SEC Charges Three Individuals with Unregistered Brokerage Activity in the Sale of Microcap Securities
Litigation Release No. 24958 / November 9, 2020
Securities and Exchange Commission v. Hughe Duwayne Graham, Donald Lee Howard, Larry Louis Matyas, No. 1:20-cv-02505 (N.D. Ohio filed November 6, 2020)
The Securities and Exchange Commission charged Hughe Duwayne Graham, Donald Lee Howard, and Larry Louis Matyas, with acting as unregistered brokers in the sale of the securities of microcap issuer US Lighting Group, Inc.
According to the SEC's complaint, from at least October 2017 through at least May 2019, Graham, Howard and Matyas solicited investments in US Lighting Group by cold calling and emailing prospective investors, sending the investors subscription agreements, and instructing investors as to how to make their investment. The complaint alleges that they received commission payments of approximately 40% of investor proceeds from sales of US Lighting Group securities. According to the complaint, none of the defendants were registered as a broker-deal or associated with a registered broker-dealer at the time.
The SEC's complaint, filed in the federal district court for the Northern District of Ohio, charges Graham, Howard and Matyas with violating the broker-dealer registration provisions of Section 15(a)(1) of the Securities Exchange Act of 1934. Matyas has consented, on a neither-admit-nor-deny basis, to the entry of a judgment that imposes permanent injunctions, conduct-based injunctions from soliciting purchases or sales of securities, and a civil penalty of $367,916. The settlement is subject to court approval.
The SEC's investigation was conducted by James Thibodeau and Laurie Abbott, was assisted by David Whipple and Casey Fronk, and was supervised by Amy Oliver, Assistant Director, and Daniel Wadley, Regional Director of the Salt Lake Regional Office.
The SEC's Office of Investor Education and Advocacy has issued an Investor Alert to encourage investors to check the background of anyone selling investments using the SEC's Investor.gov website to quickly identify whether they are registered professionals.