SEC v. Joseph A. Padilla; and Kevin C. Dills, No. LR-25745, District of Massachusetts (June 14, 2023) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25745 / June 14, 2023 Securities and Exchange Commission v. Padilla, et al., No. 1:23-cv-11331 (D. Mass. filed June 13, 2023) SEC Charges Two Individuals in Connection with Fraudulent Scheme to IIIegally Sell Stock to the Public The SEC today announced charges against California residents Joseph A. Padilla and Kevin C. Dills. According to the SEC's complaint, from at least February 2020 through August 2022, Padilla engaged in a fraudulent scheme to illegally sell stock of several small companies to the public. The complaint alleges that Dills took part in Padilla's scheme with the stock of a company that Dills secretly controlled. According to the complaint, Padilla engaged in a fraudulent scheme for his own benefit and also on behalf of individuals who paid Padilla to arrange their illegal stock sales. The complaint alleges that those individuals hid their identities by selling stock through offshore accounts in different names that Padilla arranged. The complaint further alleges that Padilla traded in his own brokerage account and accounts of family and friends to profit alongside the scheme and to manipulate stock prices in support of the scheme. Padilla also allegedly enlisted a stock trader at a registered broker-dealer firm to facilitate stock trading as part of scheme. According to the complaint, Padilla timed the stock sales to coincide with stock promotions or news announcements intended to gain investor interest. As to Dills, the complaint alleges that Dills secretly controlled Oncology Pharma, Inc., which was one of the companies with stock that was subject to Padilla's scheme. Dills allegedly provided Padilla with Oncology Pharma stock, Padilla then arranged for that stock to be sold to the public, and Padilla then returned approximately $20 million in proceeds to Dills through a circuitous route of foreign bank accounts. The complaint alleges that Padilla and Dills sold Oncology Pharma stock while Dills arranged for Oncology Pharma to issue a series of press releases intended to make the company's stock more appealing to investors. The complaint alleges that Padilla and Dills violated the antifraud provisions of Sections 17(a)(1) and (3) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder, and that they violated the securities registration provisions of Sections 5(a) and (c) of the Securities Act. It also alleges that Dills aided and abetted Padilla's violations of the antifraud provisions. The relief sought by the SEC against Padilla and Dills includes permanent injunctive relief, civil penalties, penny stock bars, disgorgement and prejudgment interest, and other injunctive relief. The complaint also names as relief defendants Bright Star International, Inc., Life Sciences Journeys, Inc. Carlos Hernandez, Jamie Quick, Ashley Robinson, and Arlene Sandoval, alleging that they each received proceeds of the alleged scheme. The complaint seeks disgorgement and prejudgment interest from the relief defendants. In a related criminal case, the U.S. Attorney's Office for the District of Massachusetts brought an indictment against Padilla and Dills on March 21, 2023. The SEC's case is being handled by Ryan Murphy, Michael Moran, Kathleen Shields, and Amy Gwiazda of the Boston Regional Office. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of Massachusetts, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority. The SEC also appreciates the assistance of the Bermuda Monetary Authority, the British Columbia Securities Commission, the Cayman Islands Monetary Authority, the Central Bank of Hungary, the Securities Commission of the Bahamas, the Mauritius Financial Services Commission, the Hong Kong Securities and Futures Commission, Mexico's Comisión Nacional Bancaria y de Valores, the Ontario Securities Commission, and the United Kingdom Financial Conduct Authority. The SEC's investigation is ongoing.

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25745 / June 14, 2023 Securities and Exchange Commission v. Padilla, et al., No. 1:23-cv-11331 (D. Mass. filed June 13, 2023) SEC Charges Two Individuals in Connection with Fraudulent Scheme to IIIegally Sell Stock to the Public The SEC today announced charges against California residents Joseph A. Padilla and Kevin C. Dills. According to the SEC's complaint, from at least February 2020 through August 2022, Padilla engaged in a fraudulent scheme to illegally sell stock of several small companies to the public. The complaint alleges that Dills took part in Padilla's scheme with the stock of a company that Dills secretly controlled. According to the complaint, Padilla engaged in a fraudulent scheme for his own benefit and also on behalf of individuals who paid Padilla to arrange their illegal stock sales. The complaint alleges that those individuals hid their identities by selling stock through offshore accounts in different names that Padilla arranged. The complaint further alleges that Padilla traded in his own brokerage account and accounts of family and friends to profit alongside the scheme and to manipulate stock prices in support of the scheme. Padilla also allegedly enlisted a stock trader at a registered broker-dealer firm to facilitate stock trading as part of scheme. According to the complaint, Padilla timed the stock sales to coincide with stock promotions or news announcements intended to gain investor interest. As to Dills, the complaint alleges that Dills secretly controlled Oncology Pharma, Inc., which was one of the companies with stock that was subject to Padilla's scheme. Dills allegedly provided Padilla with Oncology Pharma stock, Padilla then arranged for that stock to be sold to the public, and Padilla then returned approximately $20 million in proceeds to Dills through a circuitous route of foreign bank accounts. The complaint alleges that Padilla and Dills sold Oncology Pharma stock while Dills arranged for Oncology Pharma to issue a series of press releases intended to make the company's stock more appealing to investors. The complaint alleges that Padilla and Dills violated the antifraud provisions of Sections 17(a)(1) and (3) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder, and that they violated the securities registration provisions of Sections 5(a) and (c) of the Securities Act. It also alleges that Dills aided and abetted Padilla's violations of the antifraud provisions. The relief sought by the SEC against Padilla and Dills includes permanent injunctive relief, civil penalties, penny stock bars, disgorgement and prejudgment interest, and other injunctive relief. The complaint also names as relief defendants Bright Star International, Inc., Life Sciences Journeys, Inc. Carlos Hernandez, Jamie Quick, Ashley Robinson, and Arlene Sandoval, alleging that they each received proceeds of the alleged scheme. The complaint seeks disgorgement and prejudgment interest from the relief defendants. In a related criminal case, the U.S. Attorney's Office for the District of Massachusetts brought an indictment against Padilla and Dills on March 21, 2023. The SEC's case is being handled by Ryan Murphy, Michael Moran, Kathleen Shields, and Amy Gwiazda of the Boston Regional Office. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of Massachusetts, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority. The SEC also appreciates the assistance of the Bermuda Monetary Authority, the British Columbia Securities Commission, the Cayman Islands Monetary Authority, the Central Bank of Hungary, the Securities Commission of the Bahamas, the Mauritius Financial Services Commission, the Hong Kong Securities and Futures Commission, Mexico's Comisión Nacional Bancaria y de Valores, the Ontario Securities Commission, and the United Kingdom Financial Conduct Authority. The SEC's investigation is ongoing.