SEC Obtains Final Judgment Against Securities Lawyer and Microcap Agent and Bars Lawyer from Practicing or Appearing Before the SEC
Litigation Release No. 25175 / August 19, 2021
Securities and Exchange Commission v. William Scott Lawler and Natalie Bannister, 1:19-cv-04025 (E.D.N.Y. filed July 12, 2019)
The Securities and Exchange Commission announced that on August 18, 2021, the United States District Court for the Eastern District of New York entered on the court docket final judgments, dated July 30, 2021, against attorney William Scott Lawler and microcap agent Natalie Bannister.
The SEC's complaint, filed on July 12, 2019, charged Lawler with engaging in schemes to fraudulently transfer control over the shares of two publicly-traded shell companies to a client. The complaint alleged that Lawler represented his client on the purchase of Broke Out Inc. (BRKO) and the predecessor to Immage Biotherapeutics Corp. (IMMG). Microcap agent Natalie Bannister allegedly participated in the BRKO scheme by assisting in the sale of BRKO to the client. The complaint alleged that, among other deceptive conduct, Lawler drafted false attorney-opinion letters, one of which Bannister submitted to a broker, to falsely represent that the stock of BRKO and IMMG could be immediately sold publicly once his client took control of the companies. Further, Bannister allegedly placed phony bids and offers for the BRKO stock at Lawler's direction in order to ensure a market for the stock.
Lawler and Bannister have consented to the entry of final judgments in the SEC's action. The judgments permanently enjoin Lawler and Bannister from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, and Section 10(b) Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the registration provisions of Section 5(a) and 5(c) of the Securities Act, and enjoin Lawler from violating the market manipulation provision of Section 9(a) of the Exchange Act. The judgments also bar Lawler and Bannister from participating in an offering of penny stock. Lawler is ordered to pay $386,790, consisting of $186,594 in disgorgement, $13,602 in prejudgment interest and a civil penalty of $186,594. Bannister is ordered to pay $21,781, consisting of $10,000 in disgorgement, $1,781 in prejudgment interest and a civil penalty of $10,000. Separately, the SEC instituted settled administrative proceedings against Lawler in which, without admitting or denying the findings, Lawler consented to an order barring him from appearing or practicing before the SEC.
The SEC's investigation was conducted by Hane L. Kim, Kevin McGrath, Joseph Darragh, and Steven G. Rawlings in the New York Office, and supervised by Lara S. Mehraban.