U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23314 / August 10, 2015
Securities and Exchange Commission v. Michael J. Forster, Civil Action No. 15-misc-246 (S.D.N.Y.)
SEC Files Subpoena Enforcement Action Against Michael J. Forster for Failure to Produce Documents in Investigation of SLO 3 Holdings LLC
The Securities and Exchange Commission announced that on August 6, 2015, it filed a subpoena enforcement action in the U.S. District Court for the Southern District of New York against Michael J. Forster ("Forster"), and that the Court entered an order directing Forster to show cause why he should not be ordered to comply with the subpoena that he received. According to the application and supporting papers, the SEC is investigating whether Forster and others have violated or are violating anti-fraud or other provisions of the federal securities laws in connection with the touting of various microcap issuers.
The SEC's application alleges that Forster touted the stocks of microcap issuers that were subject to pump-and-dump schemes, and that Forster furthered the schemes by paying undisclosed compensation to others to manipulatively trade in the stocks he was touting. The SEC's staff is investigating the involvement of other persons and entities in these and related schemes.
As part of its investigation, the staff in the SEC's New York Regional office served Forster with a document subpoena in February 2015. The SEC's application alleges that Forster repeatedly refused to produce any documents in response to the subpoena, notwithstanding multiple efforts by the SEC to secure his voluntary compliance. The SEC's application seeks an order from the federal district court compelling Forster to comply fully with the subpoena. The SEC is continuing its fact-finding investigation and, to date, has not concluded that anyone has violated the securities laws.