Court Enters Default Judgment Against Microcap Company and Orders Penalty for Fraudulent Press Release
Litigation Release No. 25281 / December 3, 2021
Securities and Exchange Commission v. Michael J. Starkweather and Andiamo Corporation, No. 19-civ-05528 (E.D.N.Y., filed September 30, 2019)
On November 30, 2021, the United States District Court for the Eastern District of New York Entered a Default Judgment Against Andiamo Corporation, a Wyoming-Domiciled, Publicly Traded Microcap Company Headquartered in Draper, Utah, in a Case Involving the Issuance of an Allegedly False and Misleading Press Release That Drove Up the Volume and Price of Andiamo's Stock
According to the SEC's complaint, filed on September 30, 2019, Michael J. Starkweather, while serving as Andiamo's CEO, caused Andiamo to issue a press release announcing the unveiling of a smartphone Andiamo had purportedly developed, touting the phone's technical features, and claiming that the phone was available for distribution. In reality, the complaint alleged, Starkweather knew that the purported smartphone did not exist. The complaint also charged Starkweather with allegedly receiving "kickbacks" from a stock promoter during the months leading up to this allegedly false press release.
The default judgment entered against Andiamo permanently enjoins the company from violating the antifraud provision of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and imposes a penalty of $150,000.
The United States District Court for the Eastern District of New York previously entered a final consent judgment against Michael J. Starkweather.
The investigation was conducted by Thomas W. Peirce and Eric M. Schmidt and supervised by Gerald A. Gross and Lara S. Mehraban. Preethi Krishnamurthy litigated the matter.