SEC Charges Company Insider with Multiple Frauds
Litigation Release No. 24297 / September 28, 2018
Securities and Exchange Commission v. Thomas Carter Ronk, No. 1:18-cv-8908 (S.D.N.Y filed September 28, 2018)
The Securities and Exchange Commission today charged Thomas Carter Ronk with fraud in connection with multiple alleged schemes to peddle securities to investors and manipulate the market.
The SEC charged Ronk with disseminating false and misleading information in connection with unregistered offerings of securities in two microcap companies: Casablanca Mining Ltd. and Gepco Ltd. According to the SEC's complaint filed in the United States District Court for the Southern District of New York, Ronk touted the issuers' illusory business prospects and made revenue projections without any basis in fact. As Ronk solicited investors to privately invest in Casablanca and Gepco, he also secretly schemed to create the appearance of market interest and a rising share price in their stocks. Further, Ronk allegedly recruited the owner of a boiler room to induce buyers to purchase shares at higher prices. According to the complaint, this manipulative trading temporarily drove up Casablanca and Gepco's stock prices and enhanced the credibility of the issuers while Ronk's capital raising efforts were ongoing.
The complaint further alleges that Ronk engaged in a fraudulent offering of securities in a private company, Wealthmakers, Ltd. Among other things, Ronk, an owner and co-founder of Wealthmakers, misled investors about trading returns that Wealthmakers purportedly generated, along with the amount of seed capital invested by Ronk and other officers of the company.
The Commission charged Ronk with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as the anti-touting provisions of Section 17(b) of the Securities Act. The Commission is seeking a permanent injunction, disgorgement of ill-gotten gains along with prejudgment interest, civil money penalties, a penny stock bar, and an officer-and-director bar against Ronk.
The SEC's investigation was conducted by Brenda Wai Ming Chang, Howard Fischer, and Sheldon Pollock, with assistance by Timothy C. Nealon, under the supervision of Lara Shalov Mehraban. The litigation will be led by Mr. Fischer and Barry O'Connell.