On September 24, 2020, the United States District Court for the District of Arizona entered final consent judgments against two former brokers whom the SEC charged with defrauding investors.

According to the SEC's complaint, filed on April 16, 2013, Jeffrey Stebbins of Mesa, Arizona, and Corbin Jones of Gilbert, Arizona, solicited investors for a tankless water heater project over a three-year period. As alleged in the complaint, Stebbins and Jones misappropriated $1.8 million of investor funds for themselves and fraudulently deprived other investors of their ownership interests in multiple companies that the defendants controlled.

The SEC's action against the defendants was stayed pending the resolution of a parallel criminal case filed by the Arizona State Attorney General based on substantially the same conduct. In 2019, the defendants pleaded guilty to three felony counts of selling unregistered securities in the matter. Stebbins was sentenced to 60 days in prison plus eight years of probation and Jones was sentenced to four years of probation. The defendants were ordered to pay criminal restitution, on a joint and several basis, of $1,771,995.

In the SEC action, Stebbins and Jones have consented to final judgments enjoining them from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, the registration provisions of Section 15(a) of the Exchange Act, and the beneficial ownership reporting requirements of Sections 13(d) and 16(a) of the Exchange Act and Rules 13d-1, 13d-2 and 16a-3 thereunder. Stebbins and Jones also consented to a penny stock bar and to pay, on a joint and several basis, disgorgement of $1,692,323 plus $323,567 in prejudgment interest, subject to offset by amounts paid as restitution in the Arizona criminal case. In a separate administrative proceeding, the SEC also barred Stebbins from the securities industry.

The SEC's litigation was led by Amy Longo with assistance from Junling Ma. The SEC appreciates the assistance of the Arizona State Attorney General's Office.