U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23468 / February 16, 2016
Securities and Exchange Commission v. PV Enterprises, Inc., Panagiotis Villiotis, Virtual Sourcing, Inc., Norman Birmingham, Mario Faraone and Sweet Challenge, LLC (a/k/a Sweet Challenge, Inc.), Civil Action No. 1:16-cv-20542-RNS (S.D. Fla.)
SEC Charges Microcap Companies and Individuals with Registration and Antifraud Violations in Connection with Scheme to Make Restricted Shares of Companies Freely Tradeable
On February 16, 2016, the Securities and Exchange Commission charged PV Enterprises, Inc. ("PVEC") and Panagiotis Villiotis ("Villiotis") with violations of the registration and antifraud provisions of the federal securities laws. The Commission also charged Virtual Sourcing, Inc. ("Virtual"), Norman Birmingham ("Birmingham"), Mario Faraone ("Faraone") and Sweet Challenge LLC ("Sweet Challenge") with violations of the registration provisions of the federal securities laws.
The SEC's complaint, filed in federal court in Florida, alleges that:
The complaint alleges that PVEC and Villiotis violated Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. It further alleges that PVEC, Villiotis, Virtual, Birmingham, Faraone and Sweet Challenge all violated Sections 5(a) and 5(c) of the Securities Act. The SEC seeks permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest thereon, and civil penalties against all defendants. It also seeks penny stock bars against Villiotis, Birmingham and Faraone and seeks an officer and director bar against Villiotis. The SEC's investigation is continuing.
PVEC and Virtual are both microcap stock companies who entered into business transactions with a specific Miami based Financing Company, which resulted in the companies issuing millions of shares of their companies' stock to the Financing Company in purported reliance on an exemption from registration which exempts securities issued in court-approved exchanges for "bona fide outstanding securities, claims or property interests."