SEC v. Michael Gastauer; Roger Knox; Silverton SA Inc.; Wintercap SA Inc.; WB21 US Inc.; WB21 NA Inc., et al., No. LR-25349, District of Massachusetts (Mar. 24, 2022) — Press Release

SEC Obtains Final Judgment Ordering Individual to Pay Over $17 Million for Facilitating Multi-Million Dollar International Fraud Scheme Litigation Release No. 25349 / March 24, 2022 Securities and Exchange Commission v. Knox et al., Civil Action No. 1:18-cv-12058 (D. Mass. filed October 2, 2018) The Securities and Exchange Commission announced that it obtained a final judgment against Michael Gastauer, of Germany, for his role in an international scheme that generated more than $165 million of illegal sales of stock on the U.S. markets in at least 50 microcap companies. The final judgment ordered Gastauer to pay over $17 million. On October 2, 2018, the SEC charged Gastauer and six U.S.-based entities that he controlled, Silverton SA Inc., Wintercap SA Inc., WB21 US Inc., WB21 NA Inc., C Capital Corp., and B2 Cap Inc., with aiding and abetting a microcap fraud orchestrated by U.K. citizen Roger Knox and his Swiss entity, Wintercap SA. The SEC's complaint alleged that Knox and Wintercap SA helped sellers of large volumes of microcap securities evade U.S. securities laws that restrict sales by controlling shareholders. According to the complaint, Knox used Wintercap SA to conceal sellers' stock ownership by providing them access to offshore brokerage accounts, and Gastauer used his six entities' U.S. bank accounts to disburse the proceeds of those illegal stock sales. On October 26, 2018, the court entered a preliminary injunction and continued an asset freeze against Knox, Gastauer, and the entities they used in the scheme. On November 15, 2018, the SEC amended the complaint to add two additional relief defendants to the three relief defendants that were originally charged. On October 31, 2019, the court entered judgment by consent against relief defendant Simone Gastauer Foehr, who as a result of the final judgment against Michael Gastauer, is now required to pay $736,000. In a parallel criminal action brought by the U.S. Attorney for the District of Massachusetts, on October 23, 2018, a federal grand jury in Massachusetts indicted Knox on one count of securities fraud and one count of conspiracy to commit securities fraud. Knox pled guilty on January 13, 2020. His sentencing remains pending. On March 23, 2022, the Court granted the SEC's motion for default judgment against Gastauer, permanently enjoining him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and the registration provisions of Section 5 of the Securities Act. The Court also determined that Gastauer is liable for disgorgement of ill-gotten gains of $11,264,415 plus $1,736,559 in prejudgment interest thereon, and a civil penalty of $4,350,843. The SEC's ongoing case against Knox, Wintercap SA, the corporate entities controlled by Gastauer, other relief defendants connected to Gastauer, and other entities controlled by Knox is being handled by Trevor Donelan, Kathleen Shields, Jonathan Allen, Nita Klunder, and Amy Gwiazda in the Boston Regional Office. Final Judgment - Michael Gastauer

SEC Obtains Final Judgment Ordering Individual to Pay Over $17 Million for Facilitating Multi-Million Dollar International Fraud Scheme Litigation Release No. 25349 / March 24, 2022 Securities and Exchange Commission v. Knox et al., Civil Action No. 1:18-cv-12058 (D. Mass. filed October 2, 2018) The Securities and Exchange Commission announced that it obtained a final judgment against Michael Gastauer, of Germany, for his role in an international scheme that generated more than $165 million of illegal sales of stock on the U.S. markets in at least 50 microcap companies. The final judgment ordered Gastauer to pay over $17 million. On October 2, 2018, the SEC charged Gastauer and six U.S.-based entities that he controlled, Silverton SA Inc., Wintercap SA Inc., WB21 US Inc., WB21 NA Inc., C Capital Corp., and B2 Cap Inc., with aiding and abetting a microcap fraud orchestrated by U.K. citizen Roger Knox and his Swiss entity, Wintercap SA. The SEC's complaint alleged that Knox and Wintercap SA helped sellers of large volumes of microcap securities evade U.S. securities laws that restrict sales by controlling shareholders. According to the complaint, Knox used Wintercap SA to conceal sellers' stock ownership by providing them access to offshore brokerage accounts, and Gastauer used his six entities' U.S. bank accounts to disburse the proceeds of those illegal stock sales. On October 26, 2018, the court entered a preliminary injunction and continued an asset freeze against Knox, Gastauer, and the entities they used in the scheme. On November 15, 2018, the SEC amended the complaint to add two additional relief defendants to the three relief defendants that were originally charged. On October 31, 2019, the court entered judgment by consent against relief defendant Simone Gastauer Foehr, who as a result of the final judgment against Michael Gastauer, is now required to pay $736,000. In a parallel criminal action brought by the U.S. Attorney for the District of Massachusetts, on October 23, 2018, a federal grand jury in Massachusetts indicted Knox on one count of securities fraud and one count of conspiracy to commit securities fraud. Knox pled guilty on January 13, 2020. His sentencing remains pending. On March 23, 2022, the Court granted the SEC's motion for default judgment against Gastauer, permanently enjoining him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and the registration provisions of Section 5 of the Securities Act. The Court also determined that Gastauer is liable for disgorgement of ill-gotten gains of $11,264,415 plus $1,736,559 in prejudgment interest thereon, and a civil penalty of $4,350,843. The SEC's ongoing case against Knox, Wintercap SA, the corporate entities controlled by Gastauer, other relief defendants connected to Gastauer, and other entities controlled by Knox is being handled by Trevor Donelan, Kathleen Shields, Jonathan Allen, Nita Klunder, and Amy Gwiazda in the Boston Regional Office. Final Judgment - Michael Gastauer