SEC v. Bernard Findley; and Halitron, Inc., No. 3:20-cv-0397, District of Connecticut (Mar. 20, 2024) — Complaint

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
___________________________________________
)
UNITED STATES SECURITIES AND  )
EXCHANGE COMMISSION,   )
       )
Plaintiff,   )  Civil Action No. ______
)
v.      )
      ) JURY TRIAL DEMANDED
BERNARD FINDLEY and HALITRON, INC.,  )
       )
   Defendants.   )
___________________________________________ )

COMPLAINT
Plaintiff, the United States Securities and Exchange Commission (the “Commission” or
“SEC”), for its complaint against Defendants, Bernard Findley (“Findley”) and Halitron, Inc.
(“Halitron”), hereby alleges as follows:
SUMMARY
1. Between 2016 and 2018, Halitron and Findley defrauded investors by
disseminating false and misleading press releases about Halitron, a business Findley owned and
controlled.  In an effort to attract investment in the company, Findley grossly exaggerated
Halitron’s financial wherewithal, the value of its assets, and its prospects.
2. Halitron and Findley disseminated these false and misleading press releases
between 2016 and 2018 in an attempt to prop up the value of Halitron’s stock and, in turn, to
attract entities (“financiers”) who provided funding to Halitron in exchange for discounted shares
of Halitron stock.  As a result, even though Halitron had scant operations, it was still able to raise
funds.  For instance, in 2017, the year Halitron all but ceased operations, Halitron and Findley
raised nearly half a million dollars.  Instead of funding the company’s operations, however,
Findley used the money Halitron received from the financiers mainly to pay himself, to cover his

2
wife’s credit card bills, and to pay stock promotion fees.  In short, Findley squeezed money out
of Halitron, for his own benefit at the expense of investors whom he misled about the health of
Halitron’s business.
3. As a result of the conduct alleged herein, Defendants have violated, and unless
restrained and enjoined will continue to violate, Section 17(a) of the Securities Act of 1933
(“Securities Act”) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)], and Section 10(b) of the Securities
Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rules 10b-5 thereunder [17
C.F.R. § 340.10b-5].
NATURE OF THE PROCEEDING AND RELIEF SOUGHT
4. The Commission brings this action pursuant to the authority conferred upon it by
Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Section 21(d) of the Exchange Act
[15 U.S.C. 78u(d)].
5. The Commission seeks a permanent injunctions against Defendants, enjoining
them from engaging in the transactions, acts, practices, and courses of business alleged in this
Complaint, disgorgement of all ill-gotten gains from the unlawful conduct set forth in this
Complaint, together with prejudgment interest, civil penalties pursuant to Section 20(d) of the
Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. §
78u(d)(3)].  The Commission further seeks to prohibit Findley from acting as an officer or
director of any public company pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. §
78u(d)(2)], prohibit Findley from participating in any offering of penny stock pursuant to Section
20(g) of the Securities Act [15 U.S.C. § 77t(g)], and Section 21(d)(6) of the Exchange Act [15
U.S.C. § 78u(d)(6)], and such other relief as the Court may deem appropriate.

3
JURISDICTION AND VENUE
 6. This Court has jurisdiction over this action pursuant to Section 22(a) of the
Securities Act [15 U.S.C. § 77v(a)] and Sections 21(d), 21(e), and 27 of the Exchange Act [15
U.S.C. §§ 78u(d), 78u(e), and 78aa].
7. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C.
§ 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa].  Certain of the acts, practices,
and transactions and courses of business alleged in this Complaint occurred within the District of
Connecticut and elsewhere, and were effected, directly or indirectly, by making use of means or
instrumentalities of transportation or communication in interstate commerce, or the mails.
DEFENDANTS
8. Halitron, Inc. is a Nevada corporation with its principal place of business in
Newtown, Connecticut.  Halitron is a self-described “equity holding company” controlled and
operated by Findley.  At all relevant times, Findley was Halitron’s only officer and director, and
its only fulltime employee.  Halitron purports to own various companies in the business of
supplying display signs for businesses and scrapbooking material and services for individuals,
but since at least 2017 has had no significant operations or revenue.  Halitron’s common stock is
quoted and traded on the OTC Link (formerly “Pink Sheets”) operated by OTC Markets Group,
Inc. (“OTC Markets”) under the symbol “HAON.”
9. Bernard Findley, age 47, is a resident of Newtown, Connecticut.  Findley has
been the Chairman and Chief Executive Officer of Halitron since at least 2014.
RELATED PARTIES
10. Company X is a Nevada corporation with its principal place of business in
Newtown, Connecticut.  Company X purports to be a social media company that is also in the

4
business of online data storage.  The company’s services never went live and the company never
had any revenue.  Company X was owned and controlled by Findley and another individual until
early 2018, when the two severed their business relationship.  Company X’s common stock is
quoted and traded on the OTC Link operated by OTC Markets.
FACTS

11. In 2016, Halitron’s business records purport to show that it had approximately
$300,000 in revenue.  In 2017, however, the company stopped generating any revenue.  Around
the same time, Findley increased his efforts to raise money on behalf of Halitron, often to pay
himself and to pay his personal expenses.
12. The majority of Halitron’s financial activities since 2017 involved transactions
with financiers that bought Halitron’s purported debts in exchange for discounted Halitron stock.
This allowed Halitron to reduce its purported debt obligations and receive cash.  The financiers
then sold the discounted Halitron shares into the public securities markets at a higher share price.
13. To facilitate these debt financing transactions, Halitron and Findley set out to
make Halitron’s stock appealing to the financiers by making it easier for them to sell the stock
into the public securities markets at higher share prices.  In an attempt to create and increase
liquidity for Halitron stock, Halitron and Findley continued to promote Halitron’s stock even as
the company’s operations and revenue dwindled.  Between 2016 and 2018, the company took in
about $555,000 from debt financing transactions, of which Findley funneled over half to himself
by transfers into his personal bank account and payments towards his wife’s credit card debt.
14. While in control of Halitron, Findley wrote and published numerous press
releases that contained false and/or misleading information about the company’s finances and
operations.  The press releases included grossly inaccurate and, in some instances, wholly

5
fabricated, information.  The press releases were broadly disseminated to investors through
Halitron’s website, the media, and at least one paid stock promoter.  Individually and
collectively, the press releases created the impression that Halitron had the aspiration and ability
to grow its operations and revenue.  In fact, the company had little to no operations, had no
fulltime employees, had virtually no revenue, and had no immediate prospects.
15. Each of the false and misleading statements detailed below was material as each
created the impression that Halitron was an operating business with value and future prospects,
when in fact it had neither.  A reasonable investor would certainly find it important to know that
Halitron and Findley were grossly misrepresenting the extent of the company’s financial
wherewithal, operations,  and future prospects when making a decision to invest in Halitron.
16.  Defendants’ false and misleading public statements about Halitron fell into four
categories:
Defendants’ False and Misleading Statements about Halitron’s Financing.
17. On July 7, 2016, Halitron and Findley disseminated a press release stating that
Halitron had finalized plans for a $300,000 debt financing (meaning Halitron would receive a
loan of $300,000) at an interest rate of 6% per year (meaning Halitron would pay 6% interest to
the lender) so long as certain stock price milestones were met in the fiscal quarter ending
September 30, 2016.  The press release further stated that the company planned to use the
funding “to accelerate sales and jump-start the factory” to achieve the goal of “$3 - $5 million in
sales” for 2016.
18. The July 7, 2016 press release omitted that the actual term of the note stated that
the total sum was “up to $300,000” (emphasis added) rather than a guarantee to the full
$300,000, and that funding was not guaranteed but was “at the sole discretion” of the lender even

6
if those stock price milestones were achieved.  The press release also understated the actual
interest rate that Halitron would pay on the loan, which was 8%, not 6%.  In fact, the lender
ended up only providing Halitron with funding of $20,000, a tiny fraction of the amount boasted
in the press release.  The press release therefore misstated both the terms and size of the
financing, and created a false impression as to the Halitron’s financial wherewithal and future
prospects.  Neither Halitron nor Findley ever issued a public statement correcting these false and
misleading statements.
Defendants’ False and Misleading Statements about Halitron’s Financial Audit.
19. In late 2016, Findley engaged an accounting firm to audit Halitron’s financial
statements.  In May 2017, Halitron announced publicly that its audit was near completion and
that the company planned to become an SEC reporting public company.  Later, Halitron
announced that instead of becoming an SEC reporting company, it would seek to list its stock on
a higher-tiered service on OTC Markets when the audit was completed.
20. On December 11, 2017, Halitron and Findley disseminated a press release stating
that Halitron’s financial audit was still underway.  In reality, around the time of this release,
Halitron had abandoned the endeavor, partly due to its inability to pay the auditor and partly due
to the poor condition of Halitron’s financial records.  No audit was completed in 2017.
21. In 2018, Halitron and Findley continued to mislead investors about Halitron’s
purported audit.  In a press release dated January 16, 2018, Halitron and Findley stated that
Halitron was “completing the audit.”  A month and half later on February 28, 2018, Halitron and
Findley disseminated another press release stating that an audit would “commence quickly.”  In
reality, the audit efforts had already been abandoned in late 2017, as Findley had stopped
communicating with Halitron’s auditor.  No further audit work was conducted or completed in

7
2018.  Yet, Halitron and Findley issued an April 25, 2018 press release again falsely stating that
the company was in the process of finalizing its financial audit.  Therefore, the various press
releases concerning Halitron’s financial audit were false and misleading.
Defendants’ False and Misleading Statements Concerning Halitron’s Stock Buyback
Program.
22. In 2017 and 2018, Halitron and Findley promoted Halitron’s stock by claiming
that Halitron planned to implement a stock buyback plan to reacquire stock from its
shareholders.  On October 30, 2017, Halitron and Findley disseminated a press release stating
that Halitron’s management and board of directors had agreed to allow the company to engage in
a stock buyback program to “increase shareholder value[.]”  In his position as the sole board
member and officer of Halitron, Findley had not created any plan for a stock buyback program.
Halitron’s April 25, 2018 press release regurgitated the misrepresentation about a stock buyback
program, and Halitron did not repurchase any significant amount of stock from its shareholders
at or near the time of the press releases.  The press releases were therefore false and misleading
insofar as they created the false impression that Halitron had a plan for, or was engaged in, a
stock buyback program for the benefit of investors.

Defendants’ False and Misleading Statements about Halitron’s Assets.
23. While Halitron’s business operations dwindled, Halitron and Findley made false
and misleading statements concerning the value of company assets.  On July 18, 2017, Halitron
and Findley issued a press release concerning an anticipated stock transaction with Company X,
a company Findley partially owned and over which he exerted control at all times Halitron
issued press releases about Company X.  Halitron and Findley represented that the stock
transaction involved Company X purchasing a purported asset from Halitron in exchange for

8
Company X stock.  The press release stated that the transaction was valued at more than $3
million.
24. The   July 18, 2017 press release grossly inflated the value of the purported deal,
which involved no valuable assets and could not support a valuation anywhere near the $3
million that Halitron and Findley claimed in the press release.  Further, at the time of the press
release, Findley knew, or was reckless in not knowing, that Company X was a new company
with no revenue and very little funding.  Company X stock, therefore,  could not support the $3
million deal valuation Halitron and Findley touted.
25. On December 4, 2017, Halitron and Findley disseminated a press release again
highlighting Halitron’s purported ownership of $3 million in Company X stock.  According to
the press release, aside from this purported interest in a fledgling company Findley also
controlled, Halitron’s other assets were unspecified “goodwill” associated with the other
companies that Halitron purportedly owned.  Findley, without any explanation, estimated the
“goodwill” to be worth $1.4 million.  Indeed, some of the companies Findley referenced barely
had any operations at the time and Halitron did not even own one of them.  In any event, none
had sufficient operations to support Halitron and Findley’s purported valuation.
26. About two weeks later, on December 14, 2017, Halitron and Findley disseminated
a press release again boasting about Halitron’s ownership of Company X stock, and representing
that this purported ownership interest entitled Halitron to a dividend payment of $3 million in
2020.  The release further stated that once Halitron received the $3 million payment, Halitron
planned to pay a cash dividend to its shareholders.  At the time of the release, Findley was still a
co-owner and the “chairman” of Company X and therefore knew, or was reckless in not

9
knowing, that Company X, a company with no revenue and extremely limited operations, had no
plans (and no financial ability) or reasonable prospect to make such a payment.
27. The misstatements concerning Halitron’s purported $3 million interest in
Company X continued into 2018.  On January 22, 2018, Halitron and Findley disseminated a
press release stating that Halitron had received a $3 million promissory note from Company X
with an interest rate of 4% (meaning Company X owed $3 million to Halitron and would pay 4%
interest to Halitron on this debt).  The press release omitted that Findley had executed the note in
question as the agent for both companies without the knowledge and consent of Company X’s
other owner, and that, as a result, Company X disputes the validity of the note.  Further, as
Findley knew or was reckless in not knowing, at the time, Company X had virtually no
operations and no prospects of raising money to pay Halitron such a large sum of money.
First Claim for Relief
FRAUD IN THE OFFER OR SALE OF SECURITIES AGAINST THE DEFENDANTS
(Violations of Section 17(a) of the Securities Act)
Paragraphs 1 through 27 are re-alleged and incorporated by reference.
28. By reason of the conduct described above, Defendants, in connection with the
offer or sale of securities, by the use of the means or instrumentalities of interstate commerce or
of the mails, directly or indirectly, acting knowingly, recklessly, or, as to (ii) and (iii),
negligently (i) employed devices, schemes, or artifices to defraud; (ii) obtained money or
property by means of untrue statements of material facts and omissions to state material facts
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading; and (iii) engaged in acts, practices, or courses of business which
operated or would operate as a fraud or deceit upon any persons, including purchasers or sellers
of the securities.

10
29. By reason of the conduct described above, Defendants violated Securities Act
Sections 17(a) [15 U.S.C. § 77q(a)].
Second Claim for Relief
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES
AGAINST THE DEFENDANTS
(Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder)
Paragraphs 1 through 29 are re-alleged and incorporated by reference.
30. By reason of the conduct described above, Defendants, directly or indirectly, in
connection with the purchase or sale of securities, by the use of the means or instrumentalities of
interstate commerce or of the mails, or of any facility of any national securities exchange,
knowingly or recklessly, (i) employed devices, schemes, or artifices to defraud; (ii) made untrue
statements of a material fact or omitted to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made, not misleading;
and (iii) engaged in acts, practices, or courses of business which operated or would operate as a
fraud or deceit upon any persons, including purchasers or sellers of the securities.
31. By reason of the conduct described above, Defendants violated Exchange Act
Section 10(b) [15 U.S.C. § 78j(b)] Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder.
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court enter a Final
Judgment:
A. Permanently restraining and enjoining the Defendants, their officers, agents,
servants, employees and attorneys, and those persons in active concert or participation with them
who receive actual notice of the injunction by personal service or otherwise, and each of them,
from violating Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], and Section 10(b) of the
Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5];

11
B. Ordering the Defendants pay disgorgement plus prejudgment interest of all ill-
gotten gains obtained by reason of the unlawful conduct alleged in this Complaint;
C. Ordering the Defendants to each pay civil monetary penalties pursuant to Section
20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15
U.S.C. § 78u(d)(3)];
D. Enter an order pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. §
78u(d)(2)] prohibiting Findley from acting as an officer or director of any issuer that has a class
of securities registered pursuant to Section12 of the Exchange Act [ 15 U.S.C. § 78l] or that is
required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)];
E. Enter an Order prohibiting Findley from participating in any offering of penny
stock pursuant to Section 20(g) of the Securities Act [15 U.S.C. § 77t(g)], and Section 21(d)(6)
of the Exchange Act [15 U.S.C. § 78u(d)(6)]; and
F. Granting such other and further relief as this Court may deem just and proper.

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JURY DEMAND
The Commission demands a jury in this matter.
DATED:  March 25, 2020.

      Respectfully submitted,
UNITED STATES SECURITIES AND
EXCHANGE C OMMISSION

      By its attorneys,

/s/ Alfred A. Day
Alfred A. Day (Mass. BBO No. 654436)
Xinyue Angela Lin (Mass. BBO No. 672786)
Martin F. Healey (Mass. BBO No. 227550)
Boston Regional Offi   ce
33 Arch Street, 24th F loor
Boston, Massachusetts  02110
(617) 573-8900 (Main)
(617) 573-4590 (Facsimile)
daya@ sec.gov (Day)
[email protected] (Lin)
[email protected] (Healey)

Local Counsel:

John B. Hughe  s (   Fed. Bar No. CT 05289)
Assistant United States Attorne  y
Chief, Civil Division
United States Attorne  y’s Offi   ce
Connecticut Financ  ial Center

157 Church Street, 23
rd
Floor
New Haven, CT 06510
(203) 821-3700
(203) 773-5373 (Facsimile)

UNITED STATES DISTRICT COURT 
DISTRICT OF CONNECTICUT 

___________________________________________ 
) 

UNITED STATES SECURITIES AND  )  
EXCHANGE COMMISSION,   ) 
       )   

Plaintiff,   )  Civil Action No. ______ 
)   

v.      ) 
      ) JURY TRIAL DEMANDED  

BERNARD FINDLEY and HALITRON, INC.,  )   
       ) 
   Defendants.   )   
___________________________________________ ) 
 

COMPLAINT 

Plaintiff, the United States Securities and Exchange Commission (the “Commission” or 

“SEC”), for its complaint against Defendants, Bernard Findley (“Findley”) and Halitron, Inc. 

(“Halitron”), hereby alleges as follows: 

SUMMARY   

1. Between 2016 and 2018, Halitron and Findley defrauded investors by 

disseminating false and misleading press releases about Halitron, a business Findley owned and 

controlled.  In an effort to attract investment in the company, Findley grossly exaggerated 

Halitron’s financial wherewithal, the value of its assets, and its prospects.   

2. Halitron and Findley disseminated these false and misleading press releases 

between 2016 and 2018 in an attempt to prop up the value of Halitron’s stock and, in turn, to 

attract entities (“financiers”) who provided funding to Halitron in exchange for discounted shares 

of Halitron stock.  As a result, even though Halitron had scant operations, it was still able to raise 

funds.  For instance, in 2017, the year Halitron all but ceased operations, Halitron and Findley 

raised nearly half a million dollars.  Instead of funding the company’s operations, however, 

Findley used the money Halitron received from the financiers mainly to pay himself, to cover his 

Case 3:20-cv-00397   Document 1   Filed 03/25/20   Page 1 of 12



2 

wife’s credit card bills, and to pay stock promotion fees.  In short, Findley squeezed money out 

of Halitron, for his own benefit at the expense of investors whom he misled about the health of 

Halitron’s business.   

3. As a result of the conduct alleged herein, Defendants have violated, and unless 

restrained and enjoined will continue to violate, Section 17(a) of the Securities Act of 1933 

(“Securities Act”) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)], and Section 10(b) of the Securities 

Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rules 10b-5 thereunder [17 

C.F.R. § 340.10b-5].   

NATURE OF THE PROCEEDING AND RELIEF SOUGHT 

4. The Commission brings this action pursuant to the authority conferred upon it by 

Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Section 21(d) of the Exchange Act 

[15 U.S.C. 78u(d)].   

5. The Commission seeks a permanent injunctions against Defendants, enjoining 

them from engaging in the transactions, acts, practices, and courses of business alleged in this 

Complaint, disgorgement of all ill-gotten gains from the unlawful conduct set forth in this 

Complaint, together with prejudgment interest, civil penalties pursuant to Section 20(d) of the 

Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 

78u(d)(3)].  The Commission further seeks to prohibit Findley from acting as an officer or 

director of any public company pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 

78u(d)(2)], prohibit Findley from participating in any offering of penny stock pursuant to Section 

20(g) of the Securities Act [15 U.S.C. § 77t(g)], and Section 21(d)(6) of the Exchange Act [15 

U.S.C. § 78u(d)(6)], and such other relief as the Court may deem appropriate. 

 

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3 

JURISDICTION AND VENUE 

 6. This Court has jurisdiction over this action pursuant to Section 22(a) of the 

Securities Act [15 U.S.C. § 77v(a)] and Sections 21(d), 21(e), and 27 of the Exchange Act [15 

U.S.C. §§ 78u(d), 78u(e), and 78aa]. 

7. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C. 

§ 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa].  Certain of the acts, practices, 

and transactions and courses of business alleged in this Complaint occurred within the District of 

Connecticut and elsewhere, and were effected, directly or indirectly, by making use of means or 

instrumentalities of transportation or communication in interstate commerce, or the mails.  

DEFENDANTS 

8. Halitron, Inc. is a Nevada corporation with its principal place of business in 

Newtown, Connecticut.  Halitron is a self-described “equity holding company” controlled and 

operated by Findley.  At all relevant times, Findley was Halitron’s only officer and director, and 

its only fulltime employee.  Halitron purports to own various companies in the business of 

supplying display signs for businesses and scrapbooking material and services for individuals, 

but since at least 2017 has had no significant operations or revenue.  Halitron’s common stock is 

quoted and traded on the OTC Link (formerly “Pink Sheets”) operated by OTC Markets Group, 

Inc. (“OTC Markets”) under the symbol “HAON.”   

9. Bernard Findley, age 47, is a resident of Newtown, Connecticut.  Findley has 

been the Chairman and Chief Executive Officer of Halitron since at least 2014.   

RELATED PARTIES 

10. Company X is a Nevada corporation with its principal place of business in 

Newtown, Connecticut.  Company X purports to be a social media company that is also in the 

Case 3:20-cv-00397   Document 1   Filed 03/25/20   Page 3 of 12



4 

business of online data storage.  The company’s services never went live and the company never 

had any revenue.  Company X was owned and controlled by Findley and another individual until 

early 2018, when the two severed their business relationship.  Company X’s common stock is 

quoted and traded on the OTC Link operated by OTC Markets.   

FACTS  

11. In 2016, Halitron’s business records purport to show that it had approximately 

$300,000 in revenue.  In 2017, however, the company stopped generating any revenue.  Around 

the same time, Findley increased his efforts to raise money on behalf of Halitron, often to pay 

himself and to pay his personal expenses.   

12. The majority of Halitron’s financial activities since 2017 involved transactions 

with financiers that bought Halitron’s purported debts in exchange for discounted Halitron stock.  

This allowed Halitron to reduce its purported debt obligations and receive cash.  The financiers 

then sold the discounted Halitron shares into the public securities markets at a higher share price. 

13. To facilitate these debt financing transactions, Halitron and Findley set out to 

make Halitron’s stock appealing to the financiers by making it easier for them to sell the stock 

into the public securities markets at higher share prices.  In an attempt to create and increase 

liquidity for Halitron stock, Halitron and Findley continued to promote Halitron’s stock even as 

the company’s operations and revenue dwindled.  Between 2016 and 2018, the company took in 

about $555,000 from debt financing transactions, of which Findley funneled over half to himself 

by transfers into his personal bank account and payments towards his wife’s credit card debt.   

14. While in control of Halitron, Findley wrote and published numerous press 

releases that contained false and/or misleading information about the company’s finances and 

operations.  The press releases included grossly inaccurate and, in some instances, wholly 

Case 3:20-cv-00397   Document 1   Filed 03/25/20   Page 4 of 12



5 

fabricated, information.  The press releases were broadly disseminated to investors through 

Halitron’s website, the media, and at least one paid stock promoter.  Individually and 

collectively, the press releases created the impression that Halitron had the aspiration and ability 

to grow its operations and revenue.  In fact, the company had little to no operations, had no 

fulltime employees, had virtually no revenue, and had no immediate prospects.   

15. Each of the false and misleading statements detailed below was material as each 

created the impression that Halitron was an operating business with value and future prospects, 

when in fact it had neither.  A reasonable investor would certainly find it important to know that 

Halitron and Findley were grossly misrepresenting the extent of the company’s financial 

wherewithal, operations, and future prospects when making a decision to invest in Halitron. 

16.  Defendants’ false and misleading public statements about Halitron fell into four 

categories: 

Defendants’ False and Misleading Statements about Halitron’s Financing. 

17. On July 7, 2016, Halitron and Findley disseminated a press release stating that 

Halitron had finalized plans for a $300,000 debt financing (meaning Halitron would receive a 

loan of $300,000) at an interest rate of 6% per year (meaning Halitron would pay 6% interest to 

the lender) so long as certain stock price milestones were met in the fiscal quarter ending 

September 30, 2016.  The press release further stated that the company planned to use the 

funding “to accelerate sales and jump-start the factory” to achieve the goal of “$3 - $5 million in 

sales” for 2016.   

18. The July 7, 2016 press release omitted that the actual term of the note stated that 

the total sum was “up to $300,000” (emphasis added) rather than a guarantee to the full 

$300,000, and that funding was not guaranteed but was “at the sole discretion” of the lender even 

Case 3:20-cv-00397   Document 1   Filed 03/25/20   Page 5 of 12



6 

if those stock price milestones were achieved.  The press release also understated the actual 

interest rate that Halitron would pay on the loan, which was 8%, not 6%.  In fact, the lender 

ended up only providing Halitron with funding of $20,000, a tiny fraction of the amount boasted 

in the press release.  The press release therefore misstated both the terms and size of the 

financing, and created a false impression as to the Halitron’s financial wherewithal and future 

prospects.  Neither Halitron nor Findley ever issued a public statement correcting these false and 

misleading statements.   

Defendants’ False and Misleading Statements about Halitron’s Financial Audit. 

19. In late 2016, Findley engaged an accounting firm to audit Halitron’s financial 

statements.  In May 2017, Halitron announced publicly that its audit was near completion and 

that the company planned to become an SEC reporting public company.  Later, Halitron 

announced that instead of becoming an SEC reporting company, it would seek to list its stock on 

a higher-tiered service on OTC Markets when the audit was completed. 

20. On December 11, 2017, Halitron and Findley disseminated a press release stating 

that Halitron’s financial audit was still underway.  In reality, around the time of this release, 

Halitron had abandoned the endeavor, partly due to its inability to pay the auditor and partly due 

to the poor condition of Halitron’s financial records.  No audit was completed in 2017.   

21. In 2018, Halitron and Findley continued to mislead investors about Halitron’s 

purported audit.  In a press release dated January 16, 2018, Halitron and Findley stated that 

Halitron was “completing the audit.”  A month and half later on February 28, 2018, Halitron and 

Findley disseminated another press release stating that an audit would “commence quickly.”  In 

reality, the audit efforts had already been abandoned in late 2017, as Findley had stopped 

communicating with Halitron’s auditor.  No further audit work was conducted or completed in 

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7 

2018.  Yet, Halitron and Findley issued an April 25, 2018 press release again falsely stating that 

the company was in the process of finalizing its financial audit.  Therefore, the various press 

releases concerning Halitron’s financial audit were false and misleading. 

Defendants’ False and Misleading Statements Concerning Halitron’s Stock Buyback 
Program. 

22. In 2017 and 2018, Halitron and Findley promoted Halitron’s stock by claiming 

that Halitron planned to implement a stock buyback plan to reacquire stock from its 

shareholders.  On October 30, 2017, Halitron and Findley disseminated a press release stating 

that Halitron’s management and board of directors had agreed to allow the company to engage in 

a stock buyback program to “increase shareholder value[.]”  In his position as the sole board 

member and officer of Halitron, Findley had not created any plan for a stock buyback program.  

Halitron’s April 25, 2018 press release regurgitated the misrepresentation about a stock buyback 

program, and Halitron did not repurchase any significant amount of stock from its shareholders 

at or near the time of the press releases.  The press releases were therefore false and misleading 

insofar as they created the false impression that Halitron had a plan for, or was engaged in, a 

stock buyback program for the benefit of investors.   

Defendants’ False and Misleading Statements about Halitron’s Assets. 

23. While Halitron’s business operations dwindled, Halitron and Findley made false 

and misleading statements concerning the value of company assets.  On July 18, 2017, Halitron 

and Findley issued a press release concerning an anticipated stock transaction with Company X, 

a company Findley partially owned and over which he exerted control at all times Halitron 

issued press releases about Company X.  Halitron and Findley represented that the stock 

transaction involved Company X purchasing a purported asset from Halitron in exchange for 

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8 

Company X stock.  The press release stated that the transaction was valued at more than $3 

million.   

24. The July 18, 2017 press release grossly inflated the value of the purported deal, 

which involved no valuable assets and could not support a valuation anywhere near the $3 

million that Halitron and Findley claimed in the press release.  Further, at the time of the press 

release, Findley knew, or was reckless in not knowing, that Company X was a new company 

with no revenue and very little funding.  Company X stock, therefore, could not support the $3 

million deal valuation Halitron and Findley touted. 

25. On December 4, 2017, Halitron and Findley disseminated a press release again 

highlighting Halitron’s purported ownership of $3 million in Company X stock.  According to 

the press release, aside from this purported interest in a fledgling company Findley also 

controlled, Halitron’s other assets were unspecified “goodwill” associated with the other 

companies that Halitron purportedly owned.  Findley, without any explanation, estimated the 

“goodwill” to be worth $1.4 million.  Indeed, some of the companies Findley referenced barely 

had any operations at the time and Halitron did not even own one of them.  In any event, none 

had sufficient operations to support Halitron and Findley’s purported valuation.   

26. About two weeks later, on December 14, 2017, Halitron and Findley disseminated 

a press release again boasting about Halitron’s ownership of Company X stock, and representing 

that this purported ownership interest entitled Halitron to a dividend payment of $3 million in 

2020.  The release further stated that once Halitron received the $3 million payment, Halitron 

planned to pay a cash dividend to its shareholders.  At the time of the release, Findley was still a 

co-owner and the “chairman” of Company X and therefore knew, or was reckless in not 

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9 

knowing, that Company X, a company with no revenue and extremely limited operations, had no 

plans (and no financial ability) or reasonable prospect to make such a payment.  

27. The misstatements concerning Halitron’s purported $3 million interest in 

Company X continued into 2018.  On January 22, 2018, Halitron and Findley disseminated a 

press release stating that Halitron had received a $3 million promissory note from Company X 

with an interest rate of 4% (meaning Company X owed $3 million to Halitron and would pay 4% 

interest to Halitron on this debt).  The press release omitted that Findley had executed the note in 

question as the agent for both companies without the knowledge and consent of Company X’s 

other owner, and that, as a result, Company X disputes the validity of the note.  Further, as 

Findley knew or was reckless in not knowing, at the time, Company X had virtually no 

operations and no prospects of raising money to pay Halitron such a large sum of money.   

First Claim for Relief 

FRAUD IN THE OFFER OR SALE OF SECURITIES AGAINST THE DEFENDANTS 
(Violations of Section 17(a) of the Securities Act) 

Paragraphs 1 through 27 are re-alleged and incorporated by reference. 

28. By reason of the conduct described above, Defendants, in connection with the 

offer or sale of securities, by the use of the means or instrumentalities of interstate commerce or 

of the mails, directly or indirectly, acting knowingly, recklessly, or, as to (ii) and (iii), 

negligently (i) employed devices, schemes, or artifices to defraud; (ii) obtained money or 

property by means of untrue statements of material facts and omissions to state material facts 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading; and (iii) engaged in acts, practices, or courses of business which 

operated or would operate as a fraud or deceit upon any persons, including purchasers or sellers 

of the securities.   

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10 

29. By reason of the conduct described above, Defendants violated Securities Act 

Sections 17(a) [15 U.S.C. § 77q(a)]. 

Second Claim for Relief 

FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES 
AGAINST THE DEFENDANTS 

(Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder) 

Paragraphs 1 through 29 are re-alleged and incorporated by reference. 

30. By reason of the conduct described above, Defendants, directly or indirectly, in 

connection with the purchase or sale of securities, by the use of the means or instrumentalities of 

interstate commerce or of the mails, or of any facility of any national securities exchange, 

knowingly or recklessly, (i) employed devices, schemes, or artifices to defraud; (ii) made untrue 

statements of a material fact or omitted to state a material fact necessary in order to make the 

statements made, in the light of the circumstances under which they were made, not misleading; 

and (iii) engaged in acts, practices, or courses of business which operated or would operate as a 

fraud or deceit upon any persons, including purchasers or sellers of the securities. 

31. By reason of the conduct described above, Defendants violated Exchange Act 

Section 10(b) [15 U.S.C. § 78j(b)] Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court enter a Final 

Judgment: 

A. Permanently restraining and enjoining the Defendants, their officers, agents, 

servants, employees and attorneys, and those persons in active concert or participation with them 

who receive actual notice of the injunction by personal service or otherwise, and each of them, 

from violating Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], and Section 10(b) of the 

Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5]; 

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11 

B. Ordering the Defendants pay disgorgement plus prejudgment interest of all ill-

gotten gains obtained by reason of the unlawful conduct alleged in this Complaint; 

C. Ordering the Defendants to each pay civil monetary penalties pursuant to Section 

20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 

U.S.C. § 78u(d)(3)];  

D. Enter an order pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 

78u(d)(2)] prohibiting Findley from acting as an officer or director of any issuer that has a class 

of securities registered pursuant to Section12 of the Exchange Act [ 15 U.S.C. § 78l] or that is 

required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)];  

E. Enter an Order prohibiting Findley from participating in any offering of penny 

stock pursuant to Section 20(g) of the Securities Act [15 U.S.C. § 77t(g)], and Section 21(d)(6) 

of the Exchange Act [15 U.S.C. § 78u(d)(6)]; and 

F. Granting such other and further relief as this Court may deem just and proper. 

  

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12 

JURY DEMAND 

The Commission demands a jury in this matter. 

DATED:  March 25, 2020. 
 
      Respectfully submitted, 

UNITED STATES SECURITIES AND 
EXCHANGE COMMISSION 

 
      By its attorneys, 
 
 

/s/ Alfred A. Day     
Alfred A. Day (Mass. BBO No. 654436) 
Xinyue Angela Lin (Mass. BBO No. 672786) 
Martin F. Healey (Mass. BBO No. 227550) 
Boston Regional Office 
33 Arch Street, 24th Floor 
Boston, Massachusetts  02110 
(617) 573-8900 (Main) 
(617) 573-4590 (Facsimile) 
daya@ sec.gov (Day) 
[email protected] (Lin) 
[email protected] (Healey) 
 
Local Counsel: 
 
John B. Hughes (Fed. Bar No. CT 05289) 
Assistant United States Attorney 
Chief, Civil Division 
United States Attorney’s Office 
Connecticut Financial Center 
157 Church Street, 23rd Floor 
New Haven, CT 06510 
(203) 821-3700 
(203) 773-5373 (Facsimile)  

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