SEC v. Scott Charles Messier; and Jay Zola Scoratow, No. 2:20-cv-00405, Southern District of California (Jan. 16, 2020) — Complaint

1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
DAVID D. WHIPPLE (Utah State Bar No. 17347)
[email protected]

AMY J. OLIVER (Utah State Bar No. 8785)
[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
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF CALIFORNIA
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
vs.
SCOTT CHARLES MESSIER, an
individual, and
JAY ZOLA SCORATOW, an
individual,
Defendants.
Case No.
COMPLAINT
Plaintiff, Securities and Exchange Commission (the “Commission”), alleges
as follows:
SUMMARY OF THE ACTION
1.Scott Charles Messier (“Messier”) and Jay Zola Scoratow
(“Scoratow”) (collectively, “Defendants”) participated in a securities solicitation
scheme that involved soliciting investors to purchase the securities of numerous
microcap companies whose shares traded on the over-the-counter market.
'20CV0105AGSBAS

2

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
2. Scoratow negotiated deals with the sellers of the microcap shares and
Messier managed various solicitors and coordinated the trades between the sellers
of the shares and investors to enable the sellers to offload their shares without
significantly affecting the market for the thinly traded stock.
3. While engaged in this conduct, Messier was neither registered with
the Commission as brokers or dealers nor associated with a broker or dealer
registered with the Commission.
4. Defendants earned transaction-based compensation for their
solicitation activities, which generally amounted to 5% of investment proceeds for
each Defendant.
5. By engaging in this conduct, as further described herein, Messier
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)].
6. By engaging in this conduct, as further described herein, Scoratow
aided and abetted Messier’s violations of Section 15(a)(1) of the Exchange Act [15
U.S.C. § 78o(a)(1)].
7. By engaging in this conduct, as further described herein, Defendants
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)].
JURISDICTION AND VENUE
8. 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

3

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
money penalties, and such other and further relief as this Court may deem just and
appropriate.
9. 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)].
10. 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.
11. 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.
12. Venue in this District is proper because Defendants are found, inhabit,
and/or transacted business in the Southern District of California and because one or
more acts or transactions constituting the violations occurred in the Southern
District of California.
DEFENDANTS
13. Scott Charles Messier, born in 1963, is last known to reside in San
Marcos, California and managed a securities solicitation operation beginning in or
around mid-2014.
14. Jay Zola Scoratow, born 1956, is last known to reside in La Jolla,
California and assisted Messier with his securities solicitation operation beginning
in or around July 2015.
FACTS
15. While working as a solicitor in the securities solicitation business in
2014, Messier became familiar with various call centers that were engaged in
securities solicitations.

4

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
16. During this timeframe, Messier also became aware of several
individuals, hereinafter referred to as the “selling shareholders,” who would obtain
large blocks of at least nominally unrestricted shares of microcap issuers that they
hoped to sell into the market without significantly impacting the price for those
shares.

17. With his knowledge of the securities solicitation business and his
business relationship with the selling shareholders, Messier began functioning as
an intermediary, connecting the selling shareholders (or their agents) with
securities-solicitation call centers or independent solicitors looking for securities to
promote.
18. At some point during the time that Messier was acting as an
intermediary, he reconnected with an old acquaintance, Scoratow.
19. Messier described to Scoratow the work he was doing in the securities
solicitation business. Based on his knowledge of this type of work, Scoratow felt
that Messier was being undercompensated and offered to partner with Messier and
negotiate Messier’s future deals.
20. Thus, beginning in or around July 2015, Messier and Scoratow began
a partnership pursuant to which Messier was responsible for recruiting solicitors,
working with the solicitors on the deals, and keeping track of the commissions
earned and due, and Scoratow was responsible for negotiating terms with the
selling shareholders and receiving and paying out commissions.
21. Messier also sometimes personally solicited investors, in addition to
working with the hired solicitors.
22. Messier and Scoratow’s securities solicitation business generally
operated as follows:
a. A selling shareholder would obtain a large block of shares and
would seek to profit quickly by selling those shares into the market,

5

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
understanding 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).
b. The selling shareholder would thus enter into arrangements
with Scoratow and Messier (the terms of which were negotiated by
Scoratow) whereby the selling shareholder would hire Scoratow and Messier
to facilitate the sale of the selling shareholder’s shares.
c. Messier would then engage his network of call centers and
independent solicitors to begin a sales campaign of the identified microcap
stock.
d. Using purchased lead lists, Messier and the other solicitors
would 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.
g. Instead of contacting a market maker, the solicitor would pass
this information on to either Messier or the call-center operator, who would
contact the selling shareholder.
h. The selling shareholder would then check the 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.

6

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
i. Messier or the call-center operator would communicate that
price 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. Messier and the selling shareholder would determine 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
Scoratow a gross commission that was generally 40% of the invested funds.
m. Of this amount, Messier and Scoratow each retained 5% and
would pay the remaining 30% to the call-center operators and solicitors.
23. Messier and Scoratow’s operation solicited investors to purchase the
shares of at least seven microcap companies with the following ticker symbols:
CMRL/SBES, GMNI, GOHE, KPOC, MMEG, TPTW, and UATG.
24. Messier was involved in this securities solicitation business from at
least February 2014 until at least March 2018.
25. Between December 2014 and March 2018, Messier received at least
$730,592.00 in gross commissions.
26. Scoratow was engaged in this securities solicitation business from at
least July 2015 until at least September 2016, during which time he received at
least $1,301,699.00 in gross commissions and paid out approximately $998,473.90
in commissions to the solicitors working for him and Messier.

7

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
FIRST CLAIM FOR RELIEF
Violations of Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)]
(Against Messier)
27. The Commission re-alleges and incorporates by reference each and
every allegation in paragraphs 1–26, inclusive, as if they were fully set forth
herein.
28. By engaging in the conduct described above, Defendant Messier:
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.
29. By reason of the foregoing, Messier 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, via aiding and abetting, of Section 15(a)(1) of the Exchange Act
[15 U.S.C. § 78o(a)(1)]
(Against Defendant Scoratow)
30. The Commission re-alleges and incorporates by reference each and
every allegation in paragraphs 1–26, inclusive, as if they were fully set forth
herein.
31. By engaging in the conduct described above and as described in
paragraphs 27-29 above, Defendant Messier violated Section 15(a)(1) of the
Exchange Act.

8

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
32. Pursuant to Section 20(e) of the Exchange Act [15 U.S.C. § 78t(e)],
any person that knowingly or recklessly provides substantial assistance to another
person in violation of a provision of the Exchange Act, or of any rule or regulation
issued under the Exchange Act, shall be deemed to be in violation of such
provision to the same extent as the person to whom such assistance is provided.
33. By reason of the foregoing, Defendant Scoratow aided and abetting
Defendant Messier’s violations of Section 15(a)(1) of the Exchange Act and is
therefore liable for violations of Section 15(a)(1) of the Exchange Act to the same
extent as Defendant Messier is liable and, unless enjoined, will continue to violate
Section 15(a)(1) of the Exchange Act.
THIRD 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 each Defendant)
34. The Commission re-alleges and incorporates by reference each and
every allegation in paragraphs 1–26, inclusive, as if they were fully set forth
herein.
35. By engaging in the conduct described above, Defendants, directly or
indirectly, individually or in concert with others, 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
36. With respect to violations of Sections 17(a)(3) of the Securities Act,
each of the Defendants was at least negligent in their conduct.

9

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
37. With respect to violations of Section 17(a)(1) of the Securities Act,
each of the Defendants engaged in the above-referenced conduct knowingly or
with sever recklessness.
38. By reason of the foregoing, Defendants each 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)].
FOURTH 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 each Defendant)
39. The Commission re-alleges and incorporates by reference each and
every allegation in paragraphs 1–26, inclusive, as if they were fully set forth
herein.
40. By engaging in the conduct described above, Defendants, 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
operated as a fraud and deceit upon purchasers, prospective purchasers, and other
persons.
41. Defendants engaged in the above-referenced conduct knowingly or
with severe recklessness.
42. By reason of the foregoing, Defendants each 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)].

10

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
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 17(a) of the Securities Act
[15 U.S.C. § 77q(a)], Sections 10(b) and 15(a)(1) of the Exchange Act
[15 U.S.C. §§ 78j(b), 78o(a)(1)], and Exchange Act Rule 10b–5 [17 C.F.R. §
240.10b–5];
II.
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;
III.
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;
IV.
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 Section 20(d) of the Securities Act
[15 U.S.C. § 77t(d)];
                                                                 V.
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,

11

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
VI.
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/ David D. Whipple
David D. Whipple
Attorney for Plaintiff
Securities and Exchange Commission

1 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

DAVID D. WHIPPLE (Utah State Bar No. 17347) 
[email protected]  
AMY J. OLIVER (Utah State Bar No. 8785) 
[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 

UNITED STATES DISTRICT COURT 

FOR THE SOUTHERN DISTRICT OF CALIFORNIA 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

vs. 

SCOTT CHARLES MESSIER, an 
individual, and         
JAY ZOLA SCORATOW, an 
individual,  

Defendants. 

Case No.  

COMPLAINT 

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

as follows:  

SUMMARY OF THE ACTION 

1. Scott Charles Messier (“Messier”) and Jay Zola Scoratow

(“Scoratow”) (collectively, “Defendants”) participated in a securities solicitation 

scheme that involved soliciting investors to purchase the securities of numerous 

microcap companies whose shares traded on the over-the-counter market.  

'20CV0105 AGSBAS

Case 3:20-cv-00105-BAS-AGS   Document 1   Filed 01/15/20   PageID.1   Page 1 of 11



 

2 
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

2. Scoratow negotiated deals with the sellers of the microcap shares and 

Messier managed various solicitors and coordinated the trades between the sellers 

of the shares and investors to enable the sellers to offload their shares without 

significantly affecting the market for the thinly traded stock. 

3. While engaged in this conduct, Messier was neither registered with 

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

registered with the Commission.  

4. Defendants earned transaction-based compensation for their 

solicitation activities, which generally amounted to 5% of investment proceeds for 

each Defendant.  

5. By engaging in this conduct, as further described herein, Messier 

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)]. 

6. By engaging in this conduct, as further described herein, Scoratow 

aided and abetted Messier’s violations of Section 15(a)(1) of the Exchange Act [15 

U.S.C. § 78o(a)(1)]. 

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

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)]. 

JURISDICTION AND VENUE 

8. 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 

Case 3:20-cv-00105-BAS-AGS   Document 1   Filed 01/15/20   PageID.2   Page 2 of 11



 

3 
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

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

appropriate. 

9. 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)].  

10. 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. 

11. 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. 

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

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

more acts or transactions constituting the violations occurred in the Southern 

District of California. 

DEFENDANTS 

13. Scott Charles Messier, born in 1963, is last known to reside in San 

Marcos, California and managed a securities solicitation operation beginning in or 

around mid-2014.  

14. Jay Zola Scoratow, born 1956, is last known to reside in La Jolla, 

California and assisted Messier with his securities solicitation operation beginning 

in or around July 2015. 

FACTS 

15. While working as a solicitor in the securities solicitation business in 

2014, Messier became familiar with various call centers that were engaged in 

securities solicitations. 

Case 3:20-cv-00105-BAS-AGS   Document 1   Filed 01/15/20   PageID.3   Page 3 of 11



 

4 
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

16. During this timeframe, Messier also became aware of several 

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

large blocks of at least nominally unrestricted shares of microcap issuers that they 

hoped to sell into the market without significantly impacting the price for those 

shares.  

17. With his knowledge of the securities solicitation business and his 

business relationship with the selling shareholders, Messier began functioning as 

an intermediary, connecting the selling shareholders (or their agents) with 

securities-solicitation call centers or independent solicitors looking for securities to 

promote. 

18. At some point during the time that Messier was acting as an 

intermediary, he reconnected with an old acquaintance, Scoratow. 

19. Messier described to Scoratow the work he was doing in the securities 

solicitation business. Based on his knowledge of this type of work, Scoratow felt 

that Messier was being undercompensated and offered to partner with Messier and 

negotiate Messier’s future deals. 

20. Thus, beginning in or around July 2015, Messier and Scoratow began 

a partnership pursuant to which Messier was responsible for recruiting solicitors, 

working with the solicitors on the deals, and keeping track of the commissions 

earned and due, and Scoratow was responsible for negotiating terms with the 

selling shareholders and receiving and paying out commissions. 

21. Messier also sometimes personally solicited investors, in addition to 

working with the hired solicitors. 

22. Messier and Scoratow’s securities solicitation business generally 

operated as follows: 

a. A selling shareholder would obtain a large block of shares and 

would seek to profit quickly by selling those shares into the market, 

Case 3:20-cv-00105-BAS-AGS   Document 1   Filed 01/15/20   PageID.4   Page 4 of 11



 

5 
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

understanding 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). 

b. The selling shareholder would thus enter into arrangements 

with Scoratow and Messier (the terms of which were negotiated by 

Scoratow) whereby the selling shareholder would hire Scoratow and Messier 

to facilitate the sale of the selling shareholder’s shares. 

c. Messier would then engage his network of call centers and 

independent solicitors to begin a sales campaign of the identified microcap 

stock. 

d. Using purchased lead lists, Messier and the other solicitors 

would 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. 

g. Instead of contacting a market maker, the solicitor would pass 

this information on to either Messier or the call-center operator, who would 

contact the selling shareholder. 

h. The selling shareholder would then check the 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. 

Case 3:20-cv-00105-BAS-AGS   Document 1   Filed 01/15/20   PageID.5   Page 5 of 11



 

6 
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

i. Messier or the call-center operator would communicate that 

price 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. Messier and the selling shareholder would determine 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 

Scoratow a gross commission that was generally 40% of the invested funds. 

m. Of this amount, Messier and Scoratow each retained 5% and 

would pay the remaining 30% to the call-center operators and solicitors. 

23. Messier and Scoratow’s operation solicited investors to purchase the 

shares of at least seven microcap companies with the following ticker symbols: 

CMRL/SBES, GMNI, GOHE, KPOC, MMEG, TPTW, and UATG. 

24. Messier was involved in this securities solicitation business from at 

least February 2014 until at least March 2018. 

25. Between December 2014 and March 2018, Messier received at least 

$730,592.00 in gross commissions. 

26. Scoratow was engaged in this securities solicitation business from at 

least July 2015 until at least September 2016, during which time he received at 

least $1,301,699.00 in gross commissions and paid out approximately $998,473.90 

in commissions to the solicitors working for him and Messier.  

Case 3:20-cv-00105-BAS-AGS   Document 1   Filed 01/15/20   PageID.6   Page 6 of 11



 

7 
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

FIRST CLAIM FOR RELIEF 

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

(Against Messier) 

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

every allegation in paragraphs 1–26, inclusive, as if they were fully set forth 

herein.  

28. By engaging in the conduct described above, Defendant Messier: 

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. 

29. By reason of the foregoing, Messier 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, via aiding and abetting, of Section 15(a)(1) of the Exchange Act 

[15 U.S.C. § 78o(a)(1)] 

(Against Defendant Scoratow) 

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

every allegation in paragraphs 1–26, inclusive, as if they were fully set forth 

herein.  

31. By engaging in the conduct described above and as described in 

paragraphs 27-29 above, Defendant Messier violated Section 15(a)(1) of the 

Exchange Act.  

Case 3:20-cv-00105-BAS-AGS   Document 1   Filed 01/15/20   PageID.7   Page 7 of 11



 

8 
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

32. Pursuant to Section 20(e) of the Exchange Act [15 U.S.C. § 78t(e)], 

any person that knowingly or recklessly provides substantial assistance to another 

person in violation of a provision of the Exchange Act, or of any rule or regulation 

issued under the Exchange Act, shall be deemed to be in violation of such 

provision to the same extent as the person to whom such assistance is provided. 

33. By reason of the foregoing, Defendant Scoratow aided and abetting 

Defendant Messier’s violations of Section 15(a)(1) of the Exchange Act and is 

therefore liable for violations of Section 15(a)(1) of the Exchange Act to the same 

extent as Defendant Messier is liable and, unless enjoined, will continue to violate 

Section 15(a)(1) of the Exchange Act. 

THIRD 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 each Defendant) 

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

every allegation in paragraphs 1–26, inclusive, as if they were fully set forth 

herein.  

35. By engaging in the conduct described above, Defendants, directly or 

indirectly, individually or in concert with others, 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 

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

each of the Defendants was at least negligent in their conduct. 

Case 3:20-cv-00105-BAS-AGS   Document 1   Filed 01/15/20   PageID.8   Page 8 of 11



 

9 
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

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

each of the Defendants engaged in the above-referenced conduct knowingly or 

with sever recklessness. 

38. By reason of the foregoing, Defendants each 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)]. 

FOURTH 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 each Defendant) 

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

every allegation in paragraphs 1–26, inclusive, as if they were fully set forth 

herein. 

40. By engaging in the conduct described above, Defendants, 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 

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

persons. 

41. Defendants engaged in the above-referenced conduct knowingly or 

with severe recklessness. 

42. By reason of the foregoing, Defendants each 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)]. 

Case 3:20-cv-00105-BAS-AGS   Document 1   Filed 01/15/20   PageID.9   Page 9 of 11



 

10 
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

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 17(a) of the Securities Act 

[15 U.S.C. § 77q(a)], Sections 10(b) and 15(a)(1) of the Exchange Act 

[15 U.S.C. §§ 78j(b), 78o(a)(1)], and Exchange Act Rule 10b–5 [17 C.F.R. § 

240.10b–5]; 

II. 

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; 

III. 

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; 

IV. 

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 Section 20(d) of the Securities Act 

[15 U.S.C. § 77t(d)]; 

 V.  

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, 

Case 3:20-cv-00105-BAS-AGS   Document 1   Filed 01/15/20   PageID.10   Page 10 of 11



 

11 
 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

VI. 

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/ David D. Whipple 

David D. Whipple 
Attorney for Plaintiff 
Securities and Exchange Commission 

 

Case 3:20-cv-00105-BAS-AGS   Document 1   Filed 01/15/20   PageID.11   Page 11 of 11