Promoters Barred From Penny Stock Offerings


Litigation Release No. 24102 / April 5, 2018

Securities and Exchange Commission v. CSIR Group, LLC, et al., No. 17-cv-02541 (S.D.N.Y. filed Apr. 10, 2017)

On March 15, 2018, the U.S. District Court for the Southern District of New York entered final judgments against CSIR Group, LLC, Christine Petraglia, Herina Ayot and John Mylant for their roles in a fraudulent stock promotion scheme. According to the SEC's complaint, CSIR hired writers to publish more than a dozen bullish articles on its clients, which appeared to be independent research pieces, but, in fact, were paid advertisements.

The final judgments permanently enjoined all defendants from violating Section 17(b) of the Securities Act of 1933; CSIR, Ayot and Mylant from violating Section 17(a) of the Securities Act, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and Petraglia from violating Section 17(a)(3) of the Securities Act. CSIR and Ayot were permanently barred from participating in penny stock offerings, and Petraglia received a three-year penny stock bar. The judgments ordered CSIR and Petraglia to pay disgorgement plus interest, jointly and severally with each other, of $8,571, and ordered each of them to pay civil penalties of $8,571. The judgments also ordered Mylant to pay disgorgement plus interest of $6,100 and a penalty of $7,500. CSIR, Petraglia, Ayot and Mylant consented to the entry of the final judgments, and neither admitted nor denied the allegations in the SEC's complaint.

The SEC's litigation continues against Thomas Meyer.