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SEC v. William R. Schantz, III, et al. Case No. 17-cv-03115 (D.N.J.)

Oct. 5, 2022

On May 4, 2017, the Commission filed a complaint (the “Complaint”) against William R. Schantz, III and Verto Capital Management LLC (collectively, the “Defendants”). The Complaint alleged that, from at least November 2013 through at least November 2015, the Defendants violated federal securities laws by orchestrating an illegal securities offering. The Defendants issued approximately $12.5 million in nine-month 7% promissory notes to at least 80 investors based on false representations. See Complaint.

On May 8, 2017, the Court entered a final judgment (the “Final Judgment”) against the Defendants. The Defendants were ordered to pay a total of $4,033,666.00 in disgorgement and penalties, pursuant to a 360 day payment plan detailed in the Final Judgment. The Final Judgment created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, so the penalties, along the disgorgement, paid can be distributed (the “Fair Fund”). 

The Final Judgment further provides that within 30 days of receipt of a payment of the monies ordered, the Commission will distribute the Fair Fund to the 36 investors, previously identified by Commission staff, who suffered a net harm as a result of the Defendants’ conduct described in the Final Judgment. The distribution payments will be made pro-rata to investors who have not been repaid the amounts of principal and interest owed at the maturity of their note as set forth in Exhibit B of the Final Judgment. Taxes, if any, and related administrative expenses will be paid from the Fair Fund. See the Defendants' Final Judgment.

On May 16, 2017, the Court entered an order that appointed Damasco & Associates LLP as the Tax Administrator to fulfill the tax obligations of the Fair Fund. 

For more information, please contact the Commission:

Office of Distributions

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