SEC v. Eleazar Kauderer, No. 1:23-cv-04099, Southern District of New York (May 24, 2023) — Complaint

ANTONIA M. APPS
REGIONAL DIRECTOR
Thomas P. Smith, Jr.
Adam S. Grace
Paul G. Gizzi
Brenda Wai Ming Chang
John C. Lehmann
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, NY  10004-2616
212-336-0077 (Gizzi)
Email: [email protected]

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE
COMMISSION,

                                             Plaintiff,

                        -against-

Eleazar Kauderer,

                                             Defendant.

COMPLAINT

23 Civ. _____ (       )

JURY TRIAL DEMANDED

Plaintiff Securities and Exchange Commission (“Commission” or “SEC”), for its
Complaint against Defendant Eleazar Kauderer (“Kauderer” or “Defendant”), alleges as follows:
SUMMARY
1. This action concerns Kauderer’s participation in a fraudulent scheme to promote
the stock of a struggling microcap issuer from at least July 2017 to at least November 2019.
2. In August 2021, the Commission filed a related action concerning the same
fraudulent scheme to promote the microcap issuer’s stock, SEC v. GPL Ventures LLC, et al., 21-
cv-6814 (AKH) (S.D.N.Y.) (the “Related SEC Action”).

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3. The complaint in the Related SEC Action described how Kauderer helped the
struggling microcap issuer and the other defendants (the “Related SEC Action Defendants,”
identified below) carry out a
lucrative, secret scheme to promote the microcap issuer’s stock.
4. Specifically, the complaint in the Related SEC action alleged that Kauderer
(identified therein as “Individual A”) participated in the scheme to facilitate certain defendants:
(i) acquiring shares of the microcap issuer’s stock for their own benefit prior to recommending or
touting the stock to others; (ii)  failing to disclose in the tout the full details of their ownership of the
shares and their plans to sell them; and (iii) selling the shares following the tout’s dissemination, and
into the increased share price and trading volume triggered by the touting.

5. As alleged further below, and in the Related SEC Action, Kauderer knowingly
participated in the scheme by orchestrating fraudulent promotional campaigns.  As Kauderer
understood, the Related SEC Action Defendants needed the promotional campaigns to facilitate
the scheme.  Further, the promotional campaigns concealed the fact that certain of the Related
SEC Action Defendants funded the promotions.
VIOLATIONS
6. By virtue of the foregoing conduct and as alleged further herein, Kauderer has
violated Sections 17(a)(1) and (3) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C.
§§ 77q(a)(1) and (3)], and Section 10(b) [15 U.S.C. § 78j(b)] of the Securities Exchange Act of
1934 (“Exchange Act”) and Rules 10b-5(a) and (c) thereunder [17 C.F.R. §§ 240.10b-5(a) and
(c)].
7. Unless Kauderer is restrained and enjoined, he will engage in the acts, practices,
transactions, and courses of business set forth in this Complaint or in acts, practices, transactions,
and courses of business of similar type and object.

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NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
8. The Commission brings this action pursuant to the authority conferred upon it by
Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)] and Exchange Act
Section 21(d) [15 U.S.C. § 78u(d)].
9. The Commission seeks a final judgment: (a) permanently enjoining Kauderer
from violating the federal securities laws and rules this Complaint alleges he has violated;
(b) ordering Kauderer to disgorge all ill-gotten gains he received as a result of the violations
alleged herein and to pay prejudgment interest thereon, pursuant to Exchange Act Sections
21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78(u)(d)(5), and 78u(d)(7)];
(c) permanently prohibiting Kauderer from participating in any offering of a penny stock,
pursuant to Securities Act Section 20(g) [15 U.S.C. § 77t(g)] and Exchange Act Section 21(d)(6)
[15 U.S.C. § 78u(d)(6)]; and (d) ordering any other and further relief the Court may deem just
and proper.
JURISDICTION AND VENUE
10. This Court has jurisdiction over this action pursuant to Securities Act Section
22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].
11. Kauderer, directly and indirectly, has made use of the means or instrumentalities
of interstate commerce or of the mails in connection with the transactions, acts, practices, and
courses of business alleged herein.
12. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)]
and Exchange Act Section 27 [15 U.S.C. § 78aa].  Certain of the acts, practices, transactions, and
courses of business alleged in this Complaint occurred within this District, including Kauderer
orchestrating promotional work for the struggling microcap issuer, which is headquartered in

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New York, and communicating with other Related SEC Action Defendants, including entities
headquartered in New York.
DEFENDANT
13. Kauderer, age 48, resides in Englewood Cliffs, New Jersey.  Kauderer,
individually and through entities he owns or operates, is in the business of providing stock
promotional services to microcap issuers.  He has held Series 7 and 63 securities licenses, which
are now expired.  He was a registered representative at several registered broker-dealers from
2000 through 2004.  In 2003, Kauderer pled guilty to conspiracy to commit mail and wire fraud,
and was sentenced to a two year prison term.  United States v. Graziano, et al., 02-cr-60049
(S.D. Fla.; criminal minute Jan. 23, 2003; judgment entered Apr. 8, 2004).
RELATED SEC ACTION DEFENDANTS
14. The Related SEC Action Defendants, named as defendants in the Related SEC
Action, are: (i) GPL Ventures LLC, GPL Management LLC, Alexander J. Dillon (“Dillon”), and
Cosmin I. Panait (collectively, the “GPL Defendants”); (ii) Lawrence B. Adams (“Adams”), now
deceased, and his entity Seaside Advisors, LLC (“Seaside”); and (iii) HempAmericana, Inc.
(“HempAmericana”), the struggling microcap issuer, and its CEO Salvador E. Rosillo
(“Rosillo”).  During the period of time relevant to the allegations in this action and in the Related
SEC Action: (i) the GPL Defendants were in the business of privately acquiring and publicly
selling the securities of microcap issuers; (ii) Seaside, owned by Adams, purportedly provided
consulting services to various microcap companies to assist with, among other things, marketing,
public relations, and general business advice; and (ii) HempAmericana (ticker OTC BB:
HMPQ), through its CEO Rosillo, purportedly researched, developed, and sold products made of
industrial hemp, including cannabidiol (or CBD) oil.

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FAC TS
THE HEMPAMERICANA FRAUD SCHEME
15. From 2017 through 2019, Kauderer, together with the Related SEC Action
Defendants, engaged in a fraudulent scheme involving the stock of the struggling microcap
issuer, HempAmericana.
16. The HempAmericana scheme can be summarized as follows: (1) the GPL
Defendants repeatedly acquired HempAmericana stock, purportedly sold pursuant to the
Regulation A registration exemption, conditioned on a portion of the stock sales proceeds being
sent by HempAmericana to Seaside; (2) Seaside then paid Kauderer, a professional stock
promoter, to promote the stock; (3) Kauderer hired promoters who in turn hired other promoters,
to assist with promoting the stock; and (4) the GPL Defendants sold the HempAmericana stock
they held during the promotional campaigns.
17. The HempAmericana promotional campaigns were fraudulent because they did
not disclose: (i) that the promotions were indirectly funded by the issuer, HempAmericana, using
proceeds received from the GPL Defendants, the most significant purchaser in
HempAmericana’s Regulation A offerings, which funds the GPL Defendants had ear-marked to
fund the promotional campaigns; or (ii) that the GPL Defendants intended to sell their large
stock holdings during the promotions.
18. HempAmericana’s Regulation A offering circulars misleadingly failed to disclose
that significant portions of the stock sales proceeds would be used for stock promotion.
A. The GPL Defendants’ Share Acquisitions in HempAmericana Prior to
Kauderer’s Promotion

19. HempAmericana, a struggling microcap CBD company with a factory and
equipment aimed at processing, bottling, and selling hemp-based products, had never been

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profitable since its incorporation in February 2014.  Indeed, from 2017 through May 2020,
HempAmericana generated a mere $9,727 in revenues.  Disclosure statements filed on
OTCMarkets’ website noted that the company had to raise funds in order to finance operations.
20. HempAmericana stopped filing financial information with OTCMarkets in July
2020, and its stock was quoted with a “STOP” sign, an OTCMarkets designation denoting
companies “that may not be able or willing to provide current disclosure to the public markets.”
21. In June 2017, HempAmericana began issuing and selling unrestricted Regulation
A shares to the GPL Defendants.  From July 2017 to November 2019, the GPL Defendants
acquired the majority of the unrestricted shares issued by HempAmericana.
22. After acquiring HempAmericana stock, the GPL Defendants would only purchase
additional shares in Regulation A offerings if they could first successfully sell their existing
shares into the market.
23. Regulation A offering circulars that Rosillo and HempAmericana filed with the
Commission, along with offering statements on Forms 1-A, indicated that the capital raised
would be used by HempAmericana “to grow its business.”  These misrepresentations were
misleading because they failed to disclose: (i) that significant percentages of the offering
proceeds were going to be used to promote the stock; and (ii) that the promotion was designed to
allow HempAmericana’s biggest stock purchaser (i.e., the GPL Defendants) to profit from
selling their stockholdings.
B. The GPL Defendants Installed Seaside and Kauderer to Promote
HempAmericana

24. The GPL Defendants conditioned their investment in HempAmericana on the
company hiring Seaside to promote the company’s stock.
25. The GPL Defendants introduced Rosillo to Adams and Kauderer.

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26. The GPL Defendants required that Rosillo hire Seaside as a “consultant,” with the
express understanding that Seaside, in turn, would hire Kauderer to undertake a wide-ranging
promotional campaign to enable the GPL Defendants to sell their shares at a profit.
27. While HempAmericana publicly disclosed retaining Seaside as a consultant, the
fact that Adams hired Kauderer for the promotion had the effect of distancing HempAmericana
and the GPL Defendants from the funding of the promotional activity.
28. Early on in the scheme, the GPL Defendants directed the specific split of offering
proceeds between HempAmericana and Seaside.
29. For example, in August 2017, when the GPL Defendants purchased 16 million
shares of stock for $80,000, the GPL Defendants directed that $50,000 be sent to
HempAmericana and $30,000 be sent to Seaside.
C. Seaside Made Payments to Kauderer as Part of the Promotion
30. After receiving the GPL Defendants’ money through HempAmericana, Seaside
forwarded varying amounts, generally more than half, to Kauderer for promotional activity.
31. Overall, of the $7.4 million in stock purchase proceeds that the GPL Defendants
paid to HempAmericana during the scheme, $2.18 million was paid by HempAmericana to
Seaside, and Seaside in turn forwarded more than $1.5 million of it, or approximately seventy
percent, to Kauderer.
32. Kauderer was in direct communications with both Rosillo and the GPL
Defendants about promoting HempAmericana stock.
33. From communications between Dillon and Kauderer in June 2019 concerning the
GPL Defendants’ budget for funding promotions, Dillon understood that Kauderer and Adams
were one and the same and were splitting the money paid to Adams.

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34. In May 2019, Adams assured Kauderer that he would be compensated for his
promotional efforts, but that the funds could not come directly from HempAmericana’s escrow
account because the GPL Defendants’ brokerage firm would not permit it, so the funds had to
come from Rosillo instead.
D. Kauderer Funded Promotions of HempAmericana Using False Disclaimers
35. Kauderer used HempAmericana’s proceeds from the GPL Defendants’ stock
purchases to hire people to promote the stock.
36. Kauderer used two kinds of promoters.
37. First, he hired people whom he understood to have email lists or social media
mechanisms that would enable them to get buyers to purchase the stock, apparently with the
promise of buying cheaper stock in advance of the promotion.
38. Second, he hired people who would in turn pay others to engage in more
traditional promotional activity during the actual “pump.”
39. As an example of how the scheme unfolded, in January 2018, the GPL
Defendants purchased $170,000 of HempAmericana stock.  $70,000 of the sales proceeds went
to Seaside, and $55,000 of that amount went to Kauderer, who in turn paid an entity, “Entity A.”
40. Later that month, another entity, “Entity B,” put out email blasts promoting
HempAmericana stock and disclosing that it was compensated by Entity A, which was described
as a non-affiliated third party.
41. The promotion’s disclaimer said that Entity B did not own any shares in
HempAmericana, and it made no reference to anyone intending to sell shares into the promotion.
42. Kauderer’s hiring of such intermediaries assured that the GPL Defendants’
connection to the promotional campaigns was obscured.

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43. The promotions failed to disclose either HempAmericana or the GPL Defendants
as the ultimate source of funding for the promotions.
44. Further, the stock promotions failed to disclose Seaside’s and Kauderer’s roles in
facilitating payment from the GPL Defendants to downstream promoters, and failed to disclose
that Seaside and Kauderer were actually affiliated with and assisted by the issuer,
HempAmericana.
45. Finally, the promotions failed to disclose that the GPL Defendants, the ultimate
funder of the promotions, intended to sell out their shares during the promotion.
46. Some disclosures included a boilerplate statement that the funder, issuer, or their
affiliates “likely wish to liquidate shares of the profiled company.”  The statements were
misleading because the GPL Defendants’ intent at the outset of investment was for
HempAmericana to funnel significant proceeds from the GPL Defendants’ investment to
promoters to enable the GPL Defendants to sell their stock, and then reinvest in HempAmericana
for subsequent rounds of promotion.
47. Contemporaneous investors in HempAmericana stock would have cared that the
promotions were being funded by the company and an investor so that the investor could sell
during the promotions.
E. The GPL Defendants’ Stock Sales Coincided with Kauderer’s Promotion
48. The HempAmericana scheme was very lucrative for the GPL Defendants.
49. The GPL Defendants paid $7.4 million to acquire more than 1.5 billion shares of
HempAmericana stock and, in conjunction with Kauderer’s promotional activity, sold the shares
for more than $18.4 million, for approximately $11 million in illegal profit.
50. Kauderer kept the GPL Defendants apprised of the promotions, advising on when

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the buying volume would increase and on the strategy for selling the stock.
51. On at least one occasion, Kauderer requested that the GPL Defendants sell some
stock into the market at a lower price (pre-promotion) to enable Kauderer’s “guys,” i.e., his sub-
promoters, to purchase the stock more cheaply, apparently because of a shortfall in Kauderer’s
budget for promotion.
F. Tolling Agreements
52. On October 21, 2022, Kauderer signed a tolling agreement that suspended the
running of the applicable statute of limitations from October 20, 2022 to January 19, 2023.
53. On March 1, 2023, Kauderer signed a tolling agreement that suspended the
running of the applicable statute of limitations from January 19, 2023 to April 18, 2023.
FIRST CLAIM FOR RELIEF
Violations of Securities Act Sections 17(a)(1) and (3)

54. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 53.
55. Kauderer, directly or indirectly, singly or in concert, in the offer or sale of
securities and by the use of the means or instruments of transportation or communication in
interstate commerce or the mails, (i) knowingly or recklessly employed one or more devices,
schemes or artifices to defraud, and/or (ii) knowingly, recklessly, or negligently engaged in one
or more transactions, practices, or courses of business which operated or would operate as a
fraud or deceit upon the purchaser.
56. By reason of the foregoing, Kauderer, directly or indirectly, violated and, unless
enjoined, will again violate Securities Act Sections 17(a)(1) and (3) [15 U.S.C. §§ 77q(a)(1) and
(3)].

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SECOND CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rules 10b-5(a) and (c) Thereunder

57. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 53.
58. Kauderer, directly or indirectly, singly or in concert, in connection with the
purchase or sale of securities and by the use of means or instrumentalities of interstate
commerce, or the mails, or the facilities of a national securities exchange, knowingly or
recklessly (i) employed one or more devices, schemes, or artifices to defraud, and/or (ii) engaged
in one or more acts, practices, or courses of business which operated or would operate as a fraud
or deceit upon other persons.
59. By reason of the foregoing, Kauderer, directly or indirectly, singly or in concert,
violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)]
and Rules 10b-5(a) and (c) thereunder [17 C.F.R. §§ 240.10b-5(a) and (c)].
PRAYER FOR RELIEF
 WHEREFORE, the Commission respectfully requests that the Court enter a Final
Judgment:
I.
Permanently enjoining Kauderer and his agents, servants, employees and attorneys and
all persons in active concert or participation with any of them from violating, directly or
indirectly, Securities Act Section 17(a) [15 U.S.C. § 77q(a)], and Exchange Act Section 10(b)
[15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];
II.
Ordering Kauderer to disgorge all ill-gotten gains he received directly or indirectly, with
pre-judgment interest thereon, as a result of the alleged violations, pursuant to Exchange Act

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Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)];
III.
Permanently prohibiting Kauderer from participating in any offering of a penny stock,
including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading,
or inducing or attempting to induce the purchase or sale of any penny stock, under Securities Act
Section 20(g) [15 U.S.C. § 77t(g)] and Exchange Act Section 21(d)(6) [15 U.S.C. § 78u(d)(6)];
and
IV.
Granting any other and further relief this Court may deem just and proper.
JURY DEMAND
The Commission demands a trial by a jury.

Dated:  New York, New York
May 17, 2023
/s/ Antonia M. Apps
____________________________________
ANTONIA M. APPS
REGIONAL DIRECTOR
Thomas P. Smith, Jr.
Adam S. Grace
Paul G. Gizzi
Brenda Wai Ming Chang
John C. Lehmann
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, NY  10004-2616
212-336-0077 (Gizzi)
Email: [email protected]

ANTONIA M. APPS 
REGIONAL DIRECTOR 
Thomas P. Smith, Jr. 
Adam S. Grace 
Paul G. Gizzi 
Brenda Wai Ming Chang 
John C. Lehmann 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, NY  10004-2616 
212-336-0077 (Gizzi) 
Email: [email protected] 
 
UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 
Eleazar Kauderer, 
  
                                             Defendant. 
 

 
 
COMPLAINT 

   
23 Civ. _____ (       ) 

 
   

JURY TRIAL DEMANDED 
  

           
          

 
Plaintiff Securities and Exchange Commission (“Commission” or “SEC”), for its 

Complaint against Defendant Eleazar Kauderer (“Kauderer” or “Defendant”), alleges as follows: 

SUMMARY 

1. This action concerns Kauderer’s participation in a fraudulent scheme to promote 

the stock of a struggling microcap issuer from at least July 2017 to at least November 2019. 

2. In August 2021, the Commission filed a related action concerning the same 

fraudulent scheme to promote the microcap issuer’s stock, SEC v. GPL Ventures LLC, et al., 21-

cv-6814 (AKH) (S.D.N.Y.) (the “Related SEC Action”).   

Case 1:23-cv-04099   Document 1   Filed 05/17/23   Page 1 of 12



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3. The complaint in the Related SEC Action described how Kauderer helped the 

struggling microcap issuer and the other defendants (the “Related SEC Action Defendants,” 

identified below) carry out a lucrative, secret scheme to promote the microcap issuer’s stock.  

4. Specifically, the complaint in the Related SEC action alleged that Kauderer 

(identified therein as “Individual A”) participated in the scheme to facilitate certain defendants: 

(i) acquiring shares of the microcap issuer’s stock for their own benefit prior to recommending or 

touting the stock to others; (ii)  failing to disclose in the tout the full details of their ownership of the 

shares and their plans to sell them; and (iii) selling the shares following the tout’s dissemination, and 

into the increased share price and trading volume triggered by the touting.   

5. As alleged further below, and in the Related SEC Action, Kauderer knowingly 

participated in the scheme by orchestrating fraudulent promotional campaigns.  As Kauderer 

understood, the Related SEC Action Defendants needed the promotional campaigns to facilitate 

the scheme.  Further, the promotional campaigns concealed the fact that certain of the Related 

SEC Action Defendants funded the promotions.  

VIOLATIONS 

6. By virtue of the foregoing conduct and as alleged further herein, Kauderer has 

violated Sections 17(a)(1) and (3) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. 

§§ 77q(a)(1) and (3)], and Section 10(b) [15 U.S.C. § 78j(b)] of the Securities Exchange Act of 

1934 (“Exchange Act”) and Rules 10b-5(a) and (c) thereunder [17 C.F.R. §§ 240.10b-5(a) and 

(c)]. 

7. Unless Kauderer is restrained and enjoined, he will engage in the acts, practices, 

transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, 

and courses of business of similar type and object.   

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NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

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

Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)] and Exchange Act 

Section 21(d) [15 U.S.C. § 78u(d)].  

9. The Commission seeks a final judgment: (a) permanently enjoining Kauderer 

from violating the federal securities laws and rules this Complaint alleges he has violated; 

(b) ordering Kauderer to disgorge all ill-gotten gains he received as a result of the violations 

alleged herein and to pay prejudgment interest thereon, pursuant to Exchange Act Sections 

21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78(u)(d)(5), and 78u(d)(7)]; 

(c) permanently prohibiting Kauderer from participating in any offering of a penny stock, 

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

[15 U.S.C. § 78u(d)(6)]; and (d) ordering any other and further relief the Court may deem just 

and proper. 

JURISDICTION AND VENUE 

10. This Court has jurisdiction over this action pursuant to Securities Act Section 

22(a) [15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].  

11. Kauderer, directly and indirectly, has made use of the means or instrumentalities 

of interstate commerce or of the mails in connection with the transactions, acts, practices, and 

courses of business alleged herein. 

12. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] 

and Exchange Act Section 27 [15 U.S.C. § 78aa].  Certain of the acts, practices, transactions, and 

courses of business alleged in this Complaint occurred within this District, including Kauderer 

orchestrating promotional work for the struggling microcap issuer, which is headquartered in 

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New York, and communicating with other Related SEC Action Defendants, including entities 

headquartered in New York. 

DEFENDANT 

13. Kauderer, age 48, resides in Englewood Cliffs, New Jersey.  Kauderer, 

individually and through entities he owns or operates, is in the business of providing stock 

promotional services to microcap issuers.  He has held Series 7 and 63 securities licenses, which 

are now expired.  He was a registered representative at several registered broker-dealers from 

2000 through 2004.  In 2003, Kauderer pled guilty to conspiracy to commit mail and wire fraud, 

and was sentenced to a two year prison term.  United States v. Graziano, et al., 02-cr-60049 

(S.D. Fla.; criminal minute Jan. 23, 2003; judgment entered Apr. 8, 2004). 

RELATED SEC ACTION DEFENDANTS 

14. The Related SEC Action Defendants, named as defendants in the Related SEC 

Action, are: (i) GPL Ventures LLC, GPL Management LLC, Alexander J. Dillon (“Dillon”), and 

Cosmin I. Panait (collectively, the “GPL Defendants”); (ii) Lawrence B. Adams (“Adams”), now 

deceased, and his entity Seaside Advisors, LLC (“Seaside”); and (iii) HempAmericana, Inc. 

(“HempAmericana”), the struggling microcap issuer, and its CEO Salvador E. Rosillo 

(“Rosillo”).  During the period of time relevant to the allegations in this action and in the Related 

SEC Action: (i) the GPL Defendants were in the business of privately acquiring and publicly 

selling the securities of microcap issuers; (ii) Seaside, owned by Adams, purportedly provided 

consulting services to various microcap companies to assist with, among other things, marketing, 

public relations, and general business advice; and (ii) HempAmericana (ticker OTC BB: 

HMPQ), through its CEO Rosillo, purportedly researched, developed, and sold products made of 

industrial hemp, including cannabidiol (or CBD) oil. 

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FACTS 

THE HEMPAMERICANA FRAUD SCHEME 

15. From 2017 through 2019, Kauderer, together with the Related SEC Action 

Defendants, engaged in a fraudulent scheme involving the stock of the struggling microcap 

issuer, HempAmericana. 

16. The HempAmericana scheme can be summarized as follows: (1) the GPL 

Defendants repeatedly acquired HempAmericana stock, purportedly sold pursuant to the 

Regulation A registration exemption, conditioned on a portion of the stock sales proceeds being 

sent by HempAmericana to Seaside; (2) Seaside then paid Kauderer, a professional stock 

promoter, to promote the stock; (3) Kauderer hired promoters who in turn hired other promoters, 

to assist with promoting the stock; and (4) the GPL Defendants sold the HempAmericana stock 

they held during the promotional campaigns.   

17. The HempAmericana promotional campaigns were fraudulent because they did 

not disclose: (i) that the promotions were indirectly funded by the issuer, HempAmericana, using 

proceeds received from the GPL Defendants, the most significant purchaser in 

HempAmericana’s Regulation A offerings, which funds the GPL Defendants had ear-marked to 

fund the promotional campaigns; or (ii) that the GPL Defendants intended to sell their large 

stock holdings during the promotions.  

18. HempAmericana’s Regulation A offering circulars misleadingly failed to disclose 

that significant portions of the stock sales proceeds would be used for stock promotion. 

A. The GPL Defendants’ Share Acquisitions in HempAmericana Prior to 
Kauderer’s Promotion 
 

19. HempAmericana, a struggling microcap CBD company with a factory and 

equipment aimed at processing, bottling, and selling hemp-based products, had never been 

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profitable since its incorporation in February 2014.  Indeed, from 2017 through May 2020, 

HempAmericana generated a mere $9,727 in revenues.  Disclosure statements filed on 

OTCMarkets’ website noted that the company had to raise funds in order to finance operations.   

20. HempAmericana stopped filing financial information with OTCMarkets in July 

2020, and its stock was quoted with a “STOP” sign, an OTCMarkets designation denoting 

companies “that may not be able or willing to provide current disclosure to the public markets.”   

21. In June 2017, HempAmericana began issuing and selling unrestricted Regulation 

A shares to the GPL Defendants.  From July 2017 to November 2019, the GPL Defendants 

acquired the majority of the unrestricted shares issued by HempAmericana.   

22. After acquiring HempAmericana stock, the GPL Defendants would only purchase 

additional shares in Regulation A offerings if they could first successfully sell their existing 

shares into the market. 

23. Regulation A offering circulars that Rosillo and HempAmericana filed with the 

Commission, along with offering statements on Forms 1-A, indicated that the capital raised 

would be used by HempAmericana “to grow its business.”  These misrepresentations were 

misleading because they failed to disclose: (i) that significant percentages of the offering 

proceeds were going to be used to promote the stock; and (ii) that the promotion was designed to 

allow HempAmericana’s biggest stock purchaser (i.e., the GPL Defendants) to profit from 

selling their stockholdings. 

B. The GPL Defendants Installed Seaside and Kauderer to Promote 
HempAmericana 
 

24. The GPL Defendants conditioned their investment in HempAmericana on the 

company hiring Seaside to promote the company’s stock. 

25. The GPL Defendants introduced Rosillo to Adams and Kauderer.   

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26. The GPL Defendants required that Rosillo hire Seaside as a “consultant,” with the 

express understanding that Seaside, in turn, would hire Kauderer to undertake a wide-ranging 

promotional campaign to enable the GPL Defendants to sell their shares at a profit.  

27. While HempAmericana publicly disclosed retaining Seaside as a consultant, the 

fact that Adams hired Kauderer for the promotion had the effect of distancing HempAmericana 

and the GPL Defendants from the funding of the promotional activity.  

28. Early on in the scheme, the GPL Defendants directed the specific split of offering 

proceeds between HempAmericana and Seaside. 

29. For example, in August 2017, when the GPL Defendants purchased 16 million 

shares of stock for $80,000, the GPL Defendants directed that $50,000 be sent to 

HempAmericana and $30,000 be sent to Seaside. 

C. Seaside Made Payments to Kauderer as Part of the Promotion 

30. After receiving the GPL Defendants’ money through HempAmericana, Seaside 

forwarded varying amounts, generally more than half, to Kauderer for promotional activity.   

31. Overall, of the $7.4 million in stock purchase proceeds that the GPL Defendants 

paid to HempAmericana during the scheme, $2.18 million was paid by HempAmericana to 

Seaside, and Seaside in turn forwarded more than $1.5 million of it, or approximately seventy 

percent, to Kauderer. 

32. Kauderer was in direct communications with both Rosillo and the GPL 

Defendants about promoting HempAmericana stock.   

33. From communications between Dillon and Kauderer in June 2019 concerning the 

GPL Defendants’ budget for funding promotions, Dillon understood that Kauderer and Adams 

were one and the same and were splitting the money paid to Adams. 

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34. In May 2019, Adams assured Kauderer that he would be compensated for his 

promotional efforts, but that the funds could not come directly from HempAmericana’s escrow 

account because the GPL Defendants’ brokerage firm would not permit it, so the funds had to 

come from Rosillo instead.   

D. Kauderer Funded Promotions of HempAmericana Using False Disclaimers 

35. Kauderer used HempAmericana’s proceeds from the GPL Defendants’ stock 

purchases to hire people to promote the stock.   

36. Kauderer used two kinds of promoters.   

37. First, he hired people whom he understood to have email lists or social media 

mechanisms that would enable them to get buyers to purchase the stock, apparently with the 

promise of buying cheaper stock in advance of the promotion.   

38. Second, he hired people who would in turn pay others to engage in more 

traditional promotional activity during the actual “pump.”   

39. As an example of how the scheme unfolded, in January 2018, the GPL 

Defendants purchased $170,000 of HempAmericana stock.  $70,000 of the sales proceeds went 

to Seaside, and $55,000 of that amount went to Kauderer, who in turn paid an entity, “Entity A.”   

40. Later that month, another entity, “Entity B,” put out email blasts promoting 

HempAmericana stock and disclosing that it was compensated by Entity A, which was described 

as a non-affiliated third party.   

41. The promotion’s disclaimer said that Entity B did not own any shares in 

HempAmericana, and it made no reference to anyone intending to sell shares into the promotion. 

42. Kauderer’s hiring of such intermediaries assured that the GPL Defendants’ 

connection to the promotional campaigns was obscured. 

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43. The promotions failed to disclose either HempAmericana or the GPL Defendants 

as the ultimate source of funding for the promotions.   

44. Further, the stock promotions failed to disclose Seaside’s and Kauderer’s roles in 

facilitating payment from the GPL Defendants to downstream promoters, and failed to disclose 

that Seaside and Kauderer were actually affiliated with and assisted by the issuer, 

HempAmericana.   

45. Finally, the promotions failed to disclose that the GPL Defendants, the ultimate 

funder of the promotions, intended to sell out their shares during the promotion.   

46. Some disclosures included a boilerplate statement that the funder, issuer, or their 

affiliates “likely wish to liquidate shares of the profiled company.”  The statements were 

misleading because the GPL Defendants’ intent at the outset of investment was for 

HempAmericana to funnel significant proceeds from the GPL Defendants’ investment to 

promoters to enable the GPL Defendants to sell their stock, and then reinvest in HempAmericana 

for subsequent rounds of promotion. 

47. Contemporaneous investors in HempAmericana stock would have cared that the 

promotions were being funded by the company and an investor so that the investor could sell 

during the promotions. 

E. The GPL Defendants’ Stock Sales Coincided with Kauderer’s Promotion 

48. The HempAmericana scheme was very lucrative for the GPL Defendants. 

49. The GPL Defendants paid $7.4 million to acquire more than 1.5 billion shares of 

HempAmericana stock and, in conjunction with Kauderer’s promotional activity, sold the shares 

for more than $18.4 million, for approximately $11 million in illegal profit.   

50. Kauderer kept the GPL Defendants apprised of the promotions, advising on when 

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the buying volume would increase and on the strategy for selling the stock.  

51. On at least one occasion, Kauderer requested that the GPL Defendants sell some 

stock into the market at a lower price (pre-promotion) to enable Kauderer’s “guys,” i.e., his sub-

promoters, to purchase the stock more cheaply, apparently because of a shortfall in Kauderer’s 

budget for promotion. 

F. Tolling Agreements 

52. On October 21, 2022, Kauderer signed a tolling agreement that suspended the 

running of the applicable statute of limitations from October 20, 2022 to January 19, 2023. 

53. On March 1, 2023, Kauderer signed a tolling agreement that suspended the 

running of the applicable statute of limitations from January 19, 2023 to April 18, 2023. 

FIRST CLAIM FOR RELIEF 
Violations of Securities Act Sections 17(a)(1) and (3) 

 
54. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 53. 

55. Kauderer, directly or indirectly, singly or in concert, in the offer or sale of 

securities and by the use of the means or instruments of transportation or communication in 

interstate commerce or the mails, (i) knowingly or recklessly employed one or more devices, 

schemes or artifices to defraud, and/or (ii) knowingly, recklessly, or negligently engaged in one 

or more transactions, practices, or courses of business which operated or would operate as a 

fraud or deceit upon the purchaser. 

56. By reason of the foregoing, Kauderer, directly or indirectly, violated and, unless 

enjoined, will again violate Securities Act Sections 17(a)(1) and (3) [15 U.S.C. §§ 77q(a)(1) and 

(3)]. 

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SECOND CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rules 10b-5(a) and (c) Thereunder 

 
57. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 53. 

58. Kauderer, directly or indirectly, singly or in concert, in connection with the 

purchase or sale of securities and by the use of means or instrumentalities of interstate 

commerce, or the mails, or the facilities of a national securities exchange, knowingly or 

recklessly (i) employed one or more devices, schemes, or artifices to defraud, and/or (ii) engaged 

in one or more acts, practices, or courses of business which operated or would operate as a fraud 

or deceit upon other persons. 

59. By reason of the foregoing, Kauderer, directly or indirectly, singly or in concert, 

violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] 

and Rules 10b-5(a) and (c) thereunder [17 C.F.R. §§ 240.10b-5(a) and (c)]. 

PRAYER FOR RELIEF 

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

Judgment: 

I. 

Permanently enjoining Kauderer and his agents, servants, employees and attorneys and 

all persons in active concert or participation with any of them from violating, directly or 

indirectly, Securities Act Section 17(a) [15 U.S.C. § 77q(a)], and Exchange Act Section 10(b) 

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

II. 

Ordering Kauderer to disgorge all ill-gotten gains he received directly or indirectly, with 

pre-judgment interest thereon, as a result of the alleged violations, pursuant to Exchange Act 

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Sections 21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; 

III. 

Permanently prohibiting Kauderer from participating in any offering of a penny stock, 

including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, 

or inducing or attempting to induce the purchase or sale of any penny stock, under Securities Act 

Section 20(g) [15 U.S.C. § 77t(g)] and Exchange Act Section 21(d)(6) [15 U.S.C. § 78u(d)(6)]; 

and 

IV. 

Granting any other and further relief this Court may deem just and proper. 

JURY DEMAND 

The Commission demands a trial by a jury. 

 
Dated: New York, New York 

May 17, 2023 

/s/ Antonia M. Apps 

____________________________________ 

ANTONIA M. APPS 
REGIONAL DIRECTOR  
Thomas P. Smith, Jr. 
Adam S. Grace 
Paul G. Gizzi 
Brenda Wai Ming Chang 
John C. Lehmann 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, NY  10004-2616 
212-336-0077 (Gizzi) 
Email: [email protected] 

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