SEC v. Justin Wallace Herman; Anthony Michael Baker; Ian Horn; and Island Capital Inc, No. LR-25361, Eastern District of Kentucky (Apr. 12, 2022) — Press Release

SEC Charges Shareholders, Attorney in Penny Stock Fraud Scheme Litigation Release No. 25361 / April 12, 2022 Securities and Exchange Commission v. Justin Wallace Herman, Anthony Michael Baker, Ian Horn, and Island Capital Inc, No. 7:22-cv-00027 (E.D. Kentucky filed April 7, 2022) The Securities and Exchange Commission charged Justin W. Herman, Anthony M. Baker, Ian Horn, and Island Capital Inc for their roles in the fraudulent and manipulative sale of hundreds of thousands of shares of a penny stock company. According to the SEC's complaint, from at least April 2017 through August 2017, the defendants each played a role in a scheme that enabled Herman and Island Capital to sell shares of penny stock issuer NxGen Brands, Inc. f/k/a Pyramidion Technology Group, Inc. ("PYTG") to unsuspecting investors. To create the appearance that PYTG had assets and business operations and was not merely a public shell company, Baker allegedly facilitated a sham acquisition by PYTG. For his part in the scheme, Horn allegedly provided PYTG's transfer agent with fraudulent Rule 144 opinion letters that enabled Herman and Island Capital to obtain unrestricted shares of PYTG. According to the complaint, Herman and Island Capital then engaged in manipulative trading to raise PYTG's share price and, with the assistance of paid boiler rooms, dumped their shares of PYTG at the inflated price, reaping profits of over $1 million, collectively. The SEC's complaint, filed in the U.S. District Court for the Eastern District of Kentucky, raises claims under Section 17(a) of the Securities Act of 1933 ("Securities Act") as to each of the defendants; Section 10(b) and Rule 10b-5(a) and (c) of the Securities Exchange Act of 1934 ("Exchange Act") as to Herman, Baker, and Island Capital; and Section 9(a)(2) of the Exchange Act as to Herman and Island Capital. Without admitting or denying the allegations in the SEC's complaint, Horn consented to the entry of a final judgment, subject to court approval, which would permanently enjoin him from violating Sections 17(a)(2) and (3) of the Securities Act and would seek as relief $1,000 in disgorgement plus prejudgment interest and a $10,000 civil penalty. As to the remaining defendants, the SEC seeks injunctions, disgorgement, civil penalties, and penny stock bars. The SEC's investigation was conducted by Laurie Abbott and James Thibodeau, with the assistance of Leigh Barrett, and was supervised by Tanya Beard of the SEC's Salt Lake Regional Office. The SEC's litigation is being conducted by Tracy Combs and Casey Fronk. SEC Complaint

SEC Charges Shareholders, Attorney in Penny Stock Fraud Scheme Litigation Release No. 25361 / April 12, 2022 Securities and Exchange Commission v. Justin Wallace Herman, Anthony Michael Baker, Ian Horn, and Island Capital Inc, No. 7:22-cv-00027 (E.D. Kentucky filed April 7, 2022) The Securities and Exchange Commission charged Justin W. Herman, Anthony M. Baker, Ian Horn, and Island Capital Inc for their roles in the fraudulent and manipulative sale of hundreds of thousands of shares of a penny stock company. According to the SEC's complaint, from at least April 2017 through August 2017, the defendants each played a role in a scheme that enabled Herman and Island Capital to sell shares of penny stock issuer NxGen Brands, Inc. f/k/a Pyramidion Technology Group, Inc. ("PYTG") to unsuspecting investors. To create the appearance that PYTG had assets and business operations and was not merely a public shell company, Baker allegedly facilitated a sham acquisition by PYTG. For his part in the scheme, Horn allegedly provided PYTG's transfer agent with fraudulent Rule 144 opinion letters that enabled Herman and Island Capital to obtain unrestricted shares of PYTG. According to the complaint, Herman and Island Capital then engaged in manipulative trading to raise PYTG's share price and, with the assistance of paid boiler rooms, dumped their shares of PYTG at the inflated price, reaping profits of over $1 million, collectively. The SEC's complaint, filed in the U.S. District Court for the Eastern District of Kentucky, raises claims under Section 17(a) of the Securities Act of 1933 ("Securities Act") as to each of the defendants; Section 10(b) and Rule 10b-5(a) and (c) of the Securities Exchange Act of 1934 ("Exchange Act") as to Herman, Baker, and Island Capital; and Section 9(a)(2) of the Exchange Act as to Herman and Island Capital. Without admitting or denying the allegations in the SEC's complaint, Horn consented to the entry of a final judgment, subject to court approval, which would permanently enjoin him from violating Sections 17(a)(2) and (3) of the Securities Act and would seek as relief $1,000 in disgorgement plus prejudgment interest and a $10,000 civil penalty. As to the remaining defendants, the SEC seeks injunctions, disgorgement, civil penalties, and penny stock bars. The SEC's investigation was conducted by Laurie Abbott and James Thibodeau, with the assistance of Leigh Barrett, and was supervised by Tanya Beard of the SEC's Salt Lake Regional Office. The SEC's litigation is being conducted by Tracy Combs and Casey Fronk. SEC Complaint