(HedgeCo.Net) The Securities and Exchange Commission (the “SEC”) has announced charges against Auctus Fund Management, LLC (“Auctus Management”) and its co-owners Alfred Sollami of Brookline, Massachusetts and Louis Posner of Mansfield, Massachusetts, for failing to register as securities dealers with the SEC. Auctus Management, Sollami, and Posner allegedly bought and sold billions of newly-issued shares of microcap securities through their fund Auctus Fund, LLC (“Auctus Fund”), generating millions of dollars in profit, without registering as dealers or associating with a registered dealer, as required by the federal securities laws.
The SEC’s complaint, filed in federal district court in Boston, Massachusetts, alleges that from 2013 through 2021, Auctus Management, Sollami, and Posner engaged in the business of purchasing convertible notes and associated warrants from microcap issuers, converting the notes into shares of stock at a large discount from the market price, and selling those newly issued shares into the market at a significant profit. Auctus Management, Sollami, and Posner allegedly purchased through Auctus Fund notes from more than 150 separate issuers and sold more than 60 billion shares of newly issued stock into the market, generating profits of over $100 million. As alleged, Auctus Management, Sollami, and Posner failed to register as securities dealers with the SEC or associate themselves with a registered dealer, in violation of the mandatory registration provisions of the federal securities laws. By failing to register, Auctus Management, Sollami, and Posner avoided certain legal obligations for securities dealers that govern their conduct in the marketplace and protect the investing public, including regulatory inspections and oversight, financial responsibility requirements, and maintaining books and records.
The SEC’s complaint charges Auctus Management, Sollami, and Posner with violating Sections 15(a)(1) and 20(b) of the Securities Exchange Act of 1934. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, civil penalties, and penny stock bars, and other equitable relief. The complaint also names as a relief defendant Auctus Fund, and seeks disgorgement from Auctus Fund of ill-gotten gains from Auctus Management, Sollami, and Posner’s violations.
