U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26010 / May 23, 2024
Securities and Exchange Commission v. John D. Fierro and JDF Capital, Inc., No. 3:20-cv-02104 (GC) (JBD) (D. N.J. May 21, 2024)
SEC Obtains $5.9 Million Judgment Against Unregistered Penny Stock Dealer
On May 21, 2024, Judge Georgette Castner of the United States District Court for the District of New Jersey entered a final judgment against John D. Fierro and JDF Capital, Inc. The SEC's complaint alleged that the Defendants failed to register as securities dealers with the SEC, or to associate with a registered dealer, when they bought and sold billions of newly issued shares of penny stock from at least January 2015 through November 2017. The Defendants obtained the shares directly from issuers after converting debt securities known as convertible notes. By failing to register, Defendants avoided certain regulatory obligations for dealers that govern their conduct in the marketplace, including regulatory inspections and oversight, financial responsibility requirements, and maintaining books and records.
The court previously granted summary judgment to the Commission. On June 29, 2023, the court found that Fierro and JDF Capital engaged in a regular business of buying and selling securities for their own account, and that their failure to register as dealers violated the dealer registration requirements of Section 15(a) of the Securities Exchange Act of 1934.
In its final judgment, the court ordered Fierro and JDF Capital to pay on a joint-and-several basis disgorgement of $4,053,148, prejudgment interest of $1,326,440, and a civil penalty of $500,000, for a total judgment of $5,879,588. The court also entered a permanent injunction against Defendants and ordered them to surrender for cancellation certain stock and conversion rights under existing convertible securities.
The SEC is represented by Joshua E. Braunstein and Antony Richard Petrilla.