On March half dozen, 3 individuals including former Anarchism Blockchain CEO John O'Rourke III agreed to settle with the The states Securities and Exchange Commission (SEC) for $3.5 million over three declared penny stock pump-and-dump schemes.

The terms of the settlement volition encounter Michael Brauser, John Stetson, and O'Rourke pay disgorgement, prejudgment interest and civil penalties. The trio volition non admit or deny the allegations laid out in the SEC'due south 2022 enforcement activeness against the trio.

"Microcap fraudsters" settle with SEC

O'Rourke'southward and Stetson volition each have to pay penalties exceeding $i.fifteen million, while Brauser will have to pay roughly $1.17 one thousand thousand.

O'Rourke, O'Rourke'due south company ATG Capital, Brauser, and Brauser'due south Grander Holdings are permanently banned from engaging in all activities relating to penny stock offerings, while Stetson and Stetson Capital Investments are prohibited from involvement in penny stock offering for 10 years.

The estimate also issued a partial ruling against HS Contrarian Investments — a company for which Stetson was the managing manager.

O'Rourke left Riot Blockchain during September 2022 following the SEC'south enforcement action against him. O'Rourke was replaced by Riot's and then-primary operating officer Chris Ensey.

Riot Blockchain investor allegedly masterminded penny stock manipulation

The three individuals and iv companies are the last to settle in the case — which brought charges confronting 10 individuals and 10 corporate entities concerning three alleged pump-and-schemes masterminded by venture backer and Riot Blockchain investor Barry Honig.

The group of 20 individuals and companies allegedly generated more than $27 million in profits through a coordinated manipulation of three microcap penny stocks. The SEC described their actions as comprising "brazen market manipulation" that involved "fleecing innocent investors [who] were left holding virtually worthless stock."

The SEC alleged that Honig orchestrated the acquisition of large sums of penny stock issuers' shares for discounted prices, earlier he and his associates "engaged in illegal promotional activity and manipulative trading to artificially boost each issuer's stock price and to then give the stock the appearance of active trading volume," and so "[dump] their shares into the inflated market."