SEC Charges Michigan Resident with Conducting an Unregistered Securities Offering

Litigation Release No. 25539 / September 30, 2022

Securities and Exchange Commission v. Mark J. McKinley, et al., o. 1:22-cv-12326 (E.D. Mich. filed September 30, 2022)

The Securities and Exchange Commission announced today that it filed charges against Mark J. McKinley of Kawkawlin, Michigan and his companies Paystr LLC and JumpStart Equity LLC for conducting an unregistered offering of securities that raised approximately $890,000 from 37 investors in violation of the federal securities laws.

As alleged in the SEC's complaint, from at least August 2019 through May 2021, the Defendants offered and sold securities in one company, JumpStart, in order to obtain funding for a related company, Paystr, to provide consulting services to start-up companies. Both JumpStart and Paystr were founded and controlled by McKinley. As alleged, the Defendants did not register with the SEC these public offers and sales of JumpStart securities, as required by federal securities law, and no exemption or safe harbor from this requirement applied. The complaint alleges that the Defendants illegally raised a total of approximately $890,000 from 37 investors, several of whom were unaccredited, through the sale of JumpStart securities. As alleged, JumpStart investors have not received any profits, interest or return of principal on their investments to date.

The SEC's complaint charges McKinley, Paystr, and JumpStart Equity with violating Section 5 of the Securities Act of 1933. Without admitting or denying the allegations in the complaint, McKinley, Paystr, and JumpStart Equity have consented to the entry of a final judgment that includes a conduct-based injunction that permanently enjoins them from directly or indirectly participating in the issuance, purchase, offer, or sale of any security in an unregistered offering by an issuer, and permanently enjoins them from future violations of Section 5 of the Securities Act, and which imposes civil penalties of $67,500 and $82,500, respectively, on McKinley and Paystr. The settlement is subject to court approval.

The SEC's investigation was conducted by James G. O'Keefe and Ann M. Tushaus and supervised by Steven L. Klawans of the Chicago Regional Office. The litigation is being led by Michael D. Foster.