SEC v. Darren Ofsink; and Michael T. Morris, No. LR-25686, Eastern District of New York (Apr. 3, 2023) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25686 / April 3, 2023 Securities and Exchange Commission v. DiScala et al., No. 1:14-cv-4346 (E.D.N.Y. filed July 17, 2014; amended January 19, 2016) SEC Obtains Final Judgments Against Two Additional Defendants in Codesmart Fraud On March 31, 2023, the U.S. District Court for the Eastern District of New York entered final judgments against Darren Ofsink and Michael T. Morris, enjoining them from violating certain provisions of the federal securities law and imposing other remedies. According to the SEC's complaint, starting in 2013, Ofsink and Morris, along with the other defendants, were involved in a scheme to manipulate the securities of CodeSmart Holdings, Inc. ("CodeSmart"). The SEC alleged that Ofsink, an attorney, helped execute the reverse merger of CodeSmart into a public shell company and thereafter, received and sold shares of CodeSmart, the offer and sale of which was not registered, and obscured the holdings of other key individuals. As to Morris, the SEC alleged that he engaged in matched trading for the purpose of inflating the price of CodeSmart securities and received and sold shares of CodeSmart, the offer and sale of which was not registered. The SEC's complaint charged Morris with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 9(a) and the antifraud provisions of 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and charged Ofsink with violating Sections 5(a) and 5(c) of the Securities Act. On March 31, 2023, the Court entered separate final judgments against Morris and Ofsink by consent in which they each agreed to be permanently enjoined from violations of the charged provisions and to penny stock bars. Each agreed to disgorge over ill-gotten gains ($292,409.11 for Ofsink and $27,526 for Morris) and prejudgment interest thereon, the payment of which was deemed satisfied by the restitution order in the parallel criminal proceeding, United States v. DiScala, et al., 14 Cr. 399 (E.D.N.Y.). The SEC's litigation is being handled by Todd Brody and Lindsay Moilanen of the New York Regional Office and is being supervised by Sheldon L. Pollock and Joseph Sansone. The SEC appreciates the assistance of the U.S. Attorney's Office for the Eastern District of New York and the Federal Bureau of Investigation.

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25686 / April 3, 2023 Securities and Exchange Commission v. DiScala et al., No. 1:14-cv-4346 (E.D.N.Y. filed July 17, 2014; amended January 19, 2016) SEC Obtains Final Judgments Against Two Additional Defendants in Codesmart Fraud On March 31, 2023, the U.S. District Court for the Eastern District of New York entered final judgments against Darren Ofsink and Michael T. Morris, enjoining them from violating certain provisions of the federal securities law and imposing other remedies. According to the SEC's complaint, starting in 2013, Ofsink and Morris, along with the other defendants, were involved in a scheme to manipulate the securities of CodeSmart Holdings, Inc. ("CodeSmart"). The SEC alleged that Ofsink, an attorney, helped execute the reverse merger of CodeSmart into a public shell company and thereafter, received and sold shares of CodeSmart, the offer and sale of which was not registered, and obscured the holdings of other key individuals. As to Morris, the SEC alleged that he engaged in matched trading for the purpose of inflating the price of CodeSmart securities and received and sold shares of CodeSmart, the offer and sale of which was not registered. The SEC's complaint charged Morris with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 9(a) and the antifraud provisions of 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and charged Ofsink with violating Sections 5(a) and 5(c) of the Securities Act. On March 31, 2023, the Court entered separate final judgments against Morris and Ofsink by consent in which they each agreed to be permanently enjoined from violations of the charged provisions and to penny stock bars. Each agreed to disgorge over ill-gotten gains ($292,409.11 for Ofsink and $27,526 for Morris) and prejudgment interest thereon, the payment of which was deemed satisfied by the restitution order in the parallel criminal proceeding, United States v. DiScala, et al., 14 Cr. 399 (E.D.N.Y.). The SEC's litigation is being handled by Todd Brody and Lindsay Moilanen of the New York Regional Office and is being supervised by Sheldon L. Pollock and Joseph Sansone. The SEC appreciates the assistance of the U.S. Attorney's Office for the Eastern District of New York and the Federal Bureau of Investigation.