U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25749 / June 16, 2023
Securities and Exchange Commission v. BHP Capital NY, Inc. and Bryan Pantofel, 1:23-CV-22233 (S.D. Fla. filed June 16, 2023)
SEC Charges Convertible Note Dealer and Its Owner for Failure to Register
The Securities and Exchange Commission today announced settled charges against a convertible note dealer, BHP Capital NY, Inc., and its managing member, Bryan Pantofel, for failing to register with the SEC as securities dealers. As part of the settlement, Pantofel and BHP Capital agreed to pay more than $2.5 million in monetary relief and have BHP Capital surrender for cancellation the securities it allegedly obtained from its unregistered dealer activity.
The SEC's complaint, filed in the U.S. District Court for the Southern District of Florida, alleges that, between December 2017 and mid-2022, BHP Capital purchased more than 100 convertible notes and associated warrants from 47 microcap issuers, and converted the notes into approximately four billion newly issued shares of stock at a large discount from the market price. It then allegedly sold the newly issued shares into the market at a significant profit. As alleged, neither BHP Capital nor Pantofel was registered as a dealer with the SEC or associated with a registered dealer, as their activities required them to be.
Without admitting or denying the allegations, BHP Capital and Pantofel agreed to be permanently enjoined from further violations of Section 15(a)(1) of the Securities Exchange Act of 1934, to pay disgorgement and prejudgment interest of $2,353,073.44 and a civil penalty of $200,000, and to five-year penny stock bars. BHP Capital also agreed to surrender all conversion rights in its currently held convertible notes, surrender for cancellation all unexercised warrants that it acquired in connection with convertible notes, and surrender for cancellation any shares it holds that were acquired by converting notes or exercising related warrants. The settlement is subject to court approval.
The SEC's investigation was conducted by Cecilia B. Connor and Matthew B. Homberger in the Philadelphia Regional Office, assisted by Robert Nesbitt, and supervised by Kingdon Kase and Scott A. Thompson. The litigation will be led by Karen M. Klotz and supervised by Gregory R. Bockin.