In re Pedro C. Gonzalez

 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 101177 / September 25, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22193 
 
 
In the Matter of 
 
Pedro C. Gonzalez 
 
Respondent. 
 
 
 
 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER 
  
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”), against Pedro C. Gonzalez (“Gonzalez” or 
“Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over him and the subject matter of these 
proceedings, which are admitted, and except as provided herein in Section V, Respondent consents 
to the entry of this Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the 
Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order 
(“Order”), as set forth below.   

 2 
 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
 
Summary 
 
1. These proceedings arise out of violations of the beneficial ownership reporting 
requirements of the federal securities laws.  Section 13(d) of the Exchange Act and Rule 13d-1 
thereunder together require that any person who directly or indirectly acquires beneficial 
ownership of more than five percent of a voting class of any equity security registered under 
Section 12 of the Exchange Act file a statement with the Commission.  During the relevant time, 
beneficial owners could comply with this requirement by filing a Schedule 13D with the 
Commission within 10 days after acquiring the requisite amount of beneficial ownership. 
 
2. Certain persons that have not made an acquisition recognized by Section 13(d)(1) 
may be subject to Section 13(g) of the Exchange Act and could file a short-form disclosure 
statement on Schedule 13G within 45 days of the end of the calendar year if their beneficial 
ownership exceeded five percent as of the year end. 
 
3. Section 16(a) of the Exchange Act requires officers and directors of a company 
with a registered class of equity security, and any beneficial owners of greater than 10% of such 
class, to file certain reports of securities holdings and transactions.  Enactment of Section 16(a) was 
motivated by a belief that “the most potent weapon against the abuse of insider information is full 
and prompt publicity” and by a desire “to give investors an idea of the purchases and sales by 
insiders which may in turn indicate their private opinion as to prospects of the company.” H.R. 
Rep. 73-1383, at 13, 24 (1934).   The obligation to make Section 16 filings applies irrespective of 
profits or the filer’s reasons for engaging in the transactions.   
 
4. Respondent was an officer, director, and significant shareholder of Stratus Capital 
Corp. (“Stratus”).  While subject to the reporting requirements above, he failed to file, or timely 
file, reports of his position and certain transactions in Stratus securities.  As a result, Respondent 
violated Sections 13(d), 13(g) and 16(a) and related rules. 
 
Respondent 
 
5. Gonzalez, age 51, and a resident of St. Petersburg, Florida, was an officer and 
director of Stratus from June 2018 through at least January 2024. 
 
                                                 
1
 The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding on any other person 
or entity in this or any other proceeding. 
                                                                                                             

 3 
Legal Framework 
 
6. Section 13(d)(1) of the Exchange Act and Rule 13d-1(a) thereunder together require 
any person who has directly or indirectly acquired beneficial ownership of more than five percent 
of any voting class of equity security registered under Section 12 of the Exchange Act to file a 
statement with the Commission disclosing certain information specified in a Schedule 13D.  
During the relevant time, individuals or entities could comply with this requirement by filing a 
Schedule 13D with the Commission within ten days after they acquired the requisite amount of 
beneficial ownership.
2
  Section 13(d) is a key provision that allows shareholders and potential 
investors to evaluate changes in substantial shareholdings.
3
  
 
7. Section 13(g)(1) of the Exchange Act and corresponding Rule 13d-1(d) together 
require any person who, directly or indirectly, is or otherwise becomes a beneficial owner of more 
than five percent of any voting class of equity security registered under Section 12 of the Exchange 
Act to file a statement with the Commission disclosing certain information specified in a Schedule 
13G.  During the relevant time, pursuant to Rule 13d-1(d), individuals or entities subject to these 
provisions were required to file the Schedule 13G within 45 days after the end of a calendar year if 
their beneficial ownership exceeded five percent at the end of the last day of that year.  Together 
with Section 13(d), Section 13(g) was intended to provide a “comprehensive disclosure system of 
corporate ownership” applicable to all persons who are the beneficial owners of more than five 
percent of certain classes of equity securities.
4
 
 
8. Section 16(a) of the Exchange Act and Rule 16a-3 apply to every officer, director, 
and greater than ten percent beneficial owner
5 
of any class of equity security registered pursuant to 
Exchange Act Section 12 (collectively referred to herein as “insiders”).  Pursuant to Rule 16a-3(a), 
insiders are required to file initial statements of holdings on Form 3 and keep this information 
                                                 
2
 On October 10, 2023, the Commission adopted amendments to the rules governing beneficial ownership reporting 
under Sections 13(d) and 13(g) to update and shorten certain filing deadlines (the “2023 Amendments”).  
Modernization of Beneficial Ownership Reporting, SEC Release No. 34-98704 (Oct. 10, 2023), 88 Fed. Reg. 76896 
(Nov. 7, 2023).  Among other provisions, the 2023 Amendments shortened the deadline for filing the initial 
statement on Schedule 13D from 10 days to five business days, which became effective on February 5, 2024.  Id. at 
76897, 76906. 
 
3
 See generally GAF Corp. v. Milstein, 453 F.2d 709, 717 (2d Cir. 1971) cert. denied, 406 U.S. 910 (1972); see also 
SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1167 (D.C. Cir. 1978) cert. denied, 440 U.S. 913 (1979), citing, S. Rep. 
No. 550, 90th Cong., 1st Sess. 1 (1967) and H.R. Rep. No. 1711, 90th Cong., 2d Sess. 2 (1968) (“The purpose of 
section 13(d) is to require disclosure of information by persons who have acquired a substantial interest, or increased 
their interest in the equity securities of a company by a substantial amount, within a relatively short period of 
time.”).  
 
4
 See Filing and Disclosure Requirements Relating to Beneficial Ownership, Release No. 34-14692, 43 Fed. Reg. 
18484, 18486 (Apr. 21, 1978). 
 
5
 For purposes of determining who is a greater than 10% beneficial owner required to report under Section 16(a), 
Rule 16a-1(a)(1) incorporates the standards in Exchange Act Rule 13d-3, which specifies that a “beneficial owner” 
includes any person who directly or indirectly has or shares voting or investment power, regardless of whether they 
have any economic interest in the securities.  More than one person may be a beneficial owner of the same securities.   
 

 4 
current by reporting transactions on Forms 4 and 5.  Specifically, Section 16(a)(2) of the Exchange 
Act and Rule 16a-3 thereunder require that within 10 days after becoming an insider, or on or 
before the effective date of the Section 12 registration of the class of equity security, an insider 
must file a Form 3 report disclosing his or her beneficial ownership of all securities of the issuer. 
These same provisions require that insiders must also file Form 4 reports disclosing certain 
transactions resulting in a change in beneficial ownership within two business days following the 
execution date of the transaction.  Pursuant to Rule 16a-3(g)(1), transactions required to be 
reported on Form 4 include purchases and sales of securities, exercises and conversions of 
derivative securities, and grants or awards of securities from the issuer.  In addition, according to 
Rule 16a-3(f)(1), insiders are required to file a Form 5 report within 45 days after the issuer’s fiscal 
year-end to report any transactions or holdings that should have been, but were not, reported on 
Form 3 or 4 (as applicable) during the issuer’s most recent fiscal year and any transactions eligible 
for deferred reporting (unless the corporate insider has previously reported all such transactions).     
 
9. There is no state of mind requirement for violations of Sections 13(d) and 16(a) and 
the rules thereunder.
.6  
The failure to timely file a required report, even if inadvertent, constitutes a 
violation.
7
  
Facts 
 
10. By September 2018, Respondent had acquired approximately 2.8 million shares of 
Stratus stock. 
 
11. On September 9, 2019, Stratus filed a Form 10 General Form of Registration 
Pursuant to Exchange Act Section 12(b) or 12(g) that represented there were roughly 21.5 million 
shares outstanding.  The number of outstanding shares did not change by November 2019 when the 
registration statement went effective. Thus, as of the effective date of the Form 10 registration 
statement, Respondent beneficially owned over 13% of Stratus stock and was an officer and 
director.  
 
12. Because he obtained the 2.8 million shares before the registration of the class under 
Section 12, Respondent did not “acquire”, as determined under Rule 13d-5(a), an equity security 
within the meaning of Rule 13d-1(i).
8
  Thus, there was no “acquisition” recognized under Section 
                                                 
6
 See, e.g., Savoy Indus., 587 F.2d at 1167 (“Indeed, the plain language of section 13(d)(1) gives no hint that 
intentional conduct need be found, but rather, appears to place a simple and affirmative duty of reporting on certain 
persons.”); SEC v. e-Smart Technologies, Inc., 82 F. Supp. 3d 97, 104 (D.D.C. 2015) (scienter is not required to 
establish a violation of Section 16(a) of the Exchange Act). 
 
7
 Cf. Oppenheimer & Co., Inc., 47 SEC 286, 1980 WL 26901, at *1–2 (May 19, 1980) (Commission opinion) (“We 
have previously held that the failure to make a required report, even though inadvertent, constitutes a willful 
violation”); Herbert Moskowitz, 77 SEC 446, 2002 WL 434524, at *7 (Mar. 21, 2002) (Commission opinion) 
(“evidence of both motive for non-disclosure and actual market impact ... is irrelevant” to whether violations of 
Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder occurred). 
 
8
 Rule 13d-1(i) provides, in part, that the term “equity security” means “any equity security of a class which is 
registered pursuant to section 12 of that [Exchange] Act.”  Rule 13d-5(a) provides that a person who becomes a 
beneficial owner of securities “shall be deemed to have acquired such securities for purposes of section 13(d)(1) of 
the [Exchange] Act, whether such acquisition was through purchase or otherwise.”   

 5 
13(d)(1) at that time because the class of equity security had not yet been registered under Section 
12 and thus the regulation did not apply. 
  
13. However, Respondent maintained his position in Stratus common stock through the 
end of 2019.  After registration of the class of common stock under Section 12(g) went effective 60 
days after the Form 10 was filed, and the class of equity securities was thus subject to the 
regulation, Respondent became subject to Section 13(g) of the Exchange Act because he still held 
greater than 5% beneficial ownership on December 31, 2019.  As a result, he was required to file a 
Schedule 13G within 45 days as of the end of 2019 pursuant to Section 13(g)(1) and corresponding 
Rule 13d-1(d).  Respondent failed to make this filing. 
 
14. Because Respondent beneficially owned more than 10% of Stratus, and was an 
officer and director, he was required to file a Form 3 reporting his holdings by the effective date of 
the Form 10 registration statement.  Respondent failed to make this filing. 
 
15. Having not made a Form 3 filing, Respondent should have filed a Form 5 within 45 
days after the end of the issuer’s 2019 fiscal year to report any holdings that should have been, but 
were not, reported on Form 3.  Respondent did not file a Form 5 until November 23, 2020.  This 
filing was late and failed to report certain of Respondent’s holdings. 
 
16. On October 28, 2020, Respondent obtained approximately 7.9 million shares of 
common stock and 1,000,000 shares of Series A Preferred Stock of Stratus as trustee of an entity.  
The receipt of these shares constituted a non-exempt acquisition of beneficial ownership under 
Rule 13d-5(a), and subjected Respondent to Section 13(d)(1) and corresponding Rule 13d-1(a).  
Respondent filed a Schedule 13D, in his individual capacity, on November 18, 2020, and 
represented that the date of event that required a filing was October 28, 2020.  Respondent’s 
Schedule 13D should have been filed no later than 10 days from the event requiring filing and was 
therefore untimely.  
 
17. Because Respondent beneficially owned more than 10% of Stratus common stock, 
and was an officer and director, he was required to report the October 28, 2020 acquisitions within 
two business days on Form 4.  Respondent failed to make that filing.   
 
Violations 
 
 As a result of the conduct described above, Respondent violated Sections 13(d)(1), 13(g)(1) 
and 16(a) of the Exchange Act and Rules 13d-1 and 16a-3 thereunder.   
 
Cooperation 
In determining to accept the Offer, the Commission considered cooperation 
afforded to the Commission staff. 

 6 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent Gonzalez’s Offer. 
 
 Accordingly, it is hereby ORDERED that: 
 
 A. Pursuant to Section 21C of the Exchange Act, Respondent Gonzalez cease and 
desist from committing or causing any violations and any future violations of Sections 13(d)(1), 
13(g)(1) and 16(a) of the Exchange Act and Rules 13d-1 and 16a-3 thereunder. 
 
B. Respondent shall pay civil penalties of $25,000 to the Securities and Exchange 
Commission for transfer to the general fund of the United States Treasury, subject to Exchange Act 
Section 21F(g)(3).  If timely payment is not made, additional interest shall accrue pursuant to 31 
U.S.C. § 3717.  Payment shall be made in the following installments:  $10,000 within 14 days after 
the entry of this Order; $5,000 within 120 days after the entry of this Order; $5,000 within 240 
days after the entry of this Order; and $5,000 within 360 days after the entry of this Order.  
Payments shall be applied first to post order interest, which accrues pursuant to 31 U.S.C. § 3717.  
Prior to making the final payment set forth herein, Respondent shall contact the staff of the 
Commission for the amount due.  If Respondent fails to make any payment by the date agreed 
and/or in the amount agreed according to the schedule set forth above, all outstanding payments 
under this Order, including post-order interest, minus any payments made, shall become due and 
payable immediately at the discretion of the staff of the Commission without further application to 
the Commission. 
 
Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 

 7 
Payments by check or money order must be accompanied by a cover letter identifying 
Pedro C. Gonzalez as a Respondent in these proceedings, and the file number of these proceedings; 
a copy of the cover letter and check or money order must be sent to D. Mark Cave, Associate 
Director, Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, 
Washington, DC 20549.  
 
 C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, he shall not argue that he is entitled to, nor shall he benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that he shall, within 30 days after entry of a final order granting 
the Penalty Offset, notify the Commission's counsel in this action and pay the amount of the 
Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 
an additional civil penalty and shall not be deemed to change the amount of the civil penalty 
imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 
private damages action brought against Respondent by or on behalf of one or more investors based 
on substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
V. 
 
It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 
523 of the Bankruptcy Code, 11 U.S.C. § 523, the findings in this Order are true and admitted by 
Respondent, and further, any debt for disgorgement, prejudgment interest, civil penalty or other 
amounts due by Respondent under this Order or any other judgment, order, consent order, decree 
or settlement agreement entered in connection with this proceeding, is a debt for the violation by 
Respondent of the federal securities laws or any regulation or order issued under such laws, as set 
forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19). 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
Secretary 
 
 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 101177 / September 25, 2024 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22193 

 

 

In the Matter of 

 

Pedro C. Gonzalez 

 

Respondent. 

 

 

 

 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER 

  

I. 

 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-

and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”), against Pedro C. Gonzalez (“Gonzalez” or 

“Respondent”).   

 

II. 

 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over him and the subject matter of these 

proceedings, which are admitted, and except as provided herein in Section V, Respondent consents 

to the entry of this Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the 

Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order 

(“Order”), as set forth below.   



 2 

 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

 

Summary 

 

1. These proceedings arise out of violations of the beneficial ownership reporting 

requirements of the federal securities laws.  Section 13(d) of the Exchange Act and Rule 13d-1 

thereunder together require that any person who directly or indirectly acquires beneficial 

ownership of more than five percent of a voting class of any equity security registered under 

Section 12 of the Exchange Act file a statement with the Commission.  During the relevant time, 

beneficial owners could comply with this requirement by filing a Schedule 13D with the 

Commission within 10 days after acquiring the requisite amount of beneficial ownership. 

 

2. Certain persons that have not made an acquisition recognized by Section 13(d)(1) 

may be subject to Section 13(g) of the Exchange Act and could file a short-form disclosure 

statement on Schedule 13G within 45 days of the end of the calendar year if their beneficial 

ownership exceeded five percent as of the year end. 

 

3. Section 16(a) of the Exchange Act requires officers and directors of a company 

with a registered class of equity security, and any beneficial owners of greater than 10% of such 

class, to file certain reports of securities holdings and transactions.  Enactment of Section 16(a) was 

motivated by a belief that “the most potent weapon against the abuse of insider information is full 

and prompt publicity” and by a desire “to give investors an idea of the purchases and sales by 

insiders which may in turn indicate their private opinion as to prospects of the company.” H.R. 

Rep. 73-1383, at 13, 24 (1934).   The obligation to make Section 16 filings applies irrespective of 

profits or the filer’s reasons for engaging in the transactions.   

 

4. Respondent was an officer, director, and significant shareholder of Stratus Capital 

Corp. (“Stratus”).  While subject to the reporting requirements above, he failed to file, or timely 

file, reports of his position and certain transactions in Stratus securities.  As a result, Respondent 

violated Sections 13(d), 13(g) and 16(a) and related rules. 

 

Respondent 

 

5. Gonzalez, age 51, and a resident of St. Petersburg, Florida, was an officer and 

director of Stratus from June 2018 through at least January 2024. 

 

                                                 
1 The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding on any other person 

or entity in this or any other proceeding. 

                                                                                                             



 3 

Legal Framework 

 

6. Section 13(d)(1) of the Exchange Act and Rule 13d-1(a) thereunder together require 

any person who has directly or indirectly acquired beneficial ownership of more than five percent 

of any voting class of equity security registered under Section 12 of the Exchange Act to file a 

statement with the Commission disclosing certain information specified in a Schedule 13D.  

During the relevant time, individuals or entities could comply with this requirement by filing a 

Schedule 13D with the Commission within ten days after they acquired the requisite amount of 

beneficial ownership.2  Section 13(d) is a key provision that allows shareholders and potential 

investors to evaluate changes in substantial shareholdings.3  

 

7. Section 13(g)(1) of the Exchange Act and corresponding Rule 13d-1(d) together 

require any person who, directly or indirectly, is or otherwise becomes a beneficial owner of more 

than five percent of any voting class of equity security registered under Section 12 of the Exchange 

Act to file a statement with the Commission disclosing certain information specified in a Schedule 

13G.  During the relevant time, pursuant to Rule 13d-1(d), individuals or entities subject to these 

provisions were required to file the Schedule 13G within 45 days after the end of a calendar year if 

their beneficial ownership exceeded five percent at the end of the last day of that year.  Together 

with Section 13(d), Section 13(g) was intended to provide a “comprehensive disclosure system of 

corporate ownership” applicable to all persons who are the beneficial owners of more than five 

percent of certain classes of equity securities.4 

 

8. Section 16(a) of the Exchange Act and Rule 16a-3 apply to every officer, director, 

and greater than ten percent beneficial owner5 of any class of equity security registered pursuant to 

Exchange Act Section 12 (collectively referred to herein as “insiders”).  Pursuant to Rule 16a-3(a), 

insiders are required to file initial statements of holdings on Form 3 and keep this information 

                                                 
2 On October 10, 2023, the Commission adopted amendments to the rules governing beneficial ownership reporting 

under Sections 13(d) and 13(g) to update and shorten certain filing deadlines (the “2023 Amendments”).  

Modernization of Beneficial Ownership Reporting, SEC Release No. 34-98704 (Oct. 10, 2023), 88 Fed. Reg. 76896 

(Nov. 7, 2023).  Among other provisions, the 2023 Amendments shortened the deadline for filing the initial 

statement on Schedule 13D from 10 days to five business days, which became effective on February 5, 2024.  Id. at 

76897, 76906. 

 
3 See generally GAF Corp. v. Milstein, 453 F.2d 709, 717 (2d Cir. 1971) cert. denied, 406 U.S. 910 (1972); see also 

SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1167 (D.C. Cir. 1978) cert. denied, 440 U.S. 913 (1979), citing, S. Rep. 

No. 550, 90th Cong., 1st Sess. 1 (1967) and H.R. Rep. No. 1711, 90th Cong., 2d Sess. 2 (1968) (“The purpose of 

section 13(d) is to require disclosure of information by persons who have acquired a substantial interest, or increased 

their interest in the equity securities of a company by a substantial amount, within a relatively short period of 

time.”).  

 
4 See Filing and Disclosure Requirements Relating to Beneficial Ownership, Release No. 34-14692, 43 Fed. Reg. 

18484, 18486 (Apr. 21, 1978). 

 
5 For purposes of determining who is a greater than 10% beneficial owner required to report under Section 16(a), 

Rule 16a-1(a)(1) incorporates the standards in Exchange Act Rule 13d-3, which specifies that a “beneficial owner” 

includes any person who directly or indirectly has or shares voting or investment power, regardless of whether they 

have any economic interest in the securities.  More than one person may be a beneficial owner of the same securities.   

 



 4 

current by reporting transactions on Forms 4 and 5.  Specifically, Section 16(a)(2) of the Exchange 

Act and Rule 16a-3 thereunder require that within 10 days after becoming an insider, or on or 

before the effective date of the Section 12 registration of the class of equity security, an insider 

must file a Form 3 report disclosing his or her beneficial ownership of all securities of the issuer. 

These same provisions require that insiders must also file Form 4 reports disclosing certain 

transactions resulting in a change in beneficial ownership within two business days following the 

execution date of the transaction.  Pursuant to Rule 16a-3(g)(1), transactions required to be 

reported on Form 4 include purchases and sales of securities, exercises and conversions of 

derivative securities, and grants or awards of securities from the issuer.  In addition, according to 

Rule 16a-3(f)(1), insiders are required to file a Form 5 report within 45 days after the issuer’s fiscal 

year-end to report any transactions or holdings that should have been, but were not, reported on 

Form 3 or 4 (as applicable) during the issuer’s most recent fiscal year and any transactions eligible 

for deferred reporting (unless the corporate insider has previously reported all such transactions).     

 

9. There is no state of mind requirement for violations of Sections 13(d) and 16(a) and 

the rules thereunder..6  The failure to timely file a required report, even if inadvertent, constitutes a 

violation.7  

Facts 

 

10. By September 2018, Respondent had acquired approximately 2.8 million shares of 

Stratus stock. 

 

11. On September 9, 2019, Stratus filed a Form 10 General Form of Registration 

Pursuant to Exchange Act Section 12(b) or 12(g) that represented there were roughly 21.5 million 

shares outstanding.  The number of outstanding shares did not change by November 2019 when the 

registration statement went effective. Thus, as of the effective date of the Form 10 registration 

statement, Respondent beneficially owned over 13% of Stratus stock and was an officer and 

director.  

 

12. Because he obtained the 2.8 million shares before the registration of the class under 

Section 12, Respondent did not “acquire”, as determined under Rule 13d-5(a), an equity security 

within the meaning of Rule 13d-1(i).8  Thus, there was no “acquisition” recognized under Section 

                                                 
6 See, e.g., Savoy Indus., 587 F.2d at 1167 (“Indeed, the plain language of section 13(d)(1) gives no hint that 

intentional conduct need be found, but rather, appears to place a simple and affirmative duty of reporting on certain 

persons.”); SEC v. e-Smart Technologies, Inc., 82 F. Supp. 3d 97, 104 (D.D.C. 2015) (scienter is not required to 

establish a violation of Section 16(a) of the Exchange Act). 

 
7 Cf. Oppenheimer & Co., Inc., 47 SEC 286, 1980 WL 26901, at *1–2 (May 19, 1980) (Commission opinion) (“We 

have previously held that the failure to make a required report, even though inadvertent, constitutes a willful 

violation”); Herbert Moskowitz, 77 SEC 446, 2002 WL 434524, at *7 (Mar. 21, 2002) (Commission opinion) 

(“evidence of both motive for non-disclosure and actual market impact … is irrelevant” to whether violations of 

Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder occurred). 

 
8 Rule 13d-1(i) provides, in part, that the term “equity security” means “any equity security of a class which is 

registered pursuant to section 12 of that [Exchange] Act.”  Rule 13d-5(a) provides that a person who becomes a 

beneficial owner of securities “shall be deemed to have acquired such securities for purposes of section 13(d)(1) of 

the [Exchange] Act, whether such acquisition was through purchase or otherwise.”   



 5 

13(d)(1) at that time because the class of equity security had not yet been registered under Section 

12 and thus the regulation did not apply. 

  

13. However, Respondent maintained his position in Stratus common stock through the 

end of 2019.  After registration of the class of common stock under Section 12(g) went effective 60 

days after the Form 10 was filed, and the class of equity securities was thus subject to the 

regulation, Respondent became subject to Section 13(g) of the Exchange Act because he still held 

greater than 5% beneficial ownership on December 31, 2019.  As a result, he was required to file a 

Schedule 13G within 45 days as of the end of 2019 pursuant to Section 13(g)(1) and corresponding 

Rule 13d-1(d).  Respondent failed to make this filing. 

 

14. Because Respondent beneficially owned more than 10% of Stratus, and was an 

officer and director, he was required to file a Form 3 reporting his holdings by the effective date of 

the Form 10 registration statement.  Respondent failed to make this filing. 

 

15. Having not made a Form 3 filing, Respondent should have filed a Form 5 within 45 

days after the end of the issuer’s 2019 fiscal year to report any holdings that should have been, but 

were not, reported on Form 3.  Respondent did not file a Form 5 until November 23, 2020.  This 

filing was late and failed to report certain of Respondent’s holdings. 

 

16. On October 28, 2020, Respondent obtained approximately 7.9 million shares of 

common stock and 1,000,000 shares of Series A Preferred Stock of Stratus as trustee of an entity.  

The receipt of these shares constituted a non-exempt acquisition of beneficial ownership under 

Rule 13d-5(a), and subjected Respondent to Section 13(d)(1) and corresponding Rule 13d-1(a).  

Respondent filed a Schedule 13D, in his individual capacity, on November 18, 2020, and 

represented that the date of event that required a filing was October 28, 2020.  Respondent’s 

Schedule 13D should have been filed no later than 10 days from the event requiring filing and was 

therefore untimely.  

 

17. Because Respondent beneficially owned more than 10% of Stratus common stock, 

and was an officer and director, he was required to report the October 28, 2020 acquisitions within 

two business days on Form 4.  Respondent failed to make that filing.   

 

Violations 

 

 As a result of the conduct described above, Respondent violated Sections 13(d)(1), 13(g)(1) 

and 16(a) of the Exchange Act and Rules 13d-1 and 16a-3 thereunder.   
 

Cooperation 

In determining to accept the Offer, the Commission considered cooperation 

afforded to the Commission staff. 



 6 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent Gonzalez’s Offer. 

 

 Accordingly, it is hereby ORDERED that: 

 

 A. Pursuant to Section 21C of the Exchange Act, Respondent Gonzalez cease and 

desist from committing or causing any violations and any future violations of Sections 13(d)(1), 

13(g)(1) and 16(a) of the Exchange Act and Rules 13d-1 and 16a-3 thereunder. 

 

B. Respondent shall pay civil penalties of $25,000 to the Securities and Exchange 

Commission for transfer to the general fund of the United States Treasury, subject to Exchange Act 

Section 21F(g)(3).  If timely payment is not made, additional interest shall accrue pursuant to 31 

U.S.C. § 3717.  Payment shall be made in the following installments:  $10,000 within 14 days after 

the entry of this Order; $5,000 within 120 days after the entry of this Order; $5,000 within 240 

days after the entry of this Order; and $5,000 within 360 days after the entry of this Order.  

Payments shall be applied first to post order interest, which accrues pursuant to 31 U.S.C. § 3717.  

Prior to making the final payment set forth herein, Respondent shall contact the staff of the 

Commission for the amount due.  If Respondent fails to make any payment by the date agreed 

and/or in the amount agreed according to the schedule set forth above, all outstanding payments 

under this Order, including post-order interest, minus any payments made, shall become due and 

payable immediately at the discretion of the staff of the Commission without further application to 

the Commission. 

 

Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

http://www.sec.gov/about/offices/ofm.htm


 7 

Payments by check or money order must be accompanied by a cover letter identifying 

Pedro C. Gonzalez as a Respondent in these proceedings, and the file number of these proceedings; 

a copy of the cover letter and check or money order must be sent to D. Mark Cave, Associate 

Director, Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, 

Washington, DC 20549.  

 

 C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, he shall not argue that he is entitled to, nor shall he benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that he shall, within 30 days after entry of a final order granting 

the Penalty Offset, notify the Commission's counsel in this action and pay the amount of the 

Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 

an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 

private damages action brought against Respondent by or on behalf of one or more investors based 

on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

V. 

 

It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 

523 of the Bankruptcy Code, 11 U.S.C. § 523, the findings in this Order are true and admitted by 

Respondent, and further, any debt for disgorgement, prejudgment interest, civil penalty or other 

amounts due by Respondent under this Order or any other judgment, order, consent order, decree 

or settlement agreement entered in connection with this proceeding, is a debt for the violation by 

Respondent of the federal securities laws or any regulation or order issued under such laws, as set 

forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19). 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

Secretary 

 

 


	UNITED STATES OF AMERICA
	IV.