SEC v. TODD ZINKWICH, No. 1:20-cv-11746, District of Massachusetts (Sept. 28, 2020) — Complaint

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

SECURITIES AND EXCHANGE
COMMISSION,
   Plaintiff,
 v.
TODD ZINKWICH,
   Defendant.
)
)
)
)
)
)
)
)
)
)

Civil Action No. 1:20-cv-11746

JURY TRIAL DEMANDED

COMPLAINT
Plaintiff Securities and Exchange Commission (the “Commission”) alleges the following
against Defendant Todd Zinkwich.
SUMMARY
1. This is a securities fraud enforcement action. Beginning in or before June 2017
and continuing through at least March 2018 (the “Relevant Period”), Defendant worked with
others to manipulate the public market for numerous microcap stocks, misleading the public to
believe there was heightened demand for the stock of certain companies. Defendant’s clients
were individuals and groups who controlled large quantities of stock that they hoped to dump
into the public market. They paid Defendant to generate interest and price movement in the
stocks they controlled, which in turn paved the way for these clients to sell millions of dollars’
worth of stock to the public at inflated prices.
2. Defendant, using two now-defunct entities that he controlled, handled
arrangements with clients and received payments from them. In turn, Defendant arranged with an
associate, Eric Landis, to create the mirage of heightened demand for the stocks in question.
Landis did this by repeatedly buying and selling stocks between several accounts that he and

2
Defendant controlled. In this way Defendant and Landis made it appear that thousands of shares
were changing hands in the public markets when in fact Landis was simply trading with himself.
Over the course of the fraud, Landis placed thousands of manipulative trades in the various
stocks Defendant agreed to promote.
3. Defendant used Green Rock Enterprises Inc. to receive hundreds of thousands of
dollars from clients who hired him and Landis to promote stocks of the companies used in the
clients’ schemes. Defendant communicated to the clients that Landis would send promotional
materials to email lists with thousands of subscribers that Landis purportedly controlled.
4. In fact, the email “ lists” that Landis maintained were not large enough to generate
significant market activity simply by sending out promotional materials. Indeed, Landis did not
send promotional emails to nearly the number of subscribers he told the clients he was reaching.
And, in some instances, he did not send any emails at all. Instead, Landis placed thousands of
manipulative trades in the securities of the companies he and Defendant had been paid to
promote, thereby creating the appearance of an upsurge of trading in the companies’ stock.
Defendant facilitated Landis’s trading by paying him a cut of the money from the clients and by
allowing Landis access to brokerage accounts in the name of Clear Island Holdings Inc., an
entity that Defendant controlled.
5. By reason of the conduct alleged herein, Defendant violated, and unless restrained
and enjoined will continue to violate the antifraud provisions of the securities laws, Sections
17(a)(1) and (3) of the Securities Act of 1933 (“Securities Act”), and Section 10(b) of the
Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5(a) and (c) thereunder.
Defendant also aided and abetted Landis’s violations of the market manipulation provisions of
the securities laws, Section 9(a) of the Exchange Act.

3
6. The Commission seeks a permanent injunction enjoining Defendant from
engaging in the transactions, acts, practices, and courses of business alleged in this Complaint,
disgorgement of all ill-gotten gains from the unlawful conduct together with prejudgment
interest, civil penalties, an order prohibiting Defendant from participating in any offering of a
penny stock, and such other relief as the Court may deem appropriate.
JURISDICTION AND VENUE
7. This Court has jurisdiction over this action pursuant to Section 22(a) of the
Securities Act [15 U.S.C. § 77v(a)] and Sections 21(d), 21(e), and 27 of the Exchange Act
[15 U.S.C. §§ 78u(d), 78u(e), and 78aa].
8. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C.
§ 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa]. Certain of the acts, practices,
transactions and courses of business alleged in this Complaint occurred within the District of
Massachusetts, and were effected, directly or indirectly, by making use of means or
instrumentalities of transportation or communication in interstate commerce, or the mails.
Among other things, various of the stocks affected by Defendant’s scheme were offered and sold
to investors located in Massachusetts.
DEFENDANT AND RELATED ENTITIES
9. Defendant Todd Zinkwich, age 50, is a resident of Clearwater Beach, Florida.
Defendant was the sole owner of Green Rock Enterprises Inc. and Clear Island Holdings Inc.,
both Florida corporations. The Florida secretary of state administratively dissolved Green Rock
and Clear Island in 2017 for failure to file required annual reports.

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RELATED PERSON AND ENTITY
10. Eric T. Landis, age 54, is a resident of Charlottesville, Virginia. In November
2018, the Commission charged Landis and a Virginia corporation he controlled, Ridgeview
Capital Management LLC, for their roles in the conduct summarized in this complaint, and the
U.S. Attorney for the District of Massachusetts charged Landis in a parallel criminal action.
11. The Commission’s action against Landis alleged that from at least January 2015
through January 2018, Landis placed thousands of manipulative trades in over 90 microcap
companies, including about 1,300 wash trades between multiple accounts in the names of Landis,
Landis’s relative, Ridgeview, and Clear Island. On August 8, 2019, the court entered a judgment
against Landis and Ridgeview in the Commission’s action, ordering permanent injunctive relief,
penny stock bars, and injunctions prohibiting them from trading or promoting certain stocks.
Monetary relief remains pending in the civil action.
12. Landis pled guilty in the criminal action in January 2019, and the court sentenced
him on January 24, 2020, to six months in prison, two years of supervised release, and a $50,000
fine. On August 10, 2020, the court entered an order of forfeiture against Landis in the amount of
$2,505,488.
FACTS
13.  “Wash” or “match” trading is a particular form of manipulative trading, where
one person trades between the same or multiple accounts that the person controls or has access
to. In reality, the same person is placing the buy and sell orders through multiple accounts, and
when those orders execute against each other, it is really the same person on both the buy and
sell side of the transaction. In this form of manipulative trading, the trader effectively trades with
him or herself and creates a false appearance of active trading in a company’s stock, commonly

5
raising or depressing the price of the stock, all for the purpose of inducing others to buy the stock
in future transactions.
14. Fraud schemes effectuated through manipulative trading often involve small (i.e.,
“microcap”) companies, particularly companies whose stocks trade infrequently. When microcap
companies are used in such schemes, the small market for their stock makes it possible to
manipulate reported transactions and prices, t  hereby creating an appearance of increased
demand. With thinly traded microcap stocks, it is often the case that, when manipulations stop,
market demand for the stocks returns to pre-manipulation levels. That is, there is often little to no
trading at all; the stock becomes worthless; and retail investors who purchased during the
manipulation are left holding stock that they cannot sell and that is essentially worth nothing.
15. During the Relevant Period, clients holding large quantities of stock that they
hoped to dump into the retail market hired Defendant to generate public interest in various
companies whose stock the clients hoped to sell. In turn, Defendant delivered on his promise of
an appearance of increased interest in the stocks by paying Landis, who in turn made thousands
of wash trades in the stock of the companies.
16. Defendant knew, or was reckless in not knowing, that many or all of his clients
routinely violated various securities laws, including by pumping up demand, or paying others to
pump up demand, in a company’s stock prior to dumping their shares. Defendant intentionally
avoided learning the details of his clients’ activities, keeping himself willfully blind to the
illegality of their conduct. Defendant routinely minimized his knowledge by communicating with
the clients only about the stock symbol they wanted Defendant to promote.
17. Defendant, likewise, intentionally avoided learning the precise details of Landis’s
manipulative trading. Defendant well understood, however, that he and Landis were paid to

6
generate an appearance of increased trading volume in the clients’ chosen stocks. And Defendant
knew that Landis generated such market movement by deceiving public investors through his
wash tr ading.
18. Landis purported to be self-employed as a stock promoter. To facilitate this
image, Landis established, paid for, and controlled email distribution lists designed to tout the
stock of publicly traded companies, including The Street Alert, The Penny Reporter, and The
Stock Beacon. Defendant incorporated Florida companies with the names The Street Alert LLC
and ThePennyReporter.com LLC, but he did not actively conduct business under those names.
19. Defendant knew, or was reckless in not knowing, that Landis’s mailing lists were
insufficient to generate the kind of impact on stock price and volume that Defendant and Landis
promised to deliver for the clients who engaged their services. Landis did not send promotional
emails to nearly the number of subscribers he communicated to the clients that he would. And, in
some instances, Landis did not send any emails at all. Instead of relying on promotional
campaigns, Defendant paid Landis and provided him access to Clear Island’s brokerage
accounts. Landis, in turn, used Clear Island’s accounts, among others, to place thousands of wash
trades, thereby creating an appearance of increased public trading in the stocks Defendant and
Landis had been paid to “promote.”
20. One example of the fraud occurred in June 2017, when clients paid Defendant and
Landis to promote the securities of BioHemp International Inc. and other microcap companies
they controlled.
21. On June 23, 2017, the clients wired Green Rock $104,000. The same day,
Defendant, through Green Rock, paid $46,000 to Landis’s Ridgeview entity.

7
22. Also on June 23, 2017, Defendant wired $35,000 from Green Rock to Clear
Island. And a few days later, Defendant wired approximately $35,000 from the Clear Island bank
account to one of its brokerage accounts.
23. Defendant made the transfers from Green Rock to Clear Island at Landis’s
direction. Landis told Defendant that Landis needed the money to conduct trading in the Clear
Island brokerage accounts. Defendant intended that Landis would use the money to make trades
and generate an appearance of market interest in the stocks the clients were paying them to
promote.
24. Between June 27, 2017, and June 30, 2017, Landis used multiple accounts to
make manipulative trades in BioHemp, buying and selling over 230,000 shares between accounts
Landis controlled. Included among Landis’s manipulative trades in BioHemp on June 28, 2017,
were purchases and sales of 14,000 shares between Clear Island and accounts in the name of
Ridgeview and Landis’s relative.
25. Another example of the fraud occurred in September and October 2017, when
clients paid Defendant and Landis to promote Drone Guarder Inc. and other microcap
companies.
26. On September 18, 2017, the clients wired Green Rock $69,990. The next day
Defendant wrote a check to Landis’s Ridgeview entity for $29,500.
27. Between September 20, 2017, and October 24, 2017, Landis used multiple
accounts to make manipulative trades in Drone Guarder. Included among Landis’s manipulative
trades in Drone Guarder were 61 wash trades of over 500,000 shares between Clear Island
accounts and accounts in the name of Ridgeview, Landis, and Landis’s relative.
* * *

8
28. In aggregate, from June 2017 to March 2018, Defendant, through Green Rock,
received $759,890 from clients operating fraudulent schemes.
29. Out of the nearly $760,000 that Green Rock received from Defendant’s clients,
Defendant paid $324,000 to Landis through Ridgeview, approximately $100,000 to other
individuals connected to the clients, and $64,000 to Clear Island for Landis to use to buy stocks
as part of the scheme. Defendant kept approximately $272,000 for himself.
30. By reason of the conduct described herein, Defendant defrauded investors in
multiple publicly traded companies by helping to create the false appearance of increased market
activity in the securities of those companies. Defendant’s and Landis’s conduct created apparent
trading activity in the stock of those companies for the purpose of inducing retail investors to
purchase stock of those companies at inflated prices.
FIRST CLAIM FOR RELIEF
FRAUD IN THE OFFER OR SALE OF SECURITIES
(Violations of Sections 17(a)(1) and (3) of the Securities Act)

31. The Commission repeats and incorporates by reference the allegations in
paragraphs 1-30 above.
32. By reason of the conduct described above, Defendant, in the offer or sale of
securities, by the use of the means or instrumentalities of interstate commerce or of the mails,
directly or indirectly, acting with the requisite degree of knowledge or state of mind (i) employed
devices, schemes, or artifices to defraud; and (ii) engaged in transactions, practices, or courses of
business which operated or would operate as a fraud or deceit upon any persons, including
purchasers or sellers of the securities.
33. By reason of the conduct described above, Defendant violated 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
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES
(Violations of Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder)

34. The Commission repeats and incorporates by reference the allegations in
paragraphs 1-33 above.
35. By reason of the conduct described above, Defendant, directly or indirectly, in
connection with the purchase or sale of securities, by the use of the means or instrumentalities of
interstate commerce or of the mails, or of any facility of any national securities exchange,
intentionally, knowingly, or recklessly, (i) employed devices, schemes, or artifices to defraud;
and (ii) engaged in acts, practices, or courses of business which operated or would operate as a
fraud or deceit upon any persons, including purchasers or sellers of the securities.
36. By reason of the conduct described above, Defendant violated Exchange Act
Section 10(b) [15 U.S.C. § 78j(b)] and Rules 10b-5(a) and (c) [17 C.F.R. § 240.10b-5(a) and (c)]
thereunder.
THIRD CLAIM FOR RELIEF
AIDING AND ABETTING
(Violations of Section 20(e) of the Exchange Act)

37. The Commission repeats and incorporates by reference the allegations in
paragraphs 1-36 above.
38. Sections 9(a)(1) and (2) of the Exchange Act [15 U.S.C. §78i(a)(1)-(2)] make it
unlawful for any person, directly or indirectly, by the use of the mails or any means or
instrumentality of interstate commerce, or of any facility of any national securities exchange,
(1) to effect any transaction in a security which involves no change in the beneficial ownership
of the security and to enter substantially similar orders for the purchase and sale of any security

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for the purpose of creating a false or misleading appearance of active trading in the security; or
(2) to effect a series of transactions in a security creating actual or apparent active trading in such
security, or raising or depressing the price of such security, for the purpose of inducing the
purchase or sale of such security by others.
39. By engaging in the conduct described above, Landis violated Sections 9(a)(1)
and (2) of the Exchange Act [15 U.S.C. § 78i(a)(1) and (2)].
40. Defendant knowingly or recklessly provided substantial assistance to Landis in
his violations of Sections 9(a)(1) and (2) of the Exchange Act.
41. By reason of this conduct, Defendant violated Section 20(e) of the Exchange Act
[15 U.S.C. § 78t(e)].
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court:
A. Enter a permanent injunction restraining Defendant and each of his officers,
agents, servants, employees, attorneys, and those persons in active concert or participation with
them who receive actual notice of the injunction by personal service or otherwise, including
email, fax, or overnight delivery service, from directly or indirectly engaging in the conduct
described above, or in conduct of similar purport and effect, in violation of:
1. Section 9(a) of the Exchange Act [15 U.S.C. 78i(a)];
2. Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5
thereunder [17 C.F.R. 240.10b-5]; and
3. Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].
B. Order the Defendant be unconditionally and permanently prohibited from
participating in any offering of a penny stock, as authorized by Section 20(g) of the Securities
Act [15 U.S.C. § 77t(g)] and Section 21d(6)(B) of the Exchange Act [15 U.S.C. § 78u(d)(6)(B)];
C. Order the Defendant to disgorge his ill-gotten gains, plus prejudgment interest;

11
D. Order the Defendant to pay appropriate civil monetary penalties in accordance
with Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the
Exchange Act [15 U.S.C. § 78u(d)(3)];
E. Retain jurisdiction over this action to implement and carry out the terms of all
orders and decrees that may be entered; and
F. Grant such other and further relief as this Court may deem just and proper.
JURY DEMAND
The Commission demands a jury in this matter for all claims so triable.

Respectfully submitted,

SECURITIES AND EXCHANGE COMMISSION

By its attorneys,

/s/ Jonathan R. Allen
Eric A. Forni (Mass. Bar No. 669685)
Kathleen B. Shields (Mass Bar No. 637438)
Jonathan Allen (Mass Bar No. 680729)
Amy Gwiazda (Mass Bar No.663494)
Boston Regional Office
33 Arch Street, 24th Floor
Boston, MA  02110
Phone:  (617) 573-4563 (Allen direct)
Fax:  (617) 573-4590
Dated:  September 24, 2020 [email protected]

UNITED STATES DISTRICT COURT 
DISTRICT OF MASSACHUSETTS 

 
 
SECURITIES AND EXCHANGE 
COMMISSION, 
   Plaintiff, 
 v. 

TODD ZINKWICH, 
   Defendant. 

) 
) 
) 
) 
) 
) 
) 
) 
) 
) 

 
 

 
Civil Action No. 1:20-cv-11746 
 
JURY TRIAL DEMANDED 

 
 

 

COMPLAINT 

Plaintiff Securities and Exchange Commission (the “Commission”) alleges the following 

against Defendant Todd Zinkwich. 

SUMMARY 

1. This is a securities fraud enforcement action. Beginning in or before June 2017 

and continuing through at least March 2018 (the “Relevant Period”), Defendant worked with 

others to manipulate the public market for numerous microcap stocks, misleading the public to 

believe there was heightened demand for the stock of certain companies. Defendant’s clients 

were individuals and groups who controlled large quantities of stock that they hoped to dump 

into the public market. They paid Defendant to generate interest and price movement in the 

stocks they controlled, which in turn paved the way for these clients to sell millions of dollars’ 

worth of stock to the public at inflated prices.  

2. Defendant, using two now-defunct entities that he controlled, handled 

arrangements with clients and received payments from them. In turn, Defendant arranged with an 

associate, Eric Landis, to create the mirage of heightened demand for the stocks in question. 

Landis did this by repeatedly buying and selling stocks between several accounts that he and 

Case 1:20-cv-11746   Document 1   Filed 09/24/20   Page 1 of 11



2 

Defendant controlled. In this way Defendant and Landis made it appear that thousands of shares 

were changing hands in the public markets when in fact Landis was simply trading with himself. 

Over the course of the fraud, Landis placed thousands of manipulative trades in the various 

stocks Defendant agreed to promote.   

3. Defendant used Green Rock Enterprises Inc. to receive hundreds of thousands of 

dollars from clients who hired him and Landis to promote stocks of the companies used in the 

clients’ schemes. Defendant communicated to the clients that Landis would send promotional 

materials to email lists with thousands of subscribers that Landis purportedly controlled.   

4. In fact, the email “lists” that Landis maintained were not large enough to generate 

significant market activity simply by sending out promotional materials. Indeed, Landis did not 

send promotional emails to nearly the number of subscribers he told the clients he was reaching.  

And, in some instances, he did not send any emails at all. Instead, Landis placed thousands of 

manipulative trades in the securities of the companies he and Defendant had been paid to 

promote, thereby creating the appearance of an upsurge of trading in the companies’ stock. 

Defendant facilitated Landis’s trading by paying him a cut of the money from the clients and by 

allowing Landis access to brokerage accounts in the name of Clear Island Holdings Inc., an 

entity that Defendant controlled. 

5. By reason of the conduct alleged herein, Defendant violated, and unless restrained 

and enjoined will continue to violate the antifraud provisions of the securities laws, Sections 

17(a)(1) and (3) of the Securities Act of 1933 (“Securities Act”), and Section 10(b) of the 

Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5(a) and (c) thereunder. 

Defendant also aided and abetted Landis’s violations of the market manipulation provisions of 

the securities laws, Section 9(a) of the Exchange Act. 

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3 

6. The Commission seeks a permanent injunction enjoining Defendant from 

engaging in the transactions, acts, practices, and courses of business alleged in this Complaint, 

disgorgement of all ill-gotten gains from the unlawful conduct together with prejudgment 

interest, civil penalties, an order prohibiting Defendant from participating in any offering of a 

penny stock, and such other relief as the Court may deem appropriate. 

JURISDICTION AND VENUE 

7. This Court has jurisdiction over this action pursuant to Section 22(a) of the 

Securities Act [15 U.S.C. § 77v(a)] and Sections 21(d), 21(e), and 27 of the Exchange Act 

[15 U.S.C. §§ 78u(d), 78u(e), and 78aa]. 

8. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C. 

§ 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa]. Certain of the acts, practices, 

transactions and courses of business alleged in this Complaint occurred within the District of 

Massachusetts, and were effected, directly or indirectly, by making use of means or 

instrumentalities of transportation or communication in interstate commerce, or the mails. 

Among other things, various of the stocks affected by Defendant’s scheme were offered and sold 

to investors located in Massachusetts.  

DEFENDANT AND RELATED ENTITIES 

9. Defendant Todd Zinkwich, age 50, is a resident of Clearwater Beach, Florida. 

Defendant was the sole owner of Green Rock Enterprises Inc. and Clear Island Holdings Inc., 

both Florida corporations. The Florida secretary of state administratively dissolved Green Rock 

and Clear Island in 2017 for failure to file required annual reports. 

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4 

RELATED PERSON AND ENTITY 

10. Eric T. Landis, age 54, is a resident of Charlottesville, Virginia. In November 

2018, the Commission charged Landis and a Virginia corporation he controlled, Ridgeview 

Capital Management LLC, for their roles in the conduct summarized in this complaint, and the 

U.S. Attorney for the District of Massachusetts charged Landis in a parallel criminal action.  

11. The Commission’s action against Landis alleged that from at least January 2015 

through January 2018, Landis placed thousands of manipulative trades in over 90 microcap 

companies, including about 1,300 wash trades between multiple accounts in the names of Landis, 

Landis’s relative, Ridgeview, and Clear Island. On August 8, 2019, the court entered a judgment 

against Landis and Ridgeview in the Commission’s action, ordering permanent injunctive relief, 

penny stock bars, and injunctions prohibiting them from trading or promoting certain stocks. 

Monetary relief remains pending in the civil action.  

12. Landis pled guilty in the criminal action in January 2019, and the court sentenced 

him on January 24, 2020, to six months in prison, two years of supervised release, and a $50,000 

fine. On August 10, 2020, the court entered an order of forfeiture against Landis in the amount of 

$2,505,488.  

FACTS 

13.  “Wash” or “match” trading is a particular form of manipulative trading, where 

one person trades between the same or multiple accounts that the person controls or has access 

to. In reality, the same person is placing the buy and sell orders through multiple accounts, and 

when those orders execute against each other, it is really the same person on both the buy and 

sell side of the transaction. In this form of manipulative trading, the trader effectively trades with 

him or herself and creates a false appearance of active trading in a company’s stock, commonly 

Case 1:20-cv-11746   Document 1   Filed 09/24/20   Page 4 of 11



5 

raising or depressing the price of the stock, all for the purpose of inducing others to buy the stock 

in future transactions.     

14. Fraud schemes effectuated through manipulative trading often involve small (i.e., 

“microcap”) companies, particularly companies whose stocks trade infrequently. When microcap 

companies are used in such schemes, the small market for their stock makes it possible to 

manipulate reported transactions and prices, thereby creating an appearance of increased 

demand. With thinly traded microcap stocks, it is often the case that, when manipulations stop, 

market demand for the stocks returns to pre-manipulation levels. That is, there is often little to no 

trading at all; the stock becomes worthless; and retail investors who purchased during the 

manipulation are left holding stock that they cannot sell and that is essentially worth nothing.  

15. During the Relevant Period, clients holding large quantities of stock that they 

hoped to dump into the retail market hired Defendant to generate public interest in various 

companies whose stock the clients hoped to sell. In turn, Defendant delivered on his promise of 

an appearance of increased interest in the stocks by paying Landis, who in turn made thousands 

of wash trades in the stock of the companies.   

16. Defendant knew, or was reckless in not knowing, that many or all of his clients 

routinely violated various securities laws, including by pumping up demand, or paying others to 

pump up demand, in a company’s stock prior to dumping their shares. Defendant intentionally 

avoided learning the details of his clients’ activities, keeping himself willfully blind to the 

illegality of their conduct. Defendant routinely minimized his knowledge by communicating with 

the clients only about the stock symbol they wanted Defendant to promote.   

17. Defendant, likewise, intentionally avoided learning the precise details of Landis’s 

manipulative trading. Defendant well understood, however, that he and Landis were paid to 

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6 

generate an appearance of increased trading volume in the clients’ chosen stocks. And Defendant 

knew that Landis generated such market movement by deceiving public investors through his 

wash trading.   

18. Landis purported to be self-employed as a stock promoter. To facilitate this 

image, Landis established, paid for, and controlled email distribution lists designed to tout the 

stock of publicly traded companies, including The Street Alert, The Penny Reporter, and The 

Stock Beacon. Defendant incorporated Florida companies with the names The Street Alert LLC 

and ThePennyReporter.com LLC, but he did not actively conduct business under those names.  

19. Defendant knew, or was reckless in not knowing, that Landis’s mailing lists were 

insufficient to generate the kind of impact on stock price and volume that Defendant and Landis 

promised to deliver for the clients who engaged their services. Landis did not send promotional 

emails to nearly the number of subscribers he communicated to the clients that he would. And, in 

some instances, Landis did not send any emails at all. Instead of relying on promotional 

campaigns, Defendant paid Landis and provided him access to Clear Island’s brokerage 

accounts. Landis, in turn, used Clear Island’s accounts, among others, to place thousands of wash 

trades, thereby creating an appearance of increased public trading in the stocks Defendant and 

Landis had been paid to “promote.”  

20. One example of the fraud occurred in June 2017, when clients paid Defendant and 

Landis to promote the securities of BioHemp International Inc. and other microcap companies 

they controlled. 

21. On June 23, 2017, the clients wired Green Rock $104,000. The same day, 

Defendant, through Green Rock, paid $46,000 to Landis’s Ridgeview entity.  

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7 

22. Also on June 23, 2017, Defendant wired $35,000 from Green Rock to Clear 

Island. And a few days later, Defendant wired approximately $35,000 from the Clear Island bank 

account to one of its brokerage accounts.  

23. Defendant made the transfers from Green Rock to Clear Island at Landis’s 

direction. Landis told Defendant that Landis needed the money to conduct trading in the Clear 

Island brokerage accounts. Defendant intended that Landis would use the money to make trades 

and generate an appearance of market interest in the stocks the clients were paying them to 

promote. 

24. Between June 27, 2017, and June 30, 2017, Landis used multiple accounts to 

make manipulative trades in BioHemp, buying and selling over 230,000 shares between accounts 

Landis controlled. Included among Landis’s manipulative trades in BioHemp on June 28, 2017, 

were purchases and sales of 14,000 shares between Clear Island and accounts in the name of 

Ridgeview and Landis’s relative. 

25. Another example of the fraud occurred in September and October 2017, when 

clients paid Defendant and Landis to promote Drone Guarder Inc. and other microcap 

companies. 

26. On September 18, 2017, the clients wired Green Rock $69,990. The next day 

Defendant wrote a check to Landis’s Ridgeview entity for $29,500.  

27. Between September 20, 2017, and October 24, 2017, Landis used multiple 

accounts to make manipulative trades in Drone Guarder. Included among Landis’s manipulative 

trades in Drone Guarder were 61 wash trades of over 500,000 shares between Clear Island 

accounts and accounts in the name of Ridgeview, Landis, and Landis’s relative.  

* * * 

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8 

28. In aggregate, from June 2017 to March 2018, Defendant, through Green Rock, 

received $759,890 from clients operating fraudulent schemes.   

29. Out of the nearly $760,000 that Green Rock received from Defendant’s clients, 

Defendant paid $324,000 to Landis through Ridgeview, approximately $100,000 to other 

individuals connected to the clients, and $64,000 to Clear Island for Landis to use to buy stocks 

as part of the scheme. Defendant kept approximately $272,000 for himself.  

30. By reason of the conduct described herein, Defendant defrauded investors in 

multiple publicly traded companies by helping to create the false appearance of increased market 

activity in the securities of those companies. Defendant’s and Landis’s conduct created apparent 

trading activity in the stock of those companies for the purpose of inducing retail investors to 

purchase stock of those companies at inflated prices.  

FIRST CLAIM FOR RELIEF 

FRAUD IN THE OFFER OR SALE OF SECURITIES 
(Violations of Sections 17(a)(1) and (3) of the Securities Act) 

 
31. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1-30 above. 

32. By reason of the conduct described above, Defendant, in the offer or sale of 

securities, by the use of the means or instrumentalities of interstate commerce or of the mails, 

directly or indirectly, acting with the requisite degree of knowledge or state of mind (i) employed 

devices, schemes, or artifices to defraud; and (ii) engaged in transactions, practices, or courses of 

business which operated or would operate as a fraud or deceit upon any persons, including 

purchasers or sellers of the securities.  

33. By reason of the conduct described above, Defendant violated 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 

FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES 
(Violations of Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder) 

 
34. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1-33 above. 

35. By reason of the conduct described above, Defendant, directly or indirectly, in 

connection with the purchase or sale of securities, by the use of the means or instrumentalities of 

interstate commerce or of the mails, or of any facility of any national securities exchange, 

intentionally, knowingly, or recklessly, (i) employed devices, schemes, or artifices to defraud; 

and (ii) engaged in acts, practices, or courses of business which operated or would operate as a 

fraud or deceit upon any persons, including purchasers or sellers of the securities. 

36. By reason of the conduct described above, Defendant violated Exchange Act 

Section 10(b) [15 U.S.C. § 78j(b)] and Rules 10b-5(a) and (c) [17 C.F.R. § 240.10b-5(a) and (c)] 

thereunder. 

THIRD CLAIM FOR RELIEF 

AIDING AND ABETTING 
(Violations of Section 20(e) of the Exchange Act) 

 
37. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1-36 above. 

38. Sections 9(a)(1) and (2) of the Exchange Act [15 U.S.C. §78i(a)(1)-(2)] make it 

unlawful for any person, directly or indirectly, by the use of the mails or any means or 

instrumentality of interstate commerce, or of any facility of any national securities exchange, 

(1) to effect any transaction in a security which involves no change in the beneficial ownership 

of the security and to enter substantially similar orders for the purchase and sale of any security 

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for the purpose of creating a false or misleading appearance of active trading in the security; or 

(2) to effect a series of transactions in a security creating actual or apparent active trading in such 

security, or raising or depressing the price of such security, for the purpose of inducing the 

purchase or sale of such security by others. 

39. By engaging in the conduct described above, Landis violated Sections 9(a)(1) 

and (2) of the Exchange Act [15 U.S.C. § 78i(a)(1) and (2)]. 

40. Defendant knowingly or recklessly provided substantial assistance to Landis in 

his violations of Sections 9(a)(1) and (2) of the Exchange Act. 

41. By reason of this conduct, Defendant violated Section 20(e) of the Exchange Act 

[15 U.S.C. § 78t(e)].  

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court: 

A. Enter a permanent injunction restraining Defendant and each of his officers, 

agents, servants, employees, attorneys, and those persons in active concert or participation with 

them who receive actual notice of the injunction by personal service or otherwise, including 

email, fax, or overnight delivery service, from directly or indirectly engaging in the conduct 

described above, or in conduct of similar purport and effect, in violation of:  

1. Section 9(a) of the Exchange Act [15 U.S.C. 78i(a)];  
2. Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 

thereunder [17 C.F.R. 240.10b-5]; and 
3. Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

B. Order the Defendant be unconditionally and permanently prohibited from 

participating in any offering of a penny stock, as authorized by Section 20(g) of the Securities 

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

C. Order the Defendant to disgorge his ill-gotten gains, plus prejudgment interest; 

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D. Order the Defendant to pay appropriate civil monetary penalties in accordance 

with Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the 

Exchange Act [15 U.S.C. § 78u(d)(3)];  

E. Retain jurisdiction over this action to implement and carry out the terms of all 

orders and decrees that may be entered; and 

F. Grant such other and further relief as this Court may deem just and proper. 

JURY DEMAND 

The Commission demands a jury in this matter for all claims so triable.  

 

Respectfully submitted, 
 
SECURITIES AND EXCHANGE COMMISSION 
 
By its attorneys, 
 
/s/ Jonathan R. Allen     
Eric A. Forni (Mass. Bar No. 669685) 
Kathleen B. Shields (Mass Bar No. 637438) 
Jonathan Allen (Mass Bar No. 680729) 
Amy Gwiazda (Mass Bar No.663494) 
Boston Regional Office 
33 Arch Street, 24th Floor 
Boston, MA  02110 
Phone:  (617) 573-4563 (Allen direct) 
Fax:  (617) 573-4590 

Dated:  September 24, 2020 [email protected] 

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