SEC Obtains Final Judgment Against Defendants in Stock Research Scheme
Lit. Release No. 25321 / January 28, 2022
Securities and Exchange Commission v. SeeThruEquity, LLC, Ajay Tandon, and Amit Tandon, No. 1:18-cv-10374-LLS (S.D.N.Y.)
On January 21, 2022, the U.S. District Court for the Southern District of New York entered a final judgment against defendants Ajay Tandon and Amit Tandon for their involvement in a stock research scheme and for illegal "scalping" in connection with that scheme.
According to the SEC's complaint, filed November 8, 2018, Ajay and Amit Tandon, through their stock research firm, SeeThruEquity, LLC, prepared and published purportedly "unbiased" and "not paid for" research reports on hundreds of publicly traded small and microcap companies. The defendants represented that the published reports contained price targets which were objectively determined and that they followed "customary internal trading restrictions" in connection with those reports. As alleged in the SEC's complaint, however, the defendants (a) received compensation for the research reports through camouflaged fees the companies paid to the defendants to present at investor conferences and (b) frequently manipulated the price targets in the research reports. The SEC also alleged that Ajay Tandon, who served as CEO of SeeThruEquity, LLC, frequently engaged in scalping, a form of securities fraud that occurs when a perpetrator makes a stock recommendation to investors and contemporaneously trades against that very recommendation in the open market without adequate disclosure.
Without admitting or denying the SEC's allegations, the Tandons and SeeThruEquity, LLC previously consented to the entry of a judgment permanently enjoining them from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and/or Sections 17(a) and (b) of the Securities Act of 1933.
After the Commission filed its motion for additional remedies, the Court entered final judgment against the Tandons and ordered: (a) a $250,000 civil penalty against Amit Tandon; (b) a $270,000 civil penalty against Ajay Tandon; (c) an injunction prohibiting the Tandons from promoting or deriving compensation from the promotion of any issuer of any security; and (d) five-year penny stock and officer and director bars for each.
The SEC's litigation was led by Pat Huddleston II, Paul Kim and Graham Loomis of the SEC's Atlanta Regional Office. The SEC's ongoing investigation is being conducted by Joshua M. Dickman and supervised by Natalie M. Brunson of the Atlanta Regional Office.