U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25689 / April 5, 2023
Securities and Exchange Commission v. Matthew Nicosia, William Reininger, Fabrizio Di Carlo, and Ronald Touchard, Civ. Action, o. 1:22-cv-05761 (E.D.N.Y. filed Sept. 27, 2022)
SEC Obtains Over $1 Million Final Judgment Against Three Individuals in Microcap Fraud Scheme Targeting Retail Investors
On April 4, 2023, the U.S. District Court for the Eastern District of New York entered final judgments against Utah resident Matthew Nicosia and California residents William (“Rocky”) Reininger, and Ronald Touchard whom the SEC had charged for their roles in a microcap fraud scheme targeting retail investors. Among other things, the judgment orders the defendants to pay a total of over $1.2 million.
According to the SEC’s complaint, filed on September 27, 2022, from August 2019 to at least September 2020, defendants Nicosia, Reininger, and Touchard worked with others to fraudulently sell stock in microcap companies by making misleading statements during high pressure sales calls and/or email promotions. The SEC alleges that, as part of the scheme, Touchard introduced Nicosia and Reininger to a fourth defendant, Fabrizio Di Carlo, who ran a boiler room that identified potential investors and pressured them to purchase stock in Odyssey Group International Inc. According to the complaint, Nicosia and Reininger were Odyssey insiders working with an individual previously charged by the SEC, Charlie Abujudeh, to dump Odyssey shares during the promotional campaigns they were funding. The SEC alleges that the promotions were deceptive and failed to disclose that Nicosia and Reininger were Odyssey insiders, controlled nearly all of the stock that was deposited and available for public trading, and were selling their Odyssey stock into the increased demand created by the promotions they were funding and controlling. According to the complaint, the defendants shared the profits from over $2.6 million in illicit stock sales. The SEC alleges that Reininger and/or Nicosia similarly funded the promotion of Scepter Holdings, Inc. stock and CannaPharmaRx, Inc. stock and failed to make key disclosures to investors to whom they sold that stock.
Without admitting or denying the allegations in the SEC’s complaint, Nicosia, Reininger and Touchard consented to the entry of final judgments permanently enjoining them from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and imposing five-year penny stock bars. The final judgments as to Nicosia and Reininger further enjoined them from violating the registration provisions of Section 5 of the Securities Act and imposed five-year officer-and-director bars. In addition, Nicosia was ordered to pay disgorgement of $526,050, prejudgment interest of $46,311, and a civil penalty of $223,229. Reininger was ordered to pay disgorgement of $272,000, prejudgment interest of $23,940, and a civil penalty of $80,000 and Touchard was ordered to pay disgorgement of $7,400, prejudgment interest of $830, and a civil penalty of $50,000.
The SEC’s ongoing case against defendant DiCarlo is being handled by David D’Addio, Nita Klunder, and Paul Block of the Boston Regional Office. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.