SEC Settles with Unregistered Public Shell Company Broker
Yesterday, The Securities and Exchange Commission filed settled charges against recidivist James K. McKillop for acting as an unregistered broker and for failing to timely file required beneficial ownership forms in connection with his position at Tiber Creek Corp. The SEC also separately filed related settled administrative charges against Tiber Creek and Tiber Creek’s president, James M. Cassidy.
According to the SEC’s complaint and the SEC’s order, Tiber Creek maintained an inventory of SEC-registered public shell companies, for which McKillop and Cassidy served as the officers, directors, and fifty percent shareholders. The SEC alleges that since July 2012, McKillop and Cassidy effected securities transactions through Tiber Creek for more than 100 public shell companies without being registered as brokers. The complaint also alleges that on more than 110 occasions, McKillop and Cassidy failed to timely file required beneficial ownership reports, including Schedules 13G and Forms 4, in connection with the public shell companies.
Without admitting or denying the allegations in the complaint, McKillop has consented to the entry of a final judgment permanently enjoining him from violating the reporting, registration, and beneficial ownership disclosure provisions of Sections 13(d), 15(a), and 16(a) of the Exchange Act, and Rules 13d-1, 16a-2, and 16a-3 thereunder, ordering him to pay disgorgement of $117,000, plus interest of $17,697, and a civil penalty of $75,000, and imposing a penny stock bar. Based on the allegations in the complaint, the SEC also filed an application seeking to enforce an administrative cease-and-desist order instituted against McKillop in 2000. Without admitting or denying the allegations in the application, McKillop has also consented to a district court order requiring him to comply with the cease-and-desist order.
Without admitting or denying the findings, Tiber Creek and Cassidy consented to the entry of the SEC’s order, which finds that Tiber Creek and Cassidy violated the registration provisions of Section 15(a) of the Exchange Act, and that Cassidy violated the reporting and beneficial ownership disclosure provisions of Section 13(d) and Section 16(a) of the Exchange Act, and Rules 13d-1, 16a-2, and 16a-3 thereunder. The SEC’s order requires Tiber Creek and Cassidy to pay, jointly and severally, $117,000 in disgorgement, $17,697 in prejudgment interest, and $75,000 in civil penalties, and imposes cease and desist orders, and associational and permanent penny stock bars. Cassidy also agreed to be permanently suspended from appearing and practicing before the SEC as an attorney. The order prohibits Cassidy from representing clients in SEC matters, including investigations, litigation, or examinations, and from advising clients about SEC filing obligations or content.
The SEC’s continuing investigation is being conducted by Matt Reilly and supervised by Kevin Guerrero and Antonia Chion.
Learn more HERE.