Ronald Heineman

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25965 / April 3, 2024

Securities and Exchange Commission v. DiScala et al., Civil Action No. 1:14-cv-4346 (E.D.N.Y. filed July 17, 2014; amended Jan. 19, 2016)

SEC Obtains Final Judgment Against CodeSmart Defendant for Role in Alleged Offering Fraud

On April 1, 2024, the U.S. District Court for the Eastern District of New York entered a final judgment against Ronald Heineman, enjoining him from violating certain provisions of the federal securities laws and ordering him to pay civil monetary penalties.

According to the SEC’s complaint, starting in 2013, Heineman was involved in a scheme to manipulate the price of the securities of CodeSmart Holdings, Inc. (“CodeSmart”). The SEC alleged that Heineman, as chief compliance officer of Halcyon Cabot Partners, Ltd. (“Halcyon”), ignored red flags related to trading in CodeSmart and the conduct of one of Halcyon’s registered representatives. Specifically, the SEC alleged that Heineman was aware one of the principals of the scheme was using Halcyon to facilitate his sale of CodeSmart shares while Halcyon clients were purchasing those shares. The SEC further alleged that Heineman engaged in matched trading for the purpose of inflating the price of CodeSmart securities.

The SEC’s complaint charged Heineman with violating Section 17(a) of the Securities Act of 1933 and Sections 9(a) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the allegations, Heineman consented to a final judgment in which he agreed to be permanently enjoined from violations of the charged provisions. He agreed to pay $25,000 in civil monetary penalties. On April 1, 2024, the Court entered the final judgment.

The SEC’s litigation is being handled by Todd Brody and Lindsay Moilanen of the New York Regional Office and is being supervised by Sheldon L. Pollock and Joseph Sansone. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of New York and the FBI.