Securities and Exchange Commission v. Gregory Lamont Drake

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DAVID D. WHIPPLE (Utah State Bar No. 17347)
PRO HAC VICE APPLICATION PENDING
[email protected]
AMY J. OLIVER (Utah State Bar No. 8785)
PRO HAC VICE APPLICATION PENDING
[email protected]
Counsel for Plaintiff
U.S. Securities and Exchange Commission
351 South West Temple, Suite 6.100
Salt Lake City, UT 84101-1950
Tel.: (801) 524-5796
Fax: (801) 524-3558

Local Counsel:
AMY JANE LONGO (Cal. Bar No. 198304)
444 S. Flower Street, Suite 900
Los Angeles, California 90071
Email: [email protected]
Phone: (323) 965-3835
Fax: (213)-443-1904

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION

SECURITIES AND EXCHANGE
COMMISSION,

Plaintiff,
vs.
GREGORY LAMONT DRAKE, an
individual; STEPHEN KENNETH
GROSSMAN, an individual;
STEPHEN SCOTT MOLESKI, an
individual; JASON DAVID ST.
AMOUR, an individual; and
DAVID ALAN WOLFSON, an
individual,
Defendants.

Case No.

COMPLAINT

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Plaintiff, Securities and Exchange Commission (the “Commission”), alleges
as follows:
JURISDICTION AND VENUE
1. The Commission brings this action pursuant to Sections 20(b) and
20(d) of the Securities  Act [15 U.S.C. § 77t(b) and (g)] and Sections 21(d) and (e)
of the Exchange Act [15 U.S.C. § 78u(d) and (e)] to enjoin such acts, practices,
and courses of business, and to obtain disgorgement, prejudgment interest, civil
money penalties, and such other and further relief as this Court may deem just and
appropriate.
2. Defendants were involved in the offer and sale of the common stock
of numerous microcap companies, which are each a “security” as that term is
defined under Section 2(a)(1) of the Securities Act [15 U.S.C. § 77b(a)(1)] and
Section 3(a)(10) of the Exchange Act [15 U.S.C. § 78c(a)(10)].
3. Defendants, directly or indirectly, made use of the mails or the means
or instrumentalities of interstate commerce in connection with the conduct alleged
in this Complaint.
4. This Court has subject matter jurisdiction over this action pursuant to
Section 22 of the Securities Act [15 U.S.C. § 77v], Sections 21(d) and 27 of the
Exchange Act [15 U.S.C. §§ 78u(d) and 78aa], and 28 U.S.C. § 1331.
5. Venue in this District is proper because Defendants are found, inhabit,
and/or transacted business in the Central District of California and because one or
more acts or transactions constituting the violations occurred in the Central District
of California.
SUMMARY OF THE ACTION
6. Gregory Lamont Drake (“Drake”), Stephen Kenneth Grossman
(“Grossman”), Stephen Scott Moleski (“Moleski”), Jason David St. Amour (“St.
Amour”), and David Alan Wolfson (“Wolfson”) (collectively “Defendants”)
operated call centers and/or worked in call centers that were engaged in soliciting

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investors to purchase the securities of numerous microcap companies whose shares
traded on the over-the-counter market.
7. Without telling investors, Defendants Drake, St. Amour, and Wolfson
coordinated the trades between the sellers of the shares and solicited investors to
enable the sellers to offload their shares without significantly affecting the market
for the thinly-traded stock.
8. While they engaged in these solicitations, Defendants were neither
registered with the Commission as brokers or dealers nor associated with a broker
or dealer registered with the Commission.
9. Defendants earned transaction-based compensation for their
solicitation activities, which ranged from approximately 18% to 50% of investment
proceeds.
10. By engaging in this conduct, as further described herein, Defendants
violated and, unless restrained and enjoined by this Court, may continue to violate
Section 15(a)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) [15
U.S.C. § 78o(a)(1)].
11. Additionally, by engaging in this conduct, as further described herein,
Defendants Drake, St. Amour, and Wolfson violated and, unless restrained and
enjoined by this Court, may continue to violate Section 17(a)(1) and (3) of the
Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)(1) and (3)], Section
10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Exchange Act Rule 10b–5(a)
and (c) [17 C.F.R. § 240.10b–5(a) and (c)].
DEFENDANTS
12. Gregory Lamont Drake, born in 1976, is last known to reside in
Inglewood, California and operated a securities solicitation call center in Los
Angeles County, California until approximately February 2018.
13. Stephen Kenneth Grossman, born 1949, is last known to reside in
Woodland Hills, California. Grossman worked as a solicitor in one of Wolfson’s

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call centers and eventually became the manager of Wolfson’s Thousand Oaks call
center.
14. Stephen Scott Moleski, born 1959, is last known to reside in
Woodland Hills, California. Moleski worked as a solicitor in one of Wolfson’s call
centers and eventually became the manager of Wolfson’s Garden Grove call
center.
15. Jason David St. Amour, born 1969, is last known to reside in
Beaconsfield, Canada, but also maintains a residence in Redondo Beach,
California. St. Amour has been involved in various investor-solicitation operations,
including Drake’s and Wolfson’s operations, in addition to briefly running his own
operation out of Montreal, Canada.
16. David Alan Wolfson, born 1956, is last known to reside in Los
Angeles, California. Wolfson operated four securities solicitation call centers in
California until approximately March 2018.
FACTS
          Wolfson
17. From at least October 2014 until March 2018, Defendant Wolfson
operated four call centers in California for the purpose of soliciting investors to
purchase various securities: two in Tarzana, California, one in Garden Grove,
California, and one in Thousand Oaks, California.
18. Wolfson hired various individuals to work as solicitors in these call
centers as part of the securities solicitation business.
          Grossman
19. In or around March 2016, Wolfson hired defendant Grossman to work
as an investor solicitor in one of his Tarzana, California call centers.
20. As an investor solicitor, Grossman cold called prospective investors,
pitched them on an investment in the promoted security, and assisted investors in
purchasing the promoted security.

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21. In or around the spring of 2017, Wolfson promoted Grossman to work
as the manager of his Thousand Oaks call center.
22. As manager, Grossman both oversaw the work of several individual
solicitors and continued to directly solicit investors.
23. Wolfson paid Grossman commissions of at least 18% on his own sales
and an additional 5% commission on the sales of those he supervised.
 Moleski
24. In or around the spring of 2015, Wolfson hired defendant Moleski to
work as a solicitor in one of his call centers.
25. As an investor solicitor, Moleski cold called prospective investors,
pitched them on an investment in the promoted security, and assisted investors in
purchasing the promoted security.
26. Sometime in 2017, Wolfson promoted Moleski to work as the
manager of his Garden Grove call center.
27. As manager, Moleski both over saw the work of several other
individual solicitors and continued to directly solicit investors.
28. Wolfson paid Moleski commissions of at least 20% on his own sales
and an additional 5% commission on the sales of those he supervised.
 Drake
29. Sometime in or around early 2016, Wolfson hired defendant Drake to
work as a solicitor in Wolfson’s Garden Grove call center.
30. As an investor solicitor, Drake cold called prospective investors,
pitched them on an investment in the promoted security, and assisted investors in
purchasing the promoted security.
31. Wolfson paid Drake a commission of at least 15% of investor
proceeds.
32. After working for the Wolfson operation for several months, Drake
left in or around the late summer of 2016 over a disagreement over his

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compensation.
33. Drake then set up his own securities-solicitation call center in
California that operated until approximately February 2018.
 St. Amour
34. During 2015, Defendant St. Amour was working for an investor-
solicitation call center in the Philippines run by a British citizen, M.M.
35. St. Amour became dissatisfied with working for M.M. and began
searching for other opportunities.
36. Through his search, he came across a Craigslist advertisement that
Wolfson posted recruiting securities solicitors.
37. St. Amour contacted Wolfson, and although St. Amour never actually
worked in one of Wolfson’s call centers, he introduced Wolfson to M.M.
38. Through this connection, Wolfson and M.M. began a partnership
pursuant to which Wolfson would provide M.M. with stocks to promote, and M.M.
would give Wolfson a portion of the commissions earned through M.M.’s
operation.
39. For connecting Wolfson and M.M., St. Amour received a 9%
commission on all deals the two worked together. Eventually, that commission was
cut to 1%.
40. For a brief period in or around the summer of 2016, St. Amour
operated his own securities solicitation call center in Montreal, Canada.
41. After shutting down his Montreal operation, St. Amour worked as a
solicitor in Drake’s Los Angeles County call center, where he worked until late
2017.
The Matched-Trading Scheme
42. While involved in the securities solicitation business, Drake,
Grossman, Moleski, St. Amour, and Wolfson participated in a matched-trading
scheme that generally operated as follows:

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a. The call-center operators (i.e., Wolfson, St. Amour, and Drake),
would enter into arrangements with certain individuals,
hereinafter referred to as the “selling shareholders,” who would
obtain large blocks of at least nominally unrestricted shares of
microcap issuers.
b. The selling shareholders sought to profit quickly by selling their
shares into the market, but understood that selling large
amounts of thinly-traded microcap stock through standard
brokerage sell orders would take a long time (if using limit
orders) and/or cause a collapse in the share price (if using
market orders).
c. To avoid these results, a selling shareholder would hire the call-
center operators to engage their call centers in soliciting
investors to purchase the selling shareholders’ shares.
d. At the call-center operators’ direction, the solicitors (such as
Grossman and Moleski) used scripts and purchased lead lists to
cold call prospective investors throughout the United States and
inquired whether the prospect had an active brokerage account
with online order-entry functionality.
e. If the prospective investor had such a brokerage account, the
solicitors were instructed to pitch the promoted security—i.e.,
the one the selling shareholder owned and wished to liquidate—
to the prospect.
f. Once a prospective investor was persuaded to purchase the
promoted security and determined how much money he or she
would like to invest, the solicitor would tell the investor that a
“market maker” needed to be contacted to determine the
appropriate share price.

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g. Instead of contacting a market maker, the solicitor (e.g.,
Grossman and Moleski) would pass this information on to the
call-center operator (e.g., Drake, St. Amour, and Wolfson), who
would contact the selling shareholder.
h. The selling shareholder would then check the then-current level
II quotation (which shows the offers on the ask and bid) for the
subject security and provide the call center-operator with a limit
order price and volume.
i. The call-center operator would communicate that price and
volume to the solicitor, who would pass the information along
to the investor.
j. The solicitor would instruct the investor to enter a purchase
limit order online in the investor’s brokerage account at the
coordinated price. At the same time, the selling shareholder
would place a sell limit order for the same amount of shares at
the same price.
k. Through these means, the investor’s buy order and the selling
shareholder’s sell order were likely to match, thus enabling the
selling shareholder to liquidate his or her position in the subject
security piecemeal into a market with ready purchasers.
l. The source of the purchased shares (i.e., the selling
shareholders) was not disclosed to investors, who were instead
led to believe that they were participating in standard open
market transactions.
m. The call-center operators and the selling shareholder would
discuss how many shares of the investor’s order were
“captured” (i.e., matched between the investor and the selling
shareholder), and the selling shareholder would pay the call-

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center operators a commission that was generally between 25%
and 50% of the invested funds.
n. The call-center operators then paid a portion of these
commissions to the solicitor who was responsible for the trade.
43. During the timeframe that Wolfson ran his call centers, his operation
solicited investors to purchase the shares of at least 41 microcap companies with
the following ticker symbols: ADAD, AGYP, ASNT, BBGP, BMXI, CSSI,
CGLD, DAVC, ECEZ, ETKR, GMER, GMNI, GOPH, GVCL, GYST, HVST,
ITEC, ITLL, KAST, KPOC, LBTD, LSDC/SIRC, MCPI, MIHI, MJLB, MMEG,
NSRS, NWGI, PCFP, PYTG, REAC, SCNA, SHRV, SIGO, SMPI, SOAN,
SSWH, TPTW, TRBO, UATG, and WRIT.
44. For his work as a call-center operator, Wolfson received gross
commissions from the selling shareholders of at least $10,008,133.49 between
October 2014 and February 2018, a portion of which he used to pay the solicitors
working in his call centers.
45. Wolfson paid Grossman gross commissions of at least $259,585.68
between March 2016 and January 2018 for Grossman’s work as a
solicitor/manager.
46. Wolfson paid Moleski gross commissions of at least $260,679.15
between May 2015 and March 2018 for Moleski’s work as a solicitor/manager.
47. During the timeframe that Drake ran his call center, his operation
solicited investors to purchase the shares of at least six microcap companies with
the following ticker symbols: GMNI, KPOC, SIRC, SMAA, TPTW, and UATG.
48. Collectively, Wolfson and the selling shareholders paid Drake gross
commissions of at least $748,654.43 between May 2016 and February 2018, a
portion of which Drake used to pay the solicitors working in his call center.
49. Between July 2016 and November 2017, St. Amour earned gross
commissions of at least $72,021.00 for his involvement in the Wolfson operation,

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the Drake operation, and through St. Amour’s Montreal, Canada investor
solicitation operation.
FIRST CLAIM FOR RELIEF
Violations of Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)]
(Against each Defendant)
50. The Commission re-alleges and incorporates by reference each and
every allegation in paragraphs 1–49, inclusive, as if they were fully set forth
herein.
51. By engaging in the conduct described above, Defendants:
a. engaged in the business of effecting transactions in securities
for the account of others; and
b. directly or indirectly, made use of the mails or the means or
instrumentalities of interstate commerce to effect transactions in, or to induce or
attempt to induce the purchase or sale of, securities without being registered as a
broker or dealer with the Commission or associated with a broker or dealer
registered with the Commission.
52. By reason of the foregoing, Defendants violated and, unless enjoined,
will continue to violate Sections 15(a)(1) of the Exchange Act [15 U.S.C.
§ 78o(a)(1)].
SECOND CLAIM FOR RELIEF
Violations of Section 17(a)(1) and (3) of the Securities Act [15 U.S.C. §
77q(a)(1) and (3)]
(Against Defendants Drake, St. Amour, and Wolfson)
53. The Commission re-alleges and incorporates by reference each and
every allegation in paragraphs 1–49, inclusive, as if they were fully set forth
herein.
54. By engaging in the conduct described above, Defendants Drake, St.
Amour, and Wolfson, directly or indirectly, individually or in concert with others,

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in the offer and sale of securities, by use of the means and instruments of
transportation and communication in interstate commerce or by use of the mails
have
a. employed devices, schemes, or artifices to defraud; and
b. engaged in transactions, practices, or courses of business which
operated or would operate as a fraud or deceit.
55. With respect to violations of Sections 17(a)(3) of the Securities Act,
each of Defendants Drake, St. Amour, and Wolfson was at least negligent in their
conduct.
56. With respect to violations of Section 17(a)(1) of the Securities Act,
each of Defendants Drake, St. Amour, and Wolfson engaged in the above-
referenced conduct knowingly or with sever recklessness.
57. By reason of the foregoing, Defendants Drake, St. Amour, and
Wolfson violated and, unless enjoined, will continue to violate Sections 17(a)(1)
and (3) of the Securities Act [15 U.S.C. § 77q(a)(1) and (3)].
THIRD CLAIM FOR RELIEF
Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and
Exchange Act Rule 10b–5(a) and (c) [17 C.F.R. § 240.10b–5(a) and (c)]
(Against Defendants Drake, St. Amour, and Wolfson)
58. The Commission re-alleges and incorporates by reference each and
every allegation in paragraphs 1–49, inclusive, as if they were fully set forth
herein.
59. By engaging in the conduct described above, Defendants Drake, St.
Amour, and Wolfson, directly or indirectly, in connection with the purchase or sale
of securities, by use of the means and instrumentalities of interstate commerce or
by use of the mails have
a. employed devices, schemes, and artifices to defraud; and
b. engaged in acts, practices, and course of business which

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operated as a fraud and deceit upon purchasers, prospective purchasers, and other
persons.
60. Each of Defendants Drake, St. Amour, and Wolfson engaged in the
above-referenced conduct knowingly or with severe recklessness.
61. By reason of the foregoing, Defendants Drake, St. Amour, and
Wolfson violated and, unless enjoined, will continue to violate Section 10(b) of the
Exchange Act [15 U.S.C. § 78j(b)] and Exchange Act Rule 10b–5(a) and (c) [17
C.F.R. § 240.10b–5(a) and (c)].
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court enter a
final judgment:
I.
Permanently restraining and enjoining Defendants from, directly or
indirectly, engaging in conduct in violation of Section 15(a)(1) of the Exchange
Act [15 U.S.C. § 78o(a)(1)];
II.
Permanently restraining and enjoining Defendants Drake, St. Amour, and
Wolfson from, directly or indirectly, engaging in conduct in violation of Section
17(a) of the Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act
[15 U.S.C. § 78j(b)], and Exchange Act Rule 10b–5 [17 C.F.R. § 240.10b–5];
III.
Permanently restraining and enjoining Defendants from directly or
indirectly, including, but not limited to, through any entity owned or controlled any
of them, soliciting any person or entity to purchase or sell any security;
IV.
Ordering Defendants to disgorge all ill-gotten gains or unjust enrichment
derived from the activities set forth in this Complaint, together with prejudgment
interest thereon;

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V.
Ordering Defendants to pay a civil penalty pursuant to Section 21(d)(3) of
the Exchange Act [15 U.S.C. § 78u(d)(3)] and, as to Drake, St. Amour, and
Wolfson, also Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)];
VI.
Retaining jurisdiction of this action in accordance with the principles of
equity and the Federal Rules of Civil Procedure in order to implement and carry
out the terms of all orders and decrees that may be entered, or to entertain any
suitable application or motion for additional relief within the jurisdiction of this
Court; and,
VII.
Granting such other and further relief as this Court may deem just, equitable,
or necessary in connection with the enforcement of the federal securities laws and
for the protection of investors.

Dated: January 15, 2020

/s/ Amy Jane Longo
Amy Jane Longo
Attorney for Plaintiff
Securities and Exchange Commission

Complaints and Other Initiating Documents
2:20-cv-00405 Securities and Exchange Commission v. Drake et al
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
Notice of Electronic Filing
The following transaction was entered by Longo, Amy on 1/15/2020 at 7:18 AM PST and filed on
1/15/2020
Case Name:Securities and Exchange Commission v. Drake et al
Case Number:2:20-cv-00405
Filer:Securities and Exchange Commission
Document Number:1
Docket Text:
COMPLAINT No Fee Required - US Government, filed by Plaintiff Securities and
Exchange Commission. (Attorney Amy J Longo added to party Securities and Exchange
Commission(pty:pla))(Longo, Amy)
2:20-cv-00405 Notice has been electronically mailed to:
Amy J Longo     [email protected], [email protected], [email protected], [email protected]
2:20-cv-00405 Notice has been delivered by First Class U. S. Mail or by other means BY THE
FILER to :
The following document(s) are associated with this transaction:
Document description:Main Document
Original filename:F:\marcelom\Drake (SLRO)\Complaint (FINAL) (for filing).pdf
Electronic document Stamp:
[STAMP cacdStamp_ID=1020290914 [Date=1/15/2020] [FileNumber=29097810-0
] [935f431a187a64e315c17dcddc6fc0d9a71f464e5b70a6ef4145c14afff1a862dc5
76b16721733127208ba13b22dc43155cb065159c3470776196fac05799aeb]]

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DAVID D. WHIPPLE (Utah State Bar No. 17347) 
PRO HAC VICE APPLICATION PENDING 
[email protected]  
AMY J. OLIVER (Utah State Bar No. 8785) 
PRO HAC VICE APPLICATION PENDING 
[email protected]  
Counsel for Plaintiff 
U.S. Securities and Exchange Commission 
351 South West Temple, Suite 6.100 
Salt Lake City, UT 84101-1950 
Tel.: (801) 524-5796 
Fax: (801) 524-3558 
 
Local Counsel: 
AMY JANE LONGO (Cal. Bar No. 198304) 
444 S. Flower Street, Suite 900 
Los Angeles, California 90071 
Email: [email protected] 
Phone: (323) 965-3835 
Fax: (213)-443-1904 
 
 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

WESTERN DIVISION 

 

SECURITIES AND EXCHANGE 
COMMISSION, 

 
Plaintiff, 

vs. 

GREGORY LAMONT DRAKE, an 
individual; STEPHEN KENNETH 
GROSSMAN, an individual; 
STEPHEN SCOTT MOLESKI, an 
individual; JASON DAVID ST. 
AMOUR, an individual; and 
DAVID ALAN WOLFSON, an 
individual,  

Defendants. 

  
Case No.  
 

COMPLAINT 

 

 

 

Case 2:20-cv-00405   Document 1   Filed 01/15/20   Page 1 of 13   Page ID #:1



 

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

as follows:  

JURISDICTION AND VENUE 

1. The Commission brings this action pursuant to Sections 20(b) and 

20(d) of the Securities  Act [15 U.S.C. § 77t(b) and (g)] and Sections 21(d) and (e) 

of the Exchange Act [15 U.S.C. § 78u(d) and (e)] to enjoin such acts, practices, 

and courses of business, and to obtain disgorgement, prejudgment interest, civil 

money penalties, and such other and further relief as this Court may deem just and 

appropriate. 

2. Defendants were involved in the offer and sale of the common stock 

of numerous microcap companies, which are each a “security” as that term is 

defined under Section 2(a)(1) of the Securities Act [15 U.S.C. § 77b(a)(1)] and 

Section 3(a)(10) of the Exchange Act [15 U.S.C. § 78c(a)(10)].  

3. Defendants, directly or indirectly, made use of the mails or the means 

or instrumentalities of interstate commerce in connection with the conduct alleged 

in this Complaint. 

4. This Court has subject matter jurisdiction over this action pursuant to 

Section 22 of the Securities Act [15 U.S.C. § 77v], Sections 21(d) and 27 of the 

Exchange Act [15 U.S.C. §§ 78u(d) and 78aa], and 28 U.S.C. § 1331. 

5. Venue in this District is proper because Defendants are found, inhabit, 

and/or transacted business in the Central District of California and because one or 

more acts or transactions constituting the violations occurred in the Central District 

of California. 

SUMMARY OF THE ACTION 

6. Gregory Lamont Drake (“Drake”), Stephen Kenneth Grossman 

(“Grossman”), Stephen Scott Moleski (“Moleski”), Jason David St. Amour (“St. 

Amour”), and David Alan Wolfson (“Wolfson”) (collectively “Defendants”) 

operated call centers and/or worked in call centers that were engaged in soliciting 

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investors to purchase the securities of numerous microcap companies whose shares 

traded on the over-the-counter market.  

7. Without telling investors, Defendants Drake, St. Amour, and Wolfson 

coordinated the trades between the sellers of the shares and solicited investors to 

enable the sellers to offload their shares without significantly affecting the market 

for the thinly-traded stock. 

8. While they engaged in these solicitations, Defendants were neither 

registered with the Commission as brokers or dealers nor associated with a broker 

or dealer registered with the Commission.  

9. Defendants earned transaction-based compensation for their 

solicitation activities, which ranged from approximately 18% to 50% of investment 

proceeds.  

10. By engaging in this conduct, as further described herein, Defendants 

violated and, unless restrained and enjoined by this Court, may continue to violate 

Section 15(a)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 

U.S.C. § 78o(a)(1)]. 

11. Additionally, by engaging in this conduct, as further described herein, 

Defendants Drake, St. Amour, and Wolfson violated and, unless restrained and 

enjoined by this Court, may continue to violate Section 17(a)(1) and (3) of the 

Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)(1) and (3)], Section 

10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Exchange Act Rule 10b–5(a) 

and (c) [17 C.F.R. § 240.10b–5(a) and (c)]. 

DEFENDANTS 

12. Gregory Lamont Drake, born in 1976, is last known to reside in 

Inglewood, California and operated a securities solicitation call center in Los 

Angeles County, California until approximately February 2018.  

13. Stephen Kenneth Grossman, born 1949, is last known to reside in 

Woodland Hills, California. Grossman worked as a solicitor in one of Wolfson’s 

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call centers and eventually became the manager of Wolfson’s Thousand Oaks call 

center. 

14. Stephen Scott Moleski, born 1959, is last known to reside in 

Woodland Hills, California. Moleski worked as a solicitor in one of Wolfson’s call 

centers and eventually became the manager of Wolfson’s Garden Grove call 

center. 

15. Jason David St. Amour, born 1969, is last known to reside in 

Beaconsfield, Canada, but also maintains a residence in Redondo Beach, 

California. St. Amour has been involved in various investor-solicitation operations, 

including Drake’s and Wolfson’s operations, in addition to briefly running his own 

operation out of Montreal, Canada. 

16. David Alan Wolfson, born 1956, is last known to reside in Los 

Angeles, California. Wolfson operated four securities solicitation call centers in 

California until approximately March 2018. 

FACTS 

 Wolfson 

17. From at least October 2014 until March 2018, Defendant Wolfson 

operated four call centers in California for the purpose of soliciting investors to 

purchase various securities: two in Tarzana, California, one in Garden Grove, 

California, and one in Thousand Oaks, California. 

18. Wolfson hired various individuals to work as solicitors in these call 

centers as part of the securities solicitation business. 

 Grossman 

19. In or around March 2016, Wolfson hired defendant Grossman to work 

as an investor solicitor in one of his Tarzana, California call centers. 

20. As an investor solicitor, Grossman cold called prospective investors, 

pitched them on an investment in the promoted security, and assisted investors in 

purchasing the promoted security. 

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21. In or around the spring of 2017, Wolfson promoted Grossman to work 

as the manager of his Thousand Oaks call center. 

22. As manager, Grossman both oversaw the work of several individual 

solicitors and continued to directly solicit investors. 

23. Wolfson paid Grossman commissions of at least 18% on his own sales 

and an additional 5% commission on the sales of those he supervised. 

 Moleski 

24. In or around the spring of 2015, Wolfson hired defendant Moleski to 

work as a solicitor in one of his call centers. 

25. As an investor solicitor, Moleski cold called prospective investors, 

pitched them on an investment in the promoted security, and assisted investors in 

purchasing the promoted security. 

26. Sometime in 2017, Wolfson promoted Moleski to work as the 

manager of his Garden Grove call center. 

27. As manager, Moleski both over saw the work of several other 

individual solicitors and continued to directly solicit investors. 

28. Wolfson paid Moleski commissions of at least 20% on his own sales 

and an additional 5% commission on the sales of those he supervised. 

 Drake 

29. Sometime in or around early 2016, Wolfson hired defendant Drake to 

work as a solicitor in Wolfson’s Garden Grove call center. 

30. As an investor solicitor, Drake cold called prospective investors, 

pitched them on an investment in the promoted security, and assisted investors in 

purchasing the promoted security. 

31. Wolfson paid Drake a commission of at least 15% of investor 

proceeds. 

32. After working for the Wolfson operation for several months, Drake 

left in or around the late summer of 2016 over a disagreement over his 

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compensation. 

33. Drake then set up his own securities-solicitation call center in 

California that operated until approximately February 2018. 

 St. Amour 

34. During 2015, Defendant St. Amour was working for an investor-

solicitation call center in the Philippines run by a British citizen, M.M. 

35. St. Amour became dissatisfied with working for M.M. and began 

searching for other opportunities. 

36. Through his search, he came across a Craigslist advertisement that 

Wolfson posted recruiting securities solicitors. 

37. St. Amour contacted Wolfson, and although St. Amour never actually 

worked in one of Wolfson’s call centers, he introduced Wolfson to M.M. 

38. Through this connection, Wolfson and M.M. began a partnership 

pursuant to which Wolfson would provide M.M. with stocks to promote, and M.M. 

would give Wolfson a portion of the commissions earned through M.M.’s 

operation. 

39. For connecting Wolfson and M.M., St. Amour received a 9% 

commission on all deals the two worked together. Eventually, that commission was 

cut to 1%. 

40. For a brief period in or around the summer of 2016, St. Amour 

operated his own securities solicitation call center in Montreal, Canada. 

41. After shutting down his Montreal operation, St. Amour worked as a 

solicitor in Drake’s Los Angeles County call center, where he worked until late 

2017. 

The Matched-Trading Scheme 

42. While involved in the securities solicitation business, Drake, 

Grossman, Moleski, St. Amour, and Wolfson participated in a matched-trading 

scheme that generally operated as follows: 

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a. The call-center operators (i.e., Wolfson, St. Amour, and Drake), 

would enter into arrangements with certain individuals, 

hereinafter referred to as the “selling shareholders,” who would 

obtain large blocks of at least nominally unrestricted shares of 

microcap issuers. 

b. The selling shareholders sought to profit quickly by selling their 

shares into the market, but understood that selling large 

amounts of thinly-traded microcap stock through standard 

brokerage sell orders would take a long time (if using limit 

orders) and/or cause a collapse in the share price (if using 

market orders). 

c. To avoid these results, a selling shareholder would hire the call-

center operators to engage their call centers in soliciting 

investors to purchase the selling shareholders’ shares. 

d. At the call-center operators’ direction, the solicitors (such as 

Grossman and Moleski) used scripts and purchased lead lists to 

cold call prospective investors throughout the United States and 

inquired whether the prospect had an active brokerage account 

with online order-entry functionality. 

e. If the prospective investor had such a brokerage account, the 

solicitors were instructed to pitch the promoted security—i.e., 

the one the selling shareholder owned and wished to liquidate—

to the prospect. 

f. Once a prospective investor was persuaded to purchase the 

promoted security and determined how much money he or she 

would like to invest, the solicitor would tell the investor that a 

“market maker” needed to be contacted to determine the 

appropriate share price. 

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g. Instead of contacting a market maker, the solicitor (e.g., 

Grossman and Moleski) would pass this information on to the 

call-center operator (e.g., Drake, St. Amour, and Wolfson), who 

would contact the selling shareholder. 

h. The selling shareholder would then check the then-current level 

II quotation (which shows the offers on the ask and bid) for the 

subject security and provide the call center-operator with a limit 

order price and volume. 

i. The call-center operator would communicate that price and 

volume to the solicitor, who would pass the information along 

to the investor. 

j. The solicitor would instruct the investor to enter a purchase 

limit order online in the investor’s brokerage account at the 

coordinated price. At the same time, the selling shareholder 

would place a sell limit order for the same amount of shares at 

the same price. 

k. Through these means, the investor’s buy order and the selling 

shareholder’s sell order were likely to match, thus enabling the 

selling shareholder to liquidate his or her position in the subject 

security piecemeal into a market with ready purchasers. 

l. The source of the purchased shares (i.e., the selling 

shareholders) was not disclosed to investors, who were instead 

led to believe that they were participating in standard open 

market transactions. 

m. The call-center operators and the selling shareholder would 

discuss how many shares of the investor’s order were 

“captured” (i.e., matched between the investor and the selling 

shareholder), and the selling shareholder would pay the call-

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center operators a commission that was generally between 25% 

and 50% of the invested funds. 

n. The call-center operators then paid a portion of these 

commissions to the solicitor who was responsible for the trade. 

43. During the timeframe that Wolfson ran his call centers, his operation 

solicited investors to purchase the shares of at least 41 microcap companies with 

the following ticker symbols: ADAD, AGYP, ASNT, BBGP, BMXI, CSSI, 

CGLD, DAVC, ECEZ, ETKR, GMER, GMNI, GOPH, GVCL, GYST, HVST, 

ITEC, ITLL, KAST, KPOC, LBTD, LSDC/SIRC, MCPI, MIHI, MJLB, MMEG, 

NSRS, NWGI, PCFP, PYTG, REAC, SCNA, SHRV, SIGO, SMPI, SOAN, 

SSWH, TPTW, TRBO, UATG, and WRIT. 

44. For his work as a call-center operator, Wolfson received gross 

commissions from the selling shareholders of at least $10,008,133.49 between 

October 2014 and February 2018, a portion of which he used to pay the solicitors 

working in his call centers. 

45. Wolfson paid Grossman gross commissions of at least $259,585.68 

between March 2016 and January 2018 for Grossman’s work as a 

solicitor/manager. 

46. Wolfson paid Moleski gross commissions of at least $260,679.15 

between May 2015 and March 2018 for Moleski’s work as a solicitor/manager. 

47. During the timeframe that Drake ran his call center, his operation 

solicited investors to purchase the shares of at least six microcap companies with 

the following ticker symbols: GMNI, KPOC, SIRC, SMAA, TPTW, and UATG. 

48. Collectively, Wolfson and the selling shareholders paid Drake gross 

commissions of at least $748,654.43 between May 2016 and February 2018, a 

portion of which Drake used to pay the solicitors working in his call center. 

49. Between July 2016 and November 2017, St. Amour earned gross 

commissions of at least $72,021.00 for his involvement in the Wolfson operation, 

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the Drake operation, and through St. Amour’s Montreal, Canada investor 

solicitation operation. 

FIRST CLAIM FOR RELIEF 

Violations of Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)] 

(Against each Defendant) 

50. The Commission re-alleges and incorporates by reference each and 

every allegation in paragraphs 1–49, inclusive, as if they were fully set forth 

herein.  

51. By engaging in the conduct described above, Defendants: 

a. engaged in the business of effecting transactions in securities 

for the account of others; and 

b. directly or indirectly, made use of the mails or the means or 

instrumentalities of interstate commerce to effect transactions in, or to induce or 

attempt to induce the purchase or sale of, securities without being registered as a 

broker or dealer with the Commission or associated with a broker or dealer 

registered with the Commission. 

52. By reason of the foregoing, Defendants violated and, unless enjoined, 

will continue to violate Sections 15(a)(1) of the Exchange Act [15 U.S.C. 

§ 78o(a)(1)]. 

SECOND CLAIM FOR RELIEF 

Violations of Section 17(a)(1) and (3) of the Securities Act [15 U.S.C. § 

77q(a)(1) and (3)] 

(Against Defendants Drake, St. Amour, and Wolfson) 

53. The Commission re-alleges and incorporates by reference each and 

every allegation in paragraphs 1–49, inclusive, as if they were fully set forth 

herein.  

54. By engaging in the conduct described above, Defendants Drake, St. 

Amour, and Wolfson, directly or indirectly, individually or in concert with others, 

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in the offer and sale of securities, by use of the means and instruments of 

transportation and communication in interstate commerce or by use of the mails 

have 

a. employed devices, schemes, or artifices to defraud; and  

b. engaged in transactions, practices, or courses of business which 

operated or would operate as a fraud or deceit.  

55. With respect to violations of Sections 17(a)(3) of the Securities Act, 

each of Defendants Drake, St. Amour, and Wolfson was at least negligent in their 

conduct. 

56. With respect to violations of Section 17(a)(1) of the Securities Act, 

each of Defendants Drake, St. Amour, and Wolfson engaged in the above-

referenced conduct knowingly or with sever recklessness. 

57. By reason of the foregoing, Defendants Drake, St. Amour, and 

Wolfson violated and, unless enjoined, will continue to violate Sections 17(a)(1) 

and (3) of the Securities Act [15 U.S.C. § 77q(a)(1) and (3)]. 

THIRD CLAIM FOR RELIEF 

Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 

Exchange Act Rule 10b–5(a) and (c) [17 C.F.R. § 240.10b–5(a) and (c)] 

(Against Defendants Drake, St. Amour, and Wolfson) 

58. The Commission re-alleges and incorporates by reference each and 

every allegation in paragraphs 1–49, inclusive, as if they were fully set forth 

herein.  

59. By engaging in the conduct described above, Defendants Drake, St. 

Amour, and Wolfson, directly or indirectly, in connection with the purchase or sale 

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

by use of the mails have 

a. employed devices, schemes, and artifices to defraud; and  

b. engaged in acts, practices, and course of business which 

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operated as a fraud and deceit upon purchasers, prospective purchasers, and other 

persons. 

60. Each of Defendants Drake, St. Amour, and Wolfson engaged in the 

above-referenced conduct knowingly or with severe recklessness. 

61. By reason of the foregoing, Defendants Drake, St. Amour, and 

Wolfson violated and, unless enjoined, will continue to violate Section 10(b) of the 

Exchange Act [15 U.S.C. § 78j(b)] and Exchange Act Rule 10b–5(a) and (c) [17 

C.F.R. § 240.10b–5(a) and (c)]. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court enter a 

final judgment: 

I. 

Permanently restraining and enjoining Defendants from, directly or 

indirectly, engaging in conduct in violation of Section 15(a)(1) of the Exchange 

Act [15 U.S.C. § 78o(a)(1)]; 

II. 

Permanently restraining and enjoining Defendants Drake, St. Amour, and 

Wolfson from, directly or indirectly, engaging in conduct in violation of Section 

17(a) of the Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act 

[15 U.S.C. § 78j(b)], and Exchange Act Rule 10b–5 [17 C.F.R. § 240.10b–5]; 

III. 

Permanently restraining and enjoining Defendants from directly or 

indirectly, including, but not limited to, through any entity owned or controlled any 

of them, soliciting any person or entity to purchase or sell any security; 

IV. 

Ordering Defendants to disgorge all ill-gotten gains or unjust enrichment 

derived from the activities set forth in this Complaint, together with prejudgment 

interest thereon; 

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V. 

Ordering Defendants to pay a civil penalty pursuant to Section 21(d)(3) of 

the Exchange Act [15 U.S.C. § 78u(d)(3)] and, as to Drake, St. Amour, and 

Wolfson, also Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)]; 

VI. 

Retaining jurisdiction of this action in accordance with the principles of 

equity and the Federal Rules of Civil Procedure in order to implement and carry 

out the terms of all orders and decrees that may be entered, or to entertain any 

suitable application or motion for additional relief within the jurisdiction of this 

Court; and, 

VII. 

Granting such other and further relief as this Court may deem just, equitable, 

or necessary in connection with the enforcement of the federal securities laws and 

for the protection of investors. 

 

Dated: January 15, 2020 

 

 /s/ Amy Jane Longo 

Amy Jane Longo 
Attorney for Plaintiff 
Securities and Exchange Commission 

 

Case 2:20-cv-00405   Document 1   Filed 01/15/20   Page 13 of 13   Page ID #:13



Complaints and Other Initiating Documents 
2:20-cv-00405 Securities and Exchange Commission v. Drake et al

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

Notice of Electronic Filing

The following transaction was entered by Longo, Amy on 1/15/2020 at 7:18 AM PST and filed on 
1/15/2020 
Case Name: Securities and Exchange Commission v. Drake et al
Case Number: 2:20-cv-00405
Filer: Securities and Exchange Commission
Document Number:1

Docket Text:
COMPLAINT No Fee Required - US Government, filed by Plaintiff Securities and 
Exchange Commission. (Attorney Amy J Longo added to party Securities and Exchange 
Commission(pty:pla))(Longo, Amy) 

2:20-cv-00405 Notice has been electronically mailed to: 

Amy J Longo     [email protected], [email protected], [email protected], [email protected] 

2:20-cv-00405 Notice has been delivered by First Class U. S. Mail or by other means BY THE 
FILER to : 

The following document(s) are associated with this transaction:

Document description:Main Document 
Original filename:F:\marcelom\Drake (SLRO)\Complaint (FINAL) (for filing).pdf
Electronic document Stamp:
[STAMP cacdStamp_ID=1020290914 [Date=1/15/2020] [FileNumber=29097810-0
] [935f431a187a64e315c17dcddc6fc0d9a71f464e5b70a6ef4145c14afff1a862dc5
76b16721733127208ba13b22dc43155cb065159c3470776196fac05799aeb]]