SEC Obtains Final Judgments Against New York Penny Stock Promoter and Associated Companies in Scalping and Market Manipulation Case
Litigation Release No. 24795 / April 15, 2020
Securities and Exchange Commission v. Joseph Fiore, Berkshire Capital Management Company, Inc., and Eat at Joe's, Ltd. (n/k/a SPYR, Inc.), No. 18-cv-5474 (S.D.N.Y. filed April 14, 2020)
On April 14, 2020, the U.S. District Court for the Southern District of New York entered final judgments by consent against a White Plains, New York penny stock financier and two associated companies. The defendants, Joseph Fiore, Berkshire Capital Management Company, Inc., and Eat at Joe's, Ltd. (n/k/a SPYR, Inc.), agreed to pay $3.5 million to settle the SEC's fraud and market manipulation charges.
The SEC's complaint, filed on June 18, 2018, alleged that between March 2013 and March 2014, Fiore manipulated the market for, and scalped, the stock of microcap issuer Plandai Biotechnology, Inc. According to the complaint, Fiore financed and directed a promotional campaign aimed at public investors that included recommendations to buy Plandai stock without disclosing that Fiore beneficially owned Plandai stock, and that he intended to sell and was selling into the public market millions of shares. The complaint further alleged that Fiore engaged in manipulative trading of Plandai stock through two companies he controlled, Berkshire and SPYR, made false and misleading statements to brokerage firms through which he traded Plandai stock, and failed to disclose his beneficial ownership of more than five percent of the outstanding shares of Plandai stock. In addition, the complaint alleged that SPYR failed to register as an investment company with the SEC.
Without admitting or denying the allegations in the complaint, defendants consented to the entry of final judgments that require Fiore, Berkshire, and SPYR jointly and severally to pay $2 million of disgorgement and prejudgment interest, with each defendant separately paying a $500,000 civil penalty. Additionally, Fiore, Berkshire, and SPYR agreed to be permanently enjoined from violating the antifraud, market manipulation, beneficial ownership reporting, and other provisions of the federal securities laws charged in the complaint. Fiore and Berkshire further agreed to be barred for five years from participating in any penny stock offering, and Fiore consented to a five-year bar from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act or that is required to file reports pursuant to Section 15(d) of the Securities Exchange Act of 1934.
The litigation was conducted by John Bowers, Paul Kisslinger, and Christian Schultz, with supervision from Stephan Schlegelmilch. The SEC's investigation was conducted by Drew Dorman, Jason Litow, and Kevin Gershfeld and was supervised by Yuri Zelinsky. The Division of Economic and Risk Analysis, the Division of Corporation Finance, the Division of Trading and Markets, and the Division of Investment Management assisted with the investigation. The SEC also appreciates the assistance of William Park of the Financial Industry Regulatory Authority.