SEC v. O’Rourke, et al.
Case No. 19-cv-4137 (KAM) (E.D.N.Y.)
On July 17, 2019, the Commission filed a complaint (the “Complaint”) against Garrett M. O’Rourke (“O’Rourke”) and Michael J. Black (“Black”) (collectively, the “Defendants”). In the Complaint, the Commission alleged that, from approximately May 2016 through July 2018, O’Rourke and Black schemed to sell the stock of AV1 Group, Inc., EnviroTechnologies International, Inc., and other publicly traded companies to investors through false and misleading statements and high pressure stock promotional campaigns. The Commission also alleged that the Defendants disguised their control over some or all of the companies and their stock, thereby circumventing their obligations to register the stock with the Commission pursuant to Section 5 of the Securities Act of 1933 and conduct sales in accordance with the governing registration regulations. See Complaint.
The matter has since been resolved against O’Rourke; the action against Black is still pending. By amended final order entered by consent on December 7, 2020, the Court ordered O’Rourke, among other things, to pay disgorgement and prejudgment interest totaling $5,763,719. The Commission was ordered to hold all funds, together with interest and income earned thereon, pending further order of the Court. See O’Rourke’s Final Judgment.
O’Rourke has paid the judgment in full, and the SEC currently holds over $5.7 million in an interest-bearing account at the U.S. Treasury’s Bureau of Fiscal Service (the “Distribution Fund”). Interest earned, and any funds paid by Black pursuant to Court Order, will be added to the Distribution Fund.
On March 4, 2021, the Court entered an order that appointed Miller Kaplan Arase LLP as the Tax Administrator, JND Legal Administration as the Distribution Agent of the Distribution Fund, and authorized related relief. See, the Court’s Order
On April 8, 2021, the Commission filed a letter pursuant to Section III.B.1. of Judge Kiyo A. Matsumoto’s Chamber Practices to ask that the Court schedule a pre-motion conference in connection with the SEC’s anticipated motion for the entry of an Order to Show Cause or, alternatively, enter an Order to Show Cause why the Court should not approve the Commission’s proposed plan to distribute the Distribution Fund (the “Proposed Plan”).
On April 19, 2021, after a telephonic hearing, the Court entered an Order to Show Cause pursuant to which individuals and entities who purchased the following securities during the period(s) set forth in the table below, or other interested parties, by May 19, 2021, shall show cause, if there is any, why this Court should not enter an Order approving the Proposed Plan for the distribution of the Distribution Fund. Objections must be made in accordance with the directions set forth in Section II of the Order to Show Cause.
|Company Name||Trading Symbol||Relevant Period Start Date (inclusive)||Relevant Period End Date (inclusive)|
|AV1 Group, Inc.||AVOP||5/4/2016||10/19/2016|
|EnviroTechnologies International, Inc.||ETII||2/1/2017||6/30/2017|
|EnviroTechnologies International, Inc.||ETII||1/30/2018||5/10/2018|
|Cyberfort Software, Inc.||CYBF||6/29/2018||8/15/2018|
|Link Reservations, Inc.||LRSV||10/7/2016||2/9/2017|
|BioHemp International, Inc.||
* During the relevant period, BioHemp International (BKIT) completed a corporate name change in June 2019. Prior to this change, the company was known as Blake Insomnia Therapeutics (BKIT). Due to the name change, BKIT temporarily traded as BKITD. BKITD will be considered an eligible security if the trade occurred during the Relevant Period.
On May 20, 2021, in accordance with the Order to Show Cause, the Commission filed a Notice of No Objection, seeking the entry of an Order approving the Proposed Distribution Plan to govern the administration and distribution of the Distribution Fund. See the Commission’s Notice. The Commission supplemented the Notice by letter filed May 26, 2021. See the Letter together with supporting documents.
On May 26, 2021, the Court entered a docket Order approving the Plan and published the Plan as approved. The Commission is ordered to file a status report with the Court by July 30, 2021 as to the progress of the distribution. See the Court’s Order and the Plan
On October 13, 2022 the Commission filed a letter with the Court requesting a pre-motion conference for an Order to distribute funds to eligible harmed investors. See the Letter. Upon request by the Court for additional information, on October 25, 2022, the Commission supplemented its submission with a second letter. See the Letter.
On October 26, 2022 the Court issued an Order to transfer $5,067,142.21 for distribution to harmed investors in accordance with the Court-approved Plan. See the Order.
For more information, please contact the Distribution Agent: