Court Orders Judgments of Over $30 Million Against Entities and Individuals That Facilitated International Microcap Scheme
Litigation Release No. 24974 / December 2, 2020
Securities and Exchange Commission v. Bajic et al., No. 20-cv-00007 (S.D.N.Y. filed January 2, 2020)
On November 20 and 23, 2020, a federal court in New York entered final judgments against Rajesh Taneja, Aaron Dale Wise, and Christopher McKnight for their roles in a scheme that generated more than $35 million of illegal sales of stock in at least 45 microcap companies. Among other things, the court ordered Taneja and Wise to pay a combined total of over $1.25 million in monetary relief. The court previously entered final judgments in May 2020 against six companies involved in the scheme and ordered the companies to pay a combined total of close to $32 million.
As alleged in the SEC's complaint, filed in January 2020, Taneja, a Canadian citizen, and Steve M. Bajic, a citizen of Canada and Croatia, helped shareholders secretly dump large quantities of microcap stock. According to the complaint, Bajic and Taneja used companies they controlled, including the six companies against whom the final judgments were issued, to facilitate the scheme. The six companies were used to buy and sell stock to mask the ownership interest of controlling shareholders. According to the complaint, Wise and McKnight used business bank accounts that they controlled to conceal the sources of funds used to pay for related stock promotions.
Taneja, Wise, and McKnight consented to final judgments enjoining them from future violations, or aiding and abetting violations, of Sections 5(a) and (c) and 17(a)(1) and (3) of the Securities Act and Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder. As to defendant Taneja, the final judgment also enjoins him from future violations, or aiding and abetting violations, of Sections 13(d) and 15(a) of the Exchange Act and imposes a penny stock bar. The judgments order Taneja to pay disgorgement and prejudgment interest totaling $947,172.29 and order Wise to pay disgorgement, prejudgment interest, and civil penalties totaling $307,185.11. The judgments order disgorgement and/or penalties for McKnight and penalties for Taneja in an amount to be determined by the Court. On May 7, 2020, the court entered final judgments against Wisdom Chain Ltd., Sure Mighty Ltd., Norfolk Heights Ltd., Crystalmount Ltd., Fountain Drive Ltd. and Island Fortune Global Ltd. and, among other relief, ordered each to pay disgorgement and prejudgment interest that combined totaled nearly $32 million.
The SEC's case against defendants Steve Bajic, SSID Ltd., Tamarind Investments, Inc., Kenneth Ciapala, Anthony Killarney, and Blacklight SA, is being handled by Kathleen Shields, Eric Forni, Rebecca Israel, Trevor Donelan, and Amy Gwiazda in the SEC's Boston Regional Office.