SEC Charges Long-Island Based Cold-Caller and His Firm with Defrauding Investors Into Purchasing Penny Stock
Litigation Release No. 24239 / August 21, 2018
Securities and Exchange Commission v. Eric P. Lesak, Global Research, LLC (PA), Global Research, LLC (NY), No. 1:18-cv-01951 (D.D.C. filed on Aug. 21, 2018)
The Securities and Exchange Commission today charged Eric P. Lesak, Global Research, LLC (PA) and Global Research, LLC (NY) with securities fraud in their promotion of the shares of penny stock company, Axiom Holdings, Inc.
According to the complaint, between December 2015 and June 2017, the defendants pitched Axiom stock to more than 100 investors who purchased more than 1.9 million shares of stock for approximately $2.8 million, leading to losses of more than $2.3 million. The complaint alleges that Lesak and Global did not disclose to prospective investors that Lesak had been barred and had his registration suspended by the NASD, or that in 2013 he had pleaded guilty to and been convicted of both securities fraud and wire fraud related to securities transactions. Prior to March 6, 2017, the defendants did not tell prospective investors that they were being paid thousands of dollars each month - in many instances tens of thousands of dollars - to promote Axiom stock to investors. According to the complaint, to help create "traffic" in Axiom stock and the appearance of a market for its securities, Lesak personally bought and sold thousands of shares of Axiom stock in hundreds of transactions that made little economic sense and resulted in losses for Lesak.
The SEC's complaint filed in the United States District Court for the District of Columbia charges Lesak and Global with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint further charges Lesak with violations of the antifraud provisions of Section 17(a)(1) and (3) of the Securities Act of 1933. The SEC is seeking permanent injunctions, disgorgement plus pre-judgment and post-judgment interest, civil monetary penalties, and an order prohibiting Lesak from participating in any offering of penny stocks.
The SEC's investigation was conducted by Patricia Jo, Daniel H. Rubenstein, Era C. Calhoun, and Jessica P. Regan, and supervised by C. Joshua Felker. The SEC's litigation will be led by Christian D.H. Schultz. The SEC appreciates the assistance of the Financial Industry Regulatory Authority (FINRA).