U.S. Securities and Exchange Commission: Ex-Riot Blockchain CEO Settles in principle for alleged ‘lucrative market manipulation’


March 11, 2020 4:00 pm

U.S. Securities and Exchange Commission: Ex-Blockchain CEO Settles in principle for alleged 'lucrative market manipulation’
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John O’Rourke, Ex-CEO of Riot Blockchain, agreed to settle with the U.S. Securities and Exchange Commission (SEC) for $3.5 M above three alleged penny stock pump-and-dump plans, on March 6.

The Securities and Exchange Commission posted a letter Tuesday morning declaring that it had entered agreements to settle with three parties in what the agency called “lucrative market manipulation.”

The SEC letter stated, “The staff has reached agreements in principle to settle this action with Defendants Michael Brauser, John O’Rourke, and John Stetson, and their affiliated entities”

The SEC announced in September 2018, it assaulted a group of ten individuals and ten associated entities. The SEC settlements now with all parties except one, according to court filings. Amongst these who previously settled are Miami biotech billionaire Phillip Frost and Florida businessman Barry Honig, who was the biggest investor in Riot earlier.

The settlement with U.S. Securities and Exchange Commission

The terms of the settlement will mark Michael Brauser, John Stetson, and O’Rourke pay disgorgement, prejudgment concern and public penalties. The trio will not accept or deny the accusations set out in the SEC’s 2018 enforcement action against the trio.O’Rourke’s and Stetson will have to compensate fines exceeding $1.15 million, while Brauser will have to pay approximately $1.17 million.

O’Rourke, O’Rourke’s company ATG Capital, Brauser, and Brauser’s Grander Holdings are enduringly forbidden of involving in all ventures associating to penny stock contributions, while Stetson and Stetson Capital Investments are outlawed from entanglement in penny stock offering for 10 years. The authority also circulated a partial verdict against HS Contrarian Investments — a company in which Stetson was the managing director.

During September 2018, O’Rourke abandoned Riot Blockchain because of the SEC’s execution action against him. O’Rourke was replaced by Riot’s then-chief operating officer Chris Ensey.

Penny stock manipulation 

The three people and four organisations decided to settle in the case — which led assaults upon 10 people and 10 corporate entities concerning three alleged pump-and-schemes directed by venture capitalist and Barry Honig, Riot Blockchain investor.

he group of 20 individuals and companies allegedly made more than $27 million in gains by a coordinated direction of three microcap penny stocks. The SEC explained their actions as involving “brazen market manipulation” that included “fleecing innocent investors [who] were left holding virtually worthless stock.”

The U.S. Securities and Exchange Commission (SEC) testified that Honig orchestrated the recovery of huge amounts of penny stock issuers’ shares for reduced prices before he and his partners “engaged in illegal promotional activity and manipulative trading to artificially boost each issuer’s stock price and to then give the stock the appearance of active trading volume,” then “[dump] their shares into the inflated market.”

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