ovations issued an “Annual Report – Financial Statements”
that appeared on OTC Link’s website: the first financial report Ovations issued on that website after
Ovations’ June 25, 2015 press release.
63. The annual report listed Goldberg as Ovations’ chief financial officer, secretary, and
director and disclosed that Goldberg “served as CEO since April 2009 and was appointed to the
Board of Directors effective May 1, 2010.”
64. The report did not mention Goldberg’s resignation as Ovations’ CEO.
65. Goldberg’s certification and electronic signature, as chief financial officer, appeared
on the annual report.
CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rule 10b-5(b)
66. Paragraphs 1 through 65 are realleged and incorporated by reference as if fully set
forth herein.
67. Defendants Ovations and Goldberg, directly or indirectly, singly or in concert, in
connection with the purchase or sale of securities and by the use of the means or instrumentalities of
interstate commerce, of the mails, or of the facilities of a national securities exchange, knowingly or
recklessly have made untrue statements of a material fact or omitted to state a material fact necessary
in order to make the statements made, in light of the circumstances under which they were made,
not misleading.

11

68. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert,
have violated, and unless enjoined will again violate, Exchange Act Section 10(b) [15 U.S.C. § 78j(b)]
and Rule 10b-5(b) thereunder [17 C.F.R. § 240.10b-5 (b)].
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests a Final Judgment:
I.
Permanently enjoining Defendants and their agents, servants, employees, and attorneys, and
all persons in active concert or participation with any of them who receive actual notice of the final
judgment by personal service or otherwise, and each of them, from future violations of Exchange
Act Section 10(b) [15 U.S.C. § 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];
II.
Ordering Defendant Goldberg to disgorge all ill-gotten gains he received directly or
indirectly, with prejudgment interest thereon, as a result of his violations alleged in this Complaint;
III.
Ordering Defendants to pay civil money penalties pursuant to Exchange Act Section
21(d)(3) [15 U.S.C. § 78u(d)(3)];
IV.
Permanently prohibiting Defendant Goldberg from serving as an officer or director of any
company that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or
that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to
Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)];
V.
Permanently prohibiting Defendant Goldberg from participating in any offering of a penny
stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading,

or inducing or
attempting
to
induce the purchase or sale of
any penny stock, under
Exchange Act
S
ection
21(d)(6)
[15
U.S.C. ~
78u(d)(6)];
and
VI.
G
ranting any other and further relief as
the
Court
may deem just and proper.
D
ated:
New York, New York
S
eptember 5, 2018
Marc
P.
Berger
Lara S.
Mehraban
G
erald A. Gross
P
reethi
Krishnamurthy
Eric M. Schmidt
SECURITIES
AND EXCHANGE
COMMISSION
New York Regional
Office
B
rookfield
Place
200 Vesey Street, Suite 400
N
ew
York, New York 10281-1022
(212) 336-0116 (Krishnamurthy)
E
mail:
[email protected]
12

MARC P. BERGER 
REGIONAL DIRECTOR 
Lara S. Mehraban 
Gerald A. Gross 
Preethi Krishnamurthy 
Eric M. Schmidt  
Attorneys for the Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
Brookfield Place 
200 Vesey Street, Suite 400 
New York, New York 10281-1022 
(212) 336-0116 (Krishnamurthy) 
 
 
UNITED STATES DISTRICT COURT  
EASTERN DISTRICT OF NEW YORK 
 
 
SECURITIES AND EXCHANGE COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 
IN OVATIONS HOLDINGS, INC. and  
MARK GOLDBERG,  
    
                                             Defendants. 
 

 
 
COMPLAINT 

   
18 Civ. ___ (     ) 

 
   

  
           

          

 

 Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against 

defendants In Ovations Holdings, Inc. (“Ovations”) and Mark Goldberg (“Goldberg”) (together, 

“Defendants”), alleges as follows: 

SUMMARY 

1. From at least 2014 through 2015 (the “Relevant Period”), Defendants Ovations and 

Goldberg—a microcap issuer of publicly-traded stock and its chief executive officer, respectively—

issued materially false press releases to fraudulently induce investors to buy Ovations stock.   

  

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2 
 

VIOLATIONS 

2. By virtue of the conduct alleged in this Complaint, Defendants engaged in acts, 

practices, and courses of business that constitute violations of Section 10(b) of the Securities 

Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5(b) promulgated 

thereunder [17 C.F.R. § 240.10b-5(b)]. 

3. Unless Defendants are permanently restrained and enjoined, they will again engage in 

the acts, practices, transactions, and courses of business set forth in this Complaint, and in acts, 

practices, transactions, and courses of business of a similar type and object. 

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

4. The Commission brings this action under the authority conferred upon it by 

Exchange Act Section 21(d) [15 U.S.C. § 78u(d)]. 

5. The Commission seeks a final judgment: (a) permanently enjoining Defendants from 

violating Exchange Act Section 10(b) and Rule 10b-5 thereunder, pursuant to Exchange Act Section 

21(d)(1) [15 U.S.C. § 78u(d)(1)]; (b) ordering Defendant Goldberg to disgorge the ill-gotten gains he 

received as a result of the violations alleged here and to pay prejudgment interest thereon, pursuant 

to Exchange Act Section 21(d)(5) [15 U.S.C. § 78u(d)(5)]; (c) ordering Defendants to pay civil money 

penalties, pursuant to Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; (d) permanently 

prohibiting Goldberg from serving as an officer or director of any company that has a class of 

securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or that is required to file 

reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to Exchange Act 

Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; (e) permanently prohibiting Goldberg from participating in 

any offering of a penny stock, pursuant to Exchange Act Section 21(d)(6) [15 U.S.C. § 78u(d)(6)]; 

and (f) ordering any other relief the Court may deem just and proper. 

  

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JURISDICTION AND VENUE 

6. This Court has jurisdiction over this action under Exchange Act Section 27 

[15 U.S.C. § 78aa].  

7. Defendants, directly or indirectly, have made use of the means or instrumentalities of 

interstate commerce or of the mails in connection with the transactions, acts, practices, and courses 

of business alleged here. 

8. Venue lies in the Eastern District of New York under Exchange Act Section 27 

[15 U.S.C. § 78aa]. Among other things, Goldberg lives in the Eastern District of New York, where 

Ovations has its principal place of business. 

THE DEFENDANTS 

9. Ovations, a Colorado corporation, has its principal office in Middle Village (Queens 

County), New York. Formerly known as Marine Exploration, Inc., Ovations originally claimed to be 

in the business of searching for salvageable treasure. From approximately September 2017 through 

January 2018, Ovations claimed to be entering the business of selling environmental controls and 

biochar products to the cannabis industry. Since then, Ovations has claimed to sell water filtration 

and purification systems. Ovations’ common stock, not currently registered with the Commission, is 

quoted under the symbol “INOH” on OTC Link, an interdealer quotation and trade messaging 

system operated by OTC Markets Group, Inc. During the Relevant Period, Ovations’ common 

stock met the definition of a “penny stock” under Exchange Act Section 3(a)(51) [15 U.S.C. 

§ 78c(a)(51)] and Rule 3a51-1 thereunder [17 C.F.R. § 240. 3a51-1], in part because the stock traded 

below five dollars per share.  

10. Goldberg, age 61, lives in Middle Village, New York. From at least 2009 through at 

least June 2015, Goldberg served as Ovations’ CEO or co-CEO. Between 1982 and 2003, Goldberg 

was associated with various broker-dealers registered with the Commission.   

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4 
 

FACTS 

11. During the Relevant Period, Ovations issued at least seven false or misleading press 

releases about its business.  

12. On information and belief, Goldberg, as Ovations’ CEO, generated each of these 

press releases himself and caused Ovations to issue them.  

13. Goldberg did so to fraudulently induce investors to buy shares of Ovations stock so 

that one or more stock promoters could sell their Ovations shares in the market for a profit.  

14. Goldberg knew or recklessly disregarded the falsity or misleading nature of each of 

these press releases.  

15. On information and belief, Goldberg received approximately $250,000 in return 

from one or more stock promoters at least partly for Goldberg’s role in issuing Ovations’ false or 

misleading press releases.  

A. The Press Releases about Licensing Lung Cancer Detection Technology  

16. On June 10, 2014, Ovations issued a press release entitled “In Ovations Holdings, 

Inc. Announces the Licensing of Technology for Early Detection of Lung Cancer.” 

17. On information and belief, Goldberg generated and caused Ovations to issue this 

press release. 

18. The press release claimed:  

[Ovations] has concluded negotiations for licensing sophisticated 
sputum cytology technology for early and pre stage detection of lung 
cancer from Mel Ehrlich, Ph.D., who is also an officer and director 
of INOH. Dr. Ehrlich has invented, patented, perfected and 
marketed multiple biomedical and energy efficiency technologies. 
Pursuant to the license, INOH obtained exclusive rights to market 
the sputum cytology and related technologies world-wide from Dr. 
Ehrlich. 

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5 
 

19. On July 2, 2014, at approximately 9:25 a.m.,1 Ovations issued a press release entitled 

“In Ovations Holdings, Inc. Announces the Immediate Availability of the Early Detection of Lung 

Cancer Kit.” 

20. On information and belief, Goldberg generated and caused Ovations to issue this 

press release.  

21. The press release claimed: 

[Ovations] is pleased to announce the implementation of the 
technology using sputum cytology for the early detection of lung 
cancer, a recognized laboratory procedure similar to the ‘Pap’ test. 
Mel Ehrlich, Ph.D. stated, ‘I am pleased with the diligent efforts that 
[Ovations] is implementing with the sputum cytology technology for 
the early detection of lung cancer.’  

22. In reality, Dr. Ehrlich never served as an officer or director of Ovations, as Goldberg 

knew from his position as Ovations’ CEO.  

23. Nor did Ovations ever provide any funding to Dr. Ehrlich under its licensing 

agreement in order to obtain rights to his technology, as Goldberg similarly knew.  

24. On June 30 and July 1, 2014, the two days before Ovations issued its July 2 press 

release, and on July 2, 2014, no shares of Ovations’ common stock traded in the market.   

25. On July 3, 2014, the day after Ovations issued the press release, approximately 9.95 

million Ovations shares traded in the market.  

B. The Press Releases about Acquiring a Wholly-Owned Subsidiary 

26. Less than seven months later, on January 20, 2015, at approximately 8:50 a.m., 

Ovations issued a press release entitled “In Ovations Holdings, Inc. Acquires NBE Financial 

Network, Inc. With Close to 1 Million Dollars in Annual Revenues Through Management of Several 

Locations in Four States.” 

                                                           
1  All times alleged in this Complaint reflect Eastern Standard or Eastern Daylight Time.  

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6 
 

27. On information and belief, Goldberg generated and caused Ovations to issue this 

press release. 

28. The press release claimed:  

[Ovations] has acquired NBE Financial Network, Inc. (NBE) as a 
wholly owned subsidiary. With nearly $1 million dollars in revenues 
in 2014, NBE’s acquisition by INOH continues the trend of the 
company’s diversification and augments its current holdings with a 
strong revenue generating network. NBE, managing established 
offices in Florida, New York, New Jersey and Illinois, is engaged in 
the operation and management of law offices in these multiple states 
and is also engaged in the acquisition and management of residential 
properties. 

29. The press release also quoted Goldberg:  

Mark Goldberg, INOH Co-CEO added, ‘…In seeking out this 
relationship and ultimately acquiring NBE as a wholly-owned 
subsidiary, we consistently kept in mind the feedback from our 
valued shareholders. By acquiring NBE, a company with nearly $1 
million dollars in revenues and a presence in multiple metropolitan 
areas, we have augmented INOH’s holdings in order to balance 
active, present value with our other holdings of strong future 
potential.’ 

30. In reality, Ovations never acquired NBE Financial Network, Inc. (“NBE”) and NBE 

never became Ovations’ subsidiary, as Goldberg knew from his position as Ovations’ CEO. 

31. On January 16, 2015, the last trading day before Ovations issued its January 20 press 

release, approximately 74 million shares of Ovations’ common stock traded in the market.  

32. On January 20, 2015, the day Ovations issued that press release, almost four times as 

many—over 275 million—Ovations shares traded in the market.  

33. On March 16, 2015, at approximately 9:40 a.m., Ovations issued a press release 

entitled “In Ovations Holdings, Inc.’s Wholly-Owned Subsidiary NBE Financial Network, Inc. 

Reports Substantial Increases in Revenue.” 

34. On information and belief, Goldberg generated and caused Ovations to issue this 

press release. 

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35. The press release claimed: “[Ovations’] wholly-owned subsidiary NBE Financial 

Network, Inc. (NBE) reports revenues of $80,335 for February, 2015, an increase of 31%.”  

36. On March 13, 2015, the trading day immediately before Ovations issued its March 16 

press release, approximately 47 million shares of Ovations’ common stock traded in the market.  

37. On March 16, 2015, the day Ovations issued the press release, over 76 million 

Ovations shares traded in the market.  

38. The next day, Ovations’ trading volume doubled to more than 155 million shares 

traded.  

C. The Press Release about Acquiring an Interest in a Multimedia Company 

39. On March 26, 2015, at approximately 9:26 a.m., Ovations issued a press release 

entitled “In Ovations Holdings, Inc. Announces Expansion Into Multimedia Production, Network 

TV Programs, and Advertising – Marketing Services.” 

40. On information and belief, Goldberg generated and caused Ovations to issue this 

press release. 

41. The press release claimed: “[Ovations] has acquired a substantial interest in ASAP 

Multimedia (ASAP). Since 1987, ASAP has been a leading full service television, web, multimedia 

and production company and creative agency.”  

42. From his position as Ovations’ CEO and his discussions with ASAP’s president, 

Goldberg knew that Ovations had never acquired an ownership interest in ASAP. Indeed, Goldberg 

knew that, in approximately March 2015, Ovations had entered into an agreement with ASAP by 

which Ovations would obtain an interest in ASAP in the future upon Ovations’ fulfillment of certain 

conditions and that Ovations had not in fact fulfilled those conditions.  

43. On March 25, 2015, the day before Ovations issued this press release, approximately 

64 million shares of Ovations’ common stock traded in the market.  

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44. On March 26, 2015, the day Ovations issued the press release, over 71.8 million 

Ovations shares traded in the market.  

45. The next day, Ovations’ trading volume almost doubled to more than 130 million 

shares traded.  

46. When ASAP’s president discovered and read Ovations’ March 26 press release, he 

told Goldberg that ASAP wanted no further association with Ovations.  

D. The Press Releases About the Tank Farm  

47. On June 10, 2015, at approximately 9:23 a.m., Ovations issued a press release entitled 

“In Ovations Holdings, Inc. (INOH) Enters Into Letter of Intent on Acquisition of 7.5 Million 

Gallon Tank Farm Calculated to Value Over $13,000,000 and to Yield Revenues of $1.8 Million 

Dollars per Year.” 

48. On information and belief, Goldberg generated and caused Ovations to issue this 

press release. 

49. The press release claimed: 

[Ovations] and 2 Lisa Court Corporation executed a Letter of Intent 
(LOI) for the purchase and rehabilitation of the Meridian Mid 
Continent Tank Farm and Terminal (hereinafter ‘Tank Farm’) located 
in Meridian, Mississippi. The Tank Farm…, after rehabilitation, will 
produce an approximate income in excess of $1,800,000 per year and 
possess a total property/project value of between $13,000,000 and 
$14,000,000.   

50. The press release also announced Goldberg’s resignation as co-CEO.  

51. On June 25, 2015, at approximately 8:54 a.m., Ovations issued a press release entitled 

“In Ovations Holdings, Inc. (INOH) Executes Purchase and Sale Contract on Acquisition of 7.5 

Million Gallon Tank Farm Calculated to Value Over $13,000,000 and to Yield Revenues of $1.8 

Million per Year.” 

  

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52. This press release similarly claimed: 

[Ovations] and 2 Lisa Court Corporation executed a formal Purchase 
and Sale Agreement for the purchase and rehabilitation of the 
Meridian Mid Continent Tank Farm and Terminal (hereinafter ‘Tank 
Farm’) located in Meridian, Mississippi. The Tank Farm…, after 
rehabilitation, will produce an approximate income in excess of 
$1,800,000 per year and possesses a total property/project value of 
between $13,000,000 and $14,000,000. As previously disclosed, 2 Lisa 
Court Corporation has already committed to provide up to 50% 
seller financing to [Ovations] on the approximately 20 acre 
site. Additional financing is expected to come from private offerings 
and a traditional bank-financed real estate loan.  

53. The press release further claimed: “[W]e are pleased to announce that [Ovations] has 

welcomed Mr. Ted Doukas [the owner of 2 Lisa Court Corporation] to its Board of Directors. Mr. 

Doukas is a recognized corporate turn-around specialist and [Ovations] looks forward to receiving 

his input and expert advice.” 

54. In fact, although Goldberg had spoken with Ted Doukas about Ovations’ potential 

purchase of a Mississippi tank farm (for oil storage) owned by 2 Lisa Court, Goldberg never asked 

Doukas to serve on Ovations’ Board of Directors, and Doukas never agreed to do so.  

55. Goldberg thus knew that Doukas had never agreed to join and indeed never joined 

Ovations’ Board of Directors.  

56. Furthermore, on information and belief, Ovations had no reasonable basis for the 

tank farm income and valuation projections contained in the June 10 and June 25 press releases. 

57. On June 9, 2015, the day before Ovations issued the June 10 press release, 

approximately 37 million shares of Ovations traded.  

58. On June 10, 2015, the day Ovations issued that press release, almost eight times as 

many Ovations shares—over 293 million shares—traded.   

59. On June 24, 2015, the day before Ovations issued the June 25 press release, only 

580,000 Ovations shares traded.  

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60. On June 25, 2015, the day Ovations issued that press release, 346 times as many—

over 200 million Ovations shares—traded.  

61. When Doukas learned of Ovations’ June 25 press release, he complained to 

Goldberg that the press release was false. Goldberg claimed that it was a mistake and did not say 

anything to Doukas to give him the impression that Goldberg was no longer involved with 

Ovations.  

62. On October 27, 2015, Ovations issued an “Annual Report – Financial Statements” 

that appeared on OTC Link’s website: the first financial report Ovations issued on that website after 

Ovations’ June 25, 2015 press release.  

63. The annual report listed Goldberg as Ovations’ chief financial officer, secretary, and 

director and disclosed that Goldberg “served as CEO since April 2009 and was appointed to the 

Board of Directors effective May 1, 2010.”  

64. The report did not mention Goldberg’s resignation as Ovations’ CEO.  

65. Goldberg’s certification and electronic signature, as chief financial officer, appeared 

on the annual report.   

CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rule 10b-5(b) 

66. Paragraphs 1 through 65 are realleged and incorporated by reference as if fully set 

forth herein. 

67. Defendants Ovations and Goldberg, directly or indirectly, singly or in concert, in 

connection with the purchase or sale of securities and by the use of the means or instrumentalities of 

interstate commerce, of the mails, or of the facilities of a national securities exchange, knowingly or 

recklessly have made untrue statements of a material fact or omitted to state a material fact necessary 

in order to make the statements made, in light of the circumstances under which they were made, 

not misleading.  

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68. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, 

have violated, and unless enjoined will again violate, Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] 

and Rule 10b-5(b) thereunder [17 C.F.R. § 240.10b-5(b)].  

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests a Final Judgment: 

I. 

Permanently enjoining Defendants and their agents, servants, employees, and attorneys, and 

all persons in active concert or participation with any of them who receive actual notice of the final 

judgment by personal service or otherwise, and each of them, from future violations of Exchange 

Act Section 10(b) [15 U.S.C. § 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]; 

II. 

Ordering Defendant Goldberg to disgorge all ill-gotten gains he received directly or 

indirectly, with prejudgment interest thereon, as a result of his violations alleged in this Complaint; 

III. 

Ordering Defendants to pay civil money penalties pursuant to Exchange Act Section 

21(d)(3) [15 U.S.C. § 78u(d)(3)]; 

IV. 

Permanently prohibiting Defendant Goldberg from serving as an officer or director of any 

company that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or 

that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)], pursuant to 

Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)]; 

V. 

Permanently prohibiting Defendant Goldberg from participating in any offering of a penny 

stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, 

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or inducing or attempting to induce the purchase or sale of any penny stock, under Exchange Act

Section 21(d)(6) [15 U.S.C. ~ 78u(d)(6)]; and

VI.

Granting any other and further relief as the Court may deem just and proper.

Dated: New York, New York

September 5, 2018

Marc P. Berger
Lara S. Mehraban
Gerald A. Gross
Preethi Krishnamurthy
Eric M. Schmidt
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
Brookfield Place
200 Vesey Street, Suite 400
New York, New York 10281-1022
(212) 336-0116 (Krishnamurthy)
Email: [email protected]

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	2018.9.4 Goldberg.INOH complaint
	Exchange