SEC Charges Penny Stock Company, Control Person, and Former Officer With Fraud In Filing False Reports and Selling Unregistered Securities
Litigation Release No. 24058 / February 28, 2018
Securities and Exchange Commission v. Analytica Bio-Energy Corp., et al., No. 1:18-cv-00472 (D.D.C., filed February 28, 2018)
Securities and Exchange Commission v. Marvin Winick, No. 1:18-mc-00032 (D.D.C., filed February 28, 2018)
The Securities and Exchange Commission today announced fraud charges against Canadian-based penny stock company Analytica Bio-Energy Corp., a shareholder controlling its affairs, and a former officer for filing false reports with the SEC and for the controlling shareholder's fraudulent scheme to sell unregistered shares to the public. In a related matter, the SEC also filed an application seeking a court order requiring Analytica's accountant, Marvin Winick, to comply with an SEC suspension order from 2006.
The SEC's complaint, filed in the U.S. District Court for the District of Columbia, alleges that from 2013 to 2014, Douglas Murdock, who was an undisclosed control person of Analytica, orchestrated a scheme to fraudulently procure Analytica shares and sell them in unregistered transactions. Murdock also fraudulently induced Analytica's transfer agent to remove the restrictive legend from company shares. While Murdock conducted this scheme, he and Luiz Brasil, Analytica's former President, substantially assisted Analytica's filing of numerous misleading periodic reports with the SEC.
The SEC's complaint charges Analytica and Murdock with violating Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5(b) thereunder, and charges Murdock and Brasil with aiding and abetting those violations. Murdock is also charged with violating Sections 5(a), 5(c), 17(a)(1), and 17(a)(3) of the Securities Act of 1933, and Section 10(b) of the Exchange Act and Rules 10b-5(a) and 10b-5(c) thereunder.
Without admitting or denying the SEC's allegations, Murdock and Brasil agreed to the entry of judgments permanently enjoining them from future violations of the charged sections of the federal securities laws; imposing penny stock bars and officer-and-director bars; and providing that, upon the SEC's motion, the court shall determine whether it is appropriate to order disgorgement of ill-gotten gains and/or a civil penalty.
In a related matter, the SEC filed an application seeking an order requiring Canadian accountant Marvin Winick to comply with a 2006 SEC order that suspended Winick from appearing or practicing before the Commission. According to the SEC's application, Winick violated the SEC's 2006 suspension order by preparing and consolidating financial statements that were included in periodic reports that Analytica filed with the Commission in 2013 and 2014. Winick has consented to the entry of a court order enforcing the SEC's 2006 suspension order.
These actions are subject to Court approval.
The Commission also announced today the temporary suspension, for ten business days, of trading in the securities of Analytica.
The SEC's investigation was conducted by Michael Brennan and was supervised by Antonia Chion, Melissa Hodgman, and Kevin Guerrero. The SEC's litigation against Analytica, Murdock, and Brasil, and application concerning Winick, will be handled by David Mendel and Mr. Brennan, and will be supervised by Cheryl Crumpton. The SEC appreciates the assistance of the Ontario Securities Commission.