SEC Obtains Final Judgments Against Defendants in Ticket Investment Scheme
Litigation Release No. 24203 / July 16, 2018
Securities and Exchange Commission v. Joseph Meli, et al., No. 17-CV-632 (S.D.N.Y.)
On July 13, 2018, a federal court in New York City entered final judgments against a Manhattan man and three of his companies in connection with a multi-million dollar Ponzi scheme involving purported resales of tickets to popular concerts and Broadway shows. Matthew Harriton, one of two individual defendants named in the SEC's complaint, along with three entities affiliated with Harriton, settled with the SEC and collectively agreed to pay more than $8.3 million in disgorgement, prejudgment interest, and civil penalties.
In January 2017, the SEC filed a complaint against defendants Harriton, Joseph Meli, and four of their companies. The SEC alleged that Meli and Harriton solicited investments for the bulk purchase and resale of tickets to popular Broadway shows and concerts, but used the majority of the funds raised from investors to make payments to earlier investors and to enrich themselves and certain members of Meli's family. On April 26, 2017, the court entered a preliminary injunction and asset freeze against Meli, Harriton, and their companies. The SEC charged each of the defendants with securities fraud in violation of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
Defendants Harriton and 875 Holdings, LLC, and relief defendants MXCU Holdings, LLC and Mash Transactions, LLC agreed to settle with the SEC. The final judgment entered against Harriton permanently enjoins him from violating Sections 17(a)(2) and (3) of the Securities Act of 1933 ("Securities Act") and orders him to pay a total of $1,375,785, including disgorgement, prejudgment interest, and a civil penalty. The final judgment entered against 875 Holdings permanently enjoins it from violating Section 17(a) of the Securities Act, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and orders it to pay a total of $6,573,542, including disgorgement, prejudgment interest, and a civil penalty. MXCU Holdings and Mash Transactions were charged as relief defendants based on their alleged receipt of misappropriated investor funds. MXCU Holdings and Mash Transactions were ordered to pay a total of $342,491 and $65,877, respectively, in disgorgement and prejudgment interest.
The SEC's case is being handled by Dahlia Rin, John McCann, Martin Healey, and Celia Moore of the Boston Regional Office. The SEC appreciates the assistance of the FBI and the U.S. Attorney's Office for the Southern District of New York. The SEC's litigation against Meli and his remaining co-defendants and relief defendants remains ongoing.