U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25872 / September 28, 2023
Securities and Exchange Commission v. Adam R. Long, L2 Capital, LLC, and Oasis Capital, LLC, No. 1:23-cv-14260 (N.D. Ill. September 28, 2023)
SEC Charges Three Unregistered Dealers with Registration Violations
The Securities and Exchange Commission today filed charges against Adam R. Long of Dorado, Puerto Rico, and two companies Long owns and controls for acquiring and selling nearly 6 billion shares of microcap stock without registering as a securities dealer with the SEC.
The SEC’s complaint alleges that from at least November 2018 to August 2021, Long and his companies, L2 Capital LLC, and Oasis Capital LLC, regularly engaged in the business of purchasing convertible notes from microcap issuers, converting those notes into shares of stock at a large discount from the market price, and selling the newly issued shares into the market at a significant profit. The SEC alleges that Long and his companies obtained at least $20 million in profits after they sold nearly six billion newly-issued microcap stock shares into the market. The complaint also alleges that at the time of the conduct the Defendants were not registered with the SEC as dealers, in violation of the mandatory registration provisions of the federal securities laws. The SEC further alleges that by failing to register, the Defendants avoided certain regulatory obligations for dealers that govern their conduct in the marketplace, including regulatory oversight, financial reporting requirements, and maintaining required books and records.
The SEC’s complaint, filed in federal court in the U.S. District Court for the Northern District of Illinois, charges the defendants with violating the dealer registration provisions of Section 15(a)(1) of the Securities Exchange Act of 1934. The complaint alternatively charges Long with control person liability under Section 20(a) of the Exchange Act for L2 Capital’s and Oasis Capital’s violations. The SEC seeks permanent injunctions, disgorgement including prejudgment interest on a joint and several basis, civil penalties, and penny stock bars.
The SEC’s investigation was conducted by Jaclyn Janssen and Scott Hlavacek, and supervised by Amy S. Cotter in the Chicago Regional Office. Robert Moye and Gina LaMonica will handle the litigation.