SEC v. Ronald Bauer; Craig James Auringer; Adam Christopher Kambeitz; Alon Friedlander; Massimiliano ("Max") Pozzoni; Daniel Mark Ferris, et al., No. LR-26199, Southern District of New York (Dec. 19, 2024) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26199 / December 19, 2024 Securities and Exchange Commission v. Ronald Bauer et al., No. 1:22-cv-03089 (S.D.N.Y. filed Apr. 14, 2022) SEC Obtains Final Judgment Against Penny Stock Fraud Recidivist In Cross-Border Penny Stock Fraud Scheme On December 18, 2024, the Securities and Exchange Commission obtained a final judgment against defendant Petar Dimitrov Mihaylov, a citizen of Bulgaria, for his particular role in a scheme spanning at least 2006 to 2020 that generated more than $145 million of illegal sales of stock in at least 17 microcap companies. The SEC’s complaint was filed on April 14, 2022 in the United States District Court for the Southern District of New York and charged Mihaylov in addition to seven other defendants – all of whom reside outside the U.S. – with engaging in the scheme: Ronald Bauer, Craig James Auringer, Adam Christopher Kambeitz, Alon Friedlander, Massimiliano ("Max") Pozzoni, Daniel Mark Ferris, and David Sidoo. The complaint alleges that Mihaylov partnered with certain of the other defendants in at least two “pump-and-dump” frauds involving penny stock issuers Steampunk Wizards Inc. and Cantabio Pharmaceuticals Inc., and, separately, perpetrated at least one other fraudulent “pump and dump” involving another issuer, Lifelogger Technologies Corp. According to the complaint, Mihaylov used offshore accounts and front companies to conceal that he was the beneficiary of stock sales and failed both to disclose his beneficial ownership and trading and to register his stock sales as legally required. Prior to engaging in the conduct charged against him in the complaint, Mihaylov, by consent, had been permanently enjoined from such conduct in an earlier Commission penny stock fraud enforcement action against him. The SEC’s complaint charged Mihaylov with violating the registration provisions of Section 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act") and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Mihaylov consented to the entry of a final judgment that imposes injunctive relief against future violations of all charged provisions, a conduct-based injunction, a penny stock bar, a permanent bar from serving as an officer or director of any public company, and orders him to pay disgorgement of $1,011,600, prejudgment interest thereon in the amount of $304,466, and a civil penalty in the amount of $1,011,600. The judgment against Mihaylov is the first one entered in the SEC v. Bauer et al. case. The ongoing case against the remaining defendants is being handled by Benjamin D. Brutlag, Kenneth W. Donnelly, David A. Nasse and J. Lee Buck II. See also Lit. Release No. 25366 (April 14, 2022).

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26199 / December 19, 2024 Securities and Exchange Commission v. Ronald Bauer et al., No. 1:22-cv-03089 (S.D.N.Y. filed Apr. 14, 2022) SEC Obtains Final Judgment Against Penny Stock Fraud Recidivist In Cross-Border Penny Stock Fraud Scheme On December 18, 2024, the Securities and Exchange Commission obtained a final judgment against defendant Petar Dimitrov Mihaylov, a citizen of Bulgaria, for his particular role in a scheme spanning at least 2006 to 2020 that generated more than $145 million of illegal sales of stock in at least 17 microcap companies. The SEC’s complaint was filed on April 14, 2022 in the United States District Court for the Southern District of New York and charged Mihaylov in addition to seven other defendants – all of whom reside outside the U.S. – with engaging in the scheme: Ronald Bauer, Craig James Auringer, Adam Christopher Kambeitz, Alon Friedlander, Massimiliano ("Max") Pozzoni, Daniel Mark Ferris, and David Sidoo. The complaint alleges that Mihaylov partnered with certain of the other defendants in at least two “pump-and-dump” frauds involving penny stock issuers Steampunk Wizards Inc. and Cantabio Pharmaceuticals Inc., and, separately, perpetrated at least one other fraudulent “pump and dump” involving another issuer, Lifelogger Technologies Corp. According to the complaint, Mihaylov used offshore accounts and front companies to conceal that he was the beneficiary of stock sales and failed both to disclose his beneficial ownership and trading and to register his stock sales as legally required. Prior to engaging in the conduct charged against him in the complaint, Mihaylov, by consent, had been permanently enjoined from such conduct in an earlier Commission penny stock fraud enforcement action against him. The SEC’s complaint charged Mihaylov with violating the registration provisions of Section 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act") and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Mihaylov consented to the entry of a final judgment that imposes injunctive relief against future violations of all charged provisions, a conduct-based injunction, a penny stock bar, a permanent bar from serving as an officer or director of any public company, and orders him to pay disgorgement of $1,011,600, prejudgment interest thereon in the amount of $304,466, and a civil penalty in the amount of $1,011,600. The judgment against Mihaylov is the first one entered in the SEC v. Bauer et al. case. The ongoing case against the remaining defendants is being handled by Benjamin D. Brutlag, Kenneth W. Donnelly, David A. Nasse and J. Lee Buck II. See also Lit. Release No. 25366 (April 14, 2022).