U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25841 / September 21, 2023
Securities and Exchange Commission v. Luis Jimenez Carrillo, et al., Civil Action No. 1:21-cv-11272 (D. Mass. filed Aug. 4, 2021)
SEC Obtains Judgment Totaling More Than $50 Million Against Individual for Participating in Fraudulent Microcap Scheme
On September 19, 2023, the U.S. District Court for the District of Massachusetts entered a final judgment against Mexican resident Luis Jimenez Carrillo for participating in a fraudulent scheme involving unlawful microcap stock sales. The judgment ordered Carrillo to pay more than $50 million.
The SEC’s action alleges that, from at least 2013 through May 2019, Mexican resident Carrillo concealed the fact that he and others controlled the securities of numerous microcap companies whose stock was publicly traded in the U.S. securities markets. According to the complaint, Carrillo secretly sold millions of the companies’ shares in violation of the securities laws, often after organizing promotional campaigns to encourage investors to buy the stock. Justin Wall, Jamie Wilson, and Amar Bahadoorsingh allegedly worked with Carrillo to gain control of at least one company’s securities and fraudulently sell them. The complaint alleges that, as a result of these actions, what appeared to be ordinary trading by unaffiliated investors was actually a massive selling of shares orchestrated by Carrillo, Bahadoorsingh, Wall, and Wilson, who were seeking to profit at the expense of defrauded investors.
On September 19, 2023, the court entered a final judgment by default against Carrillo, permanently enjoining him 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, the registration provisions of Section 5 of the Securities Act, and the ownership reporting provisions of Section 13(d) of the Exchange Act. The judgment ordered Carrillo to pay disgorgement of $39,334,544 and prejudgment interest of $7,782,751, and a civil penalty of $5,803,954.
The court previously entered judgments against Bahadoorsingh, Wall, and Wilson, and two relief defendants, the Martha Y. Jimenez Trust and the Charles A. Carrillo Trust, which received illicit proceeds from the fraudulent scheme.
The SEC’s case was handled by Kathleen Shields, Susan Cooke, and Ryan Murphy of the Boston Regional Office.