SEC v. NICHOLAS A. PALAZZO; 4TA SPORTS, INC.; NP VENTURES HOLDINGS, LLC; and PLAY CALLER SPORTS GAMING LLC, No. 5:24-cv-6602, Northern District of California (July 9, 2025) — Complaint

COMPLAINT

Case No. 5:24-cv-6602

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Carina A. Cuellar (Cal. Bar No. 244578)
  [email protected]
Lauren B. Poper (N.Y. Bar No. 2796704)
  [email protected]
Brittany K. Frassetto (N.Y. Bar No. 5119227)
  [email protected]
100 F Street, NE
Washington, DC 20549
Telephone:  (202) 551-6414
Facsimile:   (202) 772-9292

Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION

SECURITIES AND EXCHANGE COMMISSION,

                        Plaintiff,
v.

NICHOLAS A. PALAZZO, 4TA SPORTS, INC.,
NP VENTURES HOLDINGS, LLC, and
PLAY CALLER SPORTS GAMING LLC,

  Defendants.

Case No. 5:24-cv-6602

COMPLAINT

DEMAND FOR JURY
TRIAL

Plaintiff Securities and Exchange Commission (“SEC”), for its Complaint against
Defendants Nicholas A. Palazzo (“Palazzo”), 4TA Sports, Inc. (“4TA Sports”), NP Ventures
Holdings, LLC (“NP Ventures”), and Play Caller Sports Gaming LLC (“Play Caller”), collectively
“Defendants,” alleges as follows:
SUMMARY
1. Nicholas Palazzo defrauded more than two dozen investors and stole their money
through two investment schemes.  A former Harvard football player, Palazzo often targeted former
teammates as his victims.  But he also misappropriated investments from others, including a Navy
veteran and a senior care coordinator.  Palazzo promised his victims that their investments would be
used to fund his sports-related businesses.  Instead, he spent the overwhelming majority of

COMPLAINT

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investors’ money on personal expenses such as rent for a multi-million-dollar home, private school
tuition, jewelry, and a Disney vacation as well as on undisclosed debts, litigation fees, and other
expenses unrelated to the business ventures for which he had solicited the investments.  In total, of
the roughly $3.1 million Palazzo raised for two different purported business ventures, he spent
approximately $2.6 million on himself and unrelated expenses.
2. Palazzo is a 2003 graduate of Harvard University and a former football player.  To
perpetrate his schemes, Palazzo used his collegiate relationships and sports connections to build
trust while at the same time making materially false and misleading statements to investors about
the businesses, including concerning third-party financing, the use of investor funds, and his
compensation.  After obtaining money based on these false promises, Palazzo then spent nearly all
of it on himself and unrelated expenses.
3. From at least October 2019 to December 2023 (the “Relevant Period”), Palazzo and
the sports-related corporate entities that he created and led—4TA Sports, Play Caller, and NP
Ventures (together, the “Corporate Defendants”)—fraudulently raised money from investors
through securities offerings in which the investors received various forms of notes and warrants.
4. During the Relevant Period, Palazzo raised investor funds in two separate schemes:
the STACK Scheme; and the Play Caller Scheme.  In both schemes, Palazzo targeted specific
individuals, convinced these individuals to invest through materially misleading statements,
misappropriated their funds, and then subsequently approached new investors because he needed
more investor money to continue to fund his lavish lifestyle and pay his debts.
5. First, in the STACK Scheme, between at least October 2019 and March 2020,
Palazzo raised $900,000 from three investors by offering and selling secured promissory notes and
warrants through 4TA Sports.  During this offering, he represented to all three investors that their
investments would be used to repurchase the assets of STACK Media, Inc. (“STACK”).  STACK is
a sports media company that Palazzo founded in 2005, largely sold in 2017, and was trying to then
repurchase.  He further represented to all three investors that he either had or would shortly secure
$5 million in third-party funding.  None of this was true.  Instead, shortly after receiving investor
funds, he immediately spent the money to pay undisclosed debts, litigation fees, and personal

COMPLAINT

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expenses, including his children’s private school tuition and personal rent.  Also, Palazzo knew, or
was reckless or negligent in not knowing, that he had not secured or would not shortly secure $5
million in third-party funding.
6. Second, in the Play Caller Scheme, between at least September 2020 and December
2023, Palazzo raised approximately $2.1 million from at least 22 investors by offering and selling
convertible promissory notes through Play Caller and its majority owner, NP Ventures.  Palazzo
represented that investor funds would be used to develop and imminently launch the Play Caller
sports-betting application.  Once again, this was not true.  Instead, Palazzo misappropriated more
than 75 percent of investor funds to (a) pay personal expenses, including vacations to Disneyland
and Hilton Head Island, South Carolina, (b) settle an unrelated lawsuit, and (c) pay himself
exorbitant consulting fees.
7. As a result of the alleged conduct, the Defendants violated the antifraud provisions
of Section 17(a) of the Securities Act, 15 U.S.C. §77q(a), and 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.  Palazzo is also liable as a
control person for the Corporate Defendants’ violations of Section 10(b) of the Exchange Act and
Rule 10b-5 thereunder pursuant to Section 20(a) of the Exchange Act.
8. The SEC seeks a judgment from the Court, as set forth in more precise detail in the
Prayer for Relief: (i) permanently enjoining the Defendants from violating Securities Act Section
17(a) [15 U.S.C. §77q(a)], and Exchange Act Section 10(b) [15 U.S.C. §78j(b)], and Rule 10b-5
thereunder [17 C.F.R. § 240.10b-5]; (ii) permanently enjoining Palazzo, including through any
entity owned or controlled by Palazzo, from participating in the issuance, purchase, offer, or sale of
any security (other than securities for his own personal account); (iii) directing the Defendants to
disgorge all ill-gotten gains they received as a result of the acts and/or courses of conduct
complained of, plus prejudgment interest thereon; (iv) directing the Defendants to pay civil money
penalties; (v) barring Palazzo from serving as an officer or director of a public company; and (vi)
granting such other relief as this Court may determine to be just, equitable, and necessary.

COMPLAINT

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JURISDICTION AND VENUE
9. The Court has jurisdiction over this action under Sections 20(b), 20(d)(1), and 22(a)
of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a)], and Sections 21(d), 21(e), and
27(a) of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa(a)].
10. Defendants, directly or indirectly, used the means or instrumentalities of interstate
commerce, or of the mails, in connection with the violations alleged in this Complaint.
11. Venue is proper in this judicial district 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] because certain of the
Defendants’ acts constituting the violations alleged herein, including making misrepresentations to
investors and misappropriating their funds, occurred in this district.  Additionally, Defendant
Palazzo resides in Santa Clara County, within this district, and each of the Corporate Defendants
have their principal place of business in this district.
INTRADISTRICT ASSIGNMENT
12. Under Civil Local Rule 3-2(c) and (e), this civil action should be assigned to the San
Jose Division because a substantial part of the events or omissions giving rise to the SEC’s claims
occurred in Santa Clara County and Defendant Palazzo resides within Santa Clara County.
DEFENDANTS
13. Nicholas A. Palazzo, age 43, is a resident of Los Altos, California.  At all relevant
times, Palazzo was the sole director and officer of 4TA Sports, Play Caller, and NP Ventures.  After
graduating from Harvard, Palazzo remained in touch with some of his former Harvard football
teammates and other former Harvard football players.  Palazzo generally presented himself as
someone who worked in sports-oriented businesses, such as sports media companies.  During the
fraud, as detailed below, Palazzo used approximately $2.6 million in investor funds for his personal
expenses and other non-business expenses.
14. 4TA Sports, Inc. is a Delaware corporation formed on July 31, 2019.  4TA Sports’
principal place of business is 228 Hamilton Ave., Floor 3, Palo Alto, California.  At all relevant
times, Palazzo was the CEO and sole shareholder of 4TA Sports.  4TA Sports purported to be the
entity through which Palazzo intended to repurchase STACK’s assets from their new owner, SPay,

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Inc. (“SPay”).  From July 31, 2019 to the present, 4TA Sports has had no discernable source of
income or revenue—virtually all of its funds appear to be investor funds.
15. NP Ventures Holdings, LLC is a Delaware limited liability company formed on
April 27, 2020.  NP Ventures’ principal place of business is 228 Hamilton Ave., 3rd Floor, Palo
Alto, California.  At all relevant times, Palazzo was the majority shareholder of NP Ventures and
served as President, Chief Executive Officer, Secretary, and Treasurer.  NP Ventures was, in turn, at
all relevant times the majority shareholder of Play Caller and other Palazzo-controlled sports
ventures.  From April 27, 2020 to December 31, 2023, NP Ventures received approximately
$150,000 in consulting income.  During that time, NP Ventures received more than $1 million in
investor funds.
16. Play Caller Sports Gaming, LLC is a Nevada limited liability company formed on
May 22, 2020.  Play Caller’s principal place of business is 228 Hamilton Ave., 3rd Floor, Palo Alto,
California.  At all relevant times, Palazzo was the President, Chief Executive Officer, Secretary, and
Treasurer of Play Caller, and through NP Ventures was also its controlling shareholder.  Play Caller
purports to be in the business of micro-fantasy sports through a sports technology platform.  From
May 22, 2020 to December 31, 2023, Play Caller had no significant source of income or revenue—
virtually all of its funds appeared to be investor funds or funds from Palazzo or Palazzo-affiliated
entities.
RELEVANT PERSONS AND ENTITIES
17. STACK Media, Inc., incorporated in Delaware, was formed by Palazzo in 2005 to
produce media and content for young athletes.  STACK’s principal place of business was in
California at the time Palazzo sold substantially all of STACK’s assets to SPay in 2017.  Prior to the
sale, Palazzo was the CEO and controlling shareholder of STACK.
18. SPay, Inc. d/b/a Stack Sports is a Delaware corporation with a principal place of
business in Plano, Texas.  SPay provides software and services for national governing bodies, youth
sports leagues, clubs and associations, parents, coaches, and athletes.  SPay acquired substantially
all of STACK’s assets in 2017.

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19. NP Vent LLC is a California limited liability company formed on April 6, 2011.
NP Vent’s principal place of business is 228 Hamilton Ave., 3rd Floor, Palo Alto, California.  At all
relevant times, Palazzo was the sole shareholder of NP Vent, which was his consulting company.
NP Vent is a different entity than NP Ventures.  Palazzo primarily used NP Vent’s bank account to
pay personal expenses.
20. Entity A is a private digital marketing company based in Toronto, Ontario, Canada.
Entity A ceased operations in April 2019 and went into receivership by order of the Ontario
Superior Court of Justice.  Entity A was STACK’s largest customer.
21. Marketing Firm B is incorporated in Texas, with a principal place of business in
Dallas, Texas.  Individual E co-founded Marketing Firm B in 2015 to provide sports marketing and
management services.
22. Consulting Company C is incorporated in Texas, with a principal place of business
in Gilmer, Texas.  Individual E founded Consulting Company C in 2014 to raise money for a
charitable program associated with high school football players.  Individual E currently uses
Consulting Company C to hold his consulting business.
23. Media Company D is incorporated in New York, with a principal place of business
in Smithtown, New York.  Media Company D purports to be engaged in international feature film
development, production, and the use of media rights.
24. Individual E is a resident of Gilmer, Texas.  Individual E is the founder and owner
of Consulting Company C, his consulting business, and a founder and 50% owner of Marketing
Firm B, a sports marketing and management business.  Individual E and Palazzo are longtime
friends and business associates.
FACTUAL ALLEGATIONS
A. Palazzo’s Past Lawsuits and Business Problems Motivated His Fraud.
25. One of Palazzo’s key motivations for perpetrating two fraudulent schemes and
misappropriating millions of dollars in investor funds were the lawsuits against him and associated
legal and settlement expenses that he incurred.  As outlined below, these difficulties are relevant
because they demonstrate Palazzo’s motive and scienter in connection with the fraudulent schemes.

COMPLAINT

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Indeed, from 2015 through 2020, Palazzo accumulated a significant amount of debt related to
several businesses, was involved in several lawsuits, and was terminated from his job.  Palazzo
raised funds from investors by telling them it was for business purposes; however, he used a
significant amount of the investor funds to pay the debts and expenses described below.
26. In 2005, Palazzo founded STACK, a youth sports media company.  Over time,
STACK had a number of investors and creditors that it owed money to.  By May 2017, STACK had
more than $18.6 million in outstanding liabilities.
27. In mid-2017, Palazzo sold substantially all of STACK’s assets to SPay for $9.5
million.  After selling STACK, Palazzo joined SPay as its Chief Digital Officer.  During this time,
Palazzo faced mounting difficulties because he failed to fully repay some of STACK’s investors
and creditors and also concealed from SPay some of STACK’s liabilities, as set forth below:
a. Between 2017 and 2019, and while he was still employed as SPay’s Chief Digital
Officer, Palazzo failed to fully repay all of STACK’s investors and creditors after the
SPay sale, resulting in at least two lawsuits by STACK investors against Palazzo and
his companies for fraud and breach of contract.
b. Palazzo also concealed from SPay the extent of STACK’s debts to Entity A.  Entity
A was STACK’s largest customer and their substantial monetary relationship
required both STACK and Entity A to make payments to and receive payments from
each other.  Subsequently, Entity A went into receivership in April 2019.  Then,
from approximately June 2019 to early November 2019, Palazzo concealed from
SPay the fact that Entity A’s receiver was demanding money from SPay.  Indeed,
until early November 2019, SPay’s understanding was that Entity A owed STACK
millions of dollars.  Palazzo admitted in testimony during the SEC’s investigation of
these events that he attempted to resolve these demands by wiring $250,000 to Entity
A’s receiver in October 2019 without SPay’s knowledge.  Then, in November 2019,
Entity A’s receiver contacted SPay directly, claiming that SPay owed Entity A more
than $4 million.  SPay terminated Palazzo’s employment in April 2020.  And in July

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2020, SPay subsequently sued Palazzo and other STACK executives for concealing
the nature of Entity A’s relationship and misappropriating SPay’s funds.
c. Additionally, in 2015, Palazzo, on behalf of STACK, entered into an agreement with
Marketing Firm B, a sports management company, whereby STACK would solicit
sponsorships and advertising for Marketing Firm B.  Under the agreement, STACK
received a $300,000 advance and was required to generate a minimum of $600,000
in revenue.  According to Individual E, one of Marketing Firm B’s owners, STACK
did not generate the required revenue and was required to repay the advance, plus the
revenue shortfall.  Palazzo testified that he made repayments to Marketing Firm B at
least through 2019 and 2020.  SPay was not aware of this agreement or debt.
28. Separately, by on or around October 4, 2019, Palazzo and a Palazzo-controlled entity
were sued for fraud, breach of contract, and other legal violations related to a $1 million transaction
that occurred in July 2019.  This lawsuit (the “2019 Civil Lawsuit”) was unrelated to SPay or the
Corporate Defendants.
B. Palazzo and 4TA Sports Fraudulently Raised at Least $900,000 from Investors
by Misrepresenting that the Funds Would be Used to Repurchase STACK.
1. Overview of the STACK Scheme.
29. By 2019, Palazzo became unhappy with his 2017 sale of STACK and began
negotiating with SPay to repurchase some of STACK’s assets.  (Palazzo often referred to
repurchasing STACK’s assets as simply repurchasing STACK, and for simplicity this Complaint
refers to it the same way.)  Palazzo formed 4TA Sports to serve as the company that would
repurchase STACK and is the sole shareholder of 4TA Sports.
30. Between October 2019 and March 2020, Palazzo and 4TA Sports raised at least
$900,000 from three investors for the STACK repurchase.  Palazzo first approached two former
Harvard football teammates (“Investor 1” and “Investor 2”) in October 2019.  He explained to each
of them that he would use their investment to repurchase STACK.  He convinced both to invest
after representing that he had already secured a $5 million funding commitment and presenting a
purported funding agreement signed by Individual E on behalf of Consulting Company C.  The

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funding agreement purported that 4TA Sports promised to pay Consulting Company C $5 million
with interest “for value received.”  Palazzo further represented that Consulting Company C was a
“family office,” a term used to refer to a private wealth management office established by an ultra-
high-net worth family, which lent an air of credibility, sophistication, and security to the
investment.  Palazzo’s statements to Investors 1 and 2 were false.  Not only had Palazzo not secured
$5 million in funding, but also, shortly after receiving $250,000 from each investor, Palazzo began
using the money on debts and legal and personal expenses unrelated to the repurchase of STACK.
31. After Palazzo had misappropriated almost all the $500,000 from Investors 1 and 2,
he sought out a new victim.  In and around March 2020, he spoke with his next victim (“Investor
3”), who owned a youth sports training center.  He convinced Investor 3 to invest $400,000, again
claiming he had secured a $5 million funding commitment and presenting a different purported $5
million funding agreement between 4TA Sports and Media Company D.  The funding agreement
purported that 4TA Sports would receive $5 million in funding in March 2020.  Palazzo also
assured Investor 3 that her funds would be used to repurchase STACK.  None of this was true.
Indeed, shortly after receiving Investor 3’s funds, Palazzo used the funds for personal expenses and
for legal debts and fees unrelated to repurchasing STACK.
32. Palazzo never used investor funds for expenses associated with an attempt to
repurchase STACK.  To the contrary, Palazzo used at least 90% of the funds on unrelated debts and
litigation expenses, as well as personal expenses such as private school tuition and vacations.
Ultimately, Palazzo never repurchased STACK.  The specific details of Palazzo’s STACK Scheme
are described below.
2. Palazzo and 4TA Sports Defrauded Two Former Harvard Football
Players Through a Securities Offering.
33. In October 2019, Palazzo reached out to Investors 1 and 2 seeking $250,000 from
each of them.  He explained to both investors that he intended to use their funds for the repurchase
of STACK.

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a. Investor 1
34. During the investment process, Palazzo both spoke with his friend and former
teammate Investor 1 and sent him emails.  Palazzo, as 4TA Sports’ sole officer, proposed an
investment opportunity to his friend.  In return for Investor 1 committing $250,000, 4TA Sports and
Palazzo offered to provide Investor 1 with the following: (1) a $250,000 secured promissory note
with a maturity date just two weeks after the deal (October 31, 2019) with a 6% interest rate and a
preferred return of 10% ($25k), (2) a warrant to purchase to 62,500 shares in 4TA Sports at $.01,
(3) a security agreement granting Investor 1 a security interest in and lien on 4TA Sports’ assets,
and (4) a pledge agreement granting Investor 1 a first priority security interest in all of Palazzo’s
4TA Sports stock.
35. In an October 10, 2019 email to Investor 1, Palazzo explained that he was at the
“finish line” in his repurchase of STACK.  He further explained that he was “about $250k short in
the interim for these working capital true-ups, which I hadn’t planned to address until post-closing
as is the traditional treatment.”  In this same email, Palazzo claimed that “I have the full financing
committed ($5m) by a family office in Texas who is also an investor in [Redacted], which is one of
the top trainers in the nation and an original advisory board member of Stack.”  In response to this
email, Investor 1 expressed that he would like to help, but that he wanted to speak, in part, to
understand the risk associated with the investment.  In a follow-up email, Palazzo then provided
Investor 1 a copy of a convertible promissory note between 4TA Sports and Consulting Company C
(the purported family office), dated September 23, 2019, which supposedly documented Consulting
Company C’s agreement to provide $5 million to 4TA Sports.
36. After speaking with Palazzo and accepting his representations, Investor 1 signed the
warrant agreement and security agreement.  Palazzo executed these same documents, as well as the
promissory note and pledge agreement, as the Chairman of 4TA Sports.  After receiving
instructions from Palazzo, Investor 1 then wired $250,000 on October 15, 2019, to a bank account
associated with one of Palazzo’s other entities.

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b. Investor 2
37. During this same period, Palazzo also reached out to Investor 2 to secure $250,000 in
funds, again offering a promissory note, 4TA Sports warrants, a security agreement, and a pledge
agreement in return.  In emails dated between October 10 and 11, 2019, Palazzo presented Investor
2 with the same deal terms proposed to Investor 1.  Palazzo represented that the funds would be
used to “clean up some of the working capital from the acquisition from 2017 to now and for me to
repay approximately $250k of capital that they funded into Stack before the deal closes.”  Palazzo
further represented that: “I have the financing and deal documentation completed to close on the
acquisition of the Stack assets as soon as the family office can fund, which is expected to be next
week, but could possibly slip into the following week.”  In response to questions from Investor 2,
Palazzo doubled down and stated the “family office is fully committed” and “they have committed
to fund me with the $5m regardless as to if I buy the Stack assets back.”  Palazzo also provided a
copy of a convertible promissory note between 4TA Sports and Consulting Company C, dated
September 23, 2019, which supposedly documented Consulting Company C’s agreement to provide
$5 million to 4TA Sports.
38. After Palazzo’s representations to Investor 2, Investor 2 signed the security
agreement and warrant agreement on October 11, 2019.  Palazzo executed these same documents,
as well as the promissory note and pledge agreement, as the Chairman of 4TA Sports.  Investor 2
then wired $250,000 on October 15, 2019 to a 4TA Sports bank account.
39. Palazzo’s transactions with Investors 1 and 2 constituted an offer and sale of
securities.  Indeed, the warrants on their face warn the holder, in part, that they are securities subject
to certain transfer restrictions under the federal securities laws.  Additionally, the secured
promissory notes were interest-bearing notes that are defined as securities under the federal
securities laws, and further operate as securities because (1) 4TA Sports and Palazzo were
motivated to use the funds to finance a substantial investment, (2) a reasonable investor would have
been motived by the profit generated, including the 6% return, (3) a reasonable member of the
investing public would have considered the secured promissory notes securities, and (4) no risk-
reducing factor, such as an alternative regulatory regime, would make application of the securities

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laws unnecessary.  Alternatively, the warrants and notes constitute an investment contract in which
Investors 1 and 2 invested money and expected to receive profits from Palazzo’s efforts in
connection with 4TA Sports and STACK.
c. Palazzo’s Statements to Investors 1 and 2 Were False.
40. Palazzo and 4TA Sports’ statements to Investors 1 and 2 concerning the use of
investor funds and the $5 million in secured funding were materially false and misleading.  Palazzo
had no intention of using the funds to “clean up” working capital or otherwise fund the STACK
acquisition.  Palazzo also knew, or was reckless or negligent in not knowing, that he (1) had not
secured $5 million in funds for the STACK repurchase and (2) as presented, the $5 million
promissory note was misleading.
41. First, as stated above, both investors wired $250,000 to Palazzo-controlled bank
accounts on October 15, 2019, after Palazzo represented that the funds would be used for “working
capital” issues related to the STACK repurchase.  However, that very same day, Palazzo wired the
$250,000 he received from Investor 1 to try to resolve the demand from Entity A’s receiver.  This
payment had nothing to do with “working capital true-ups” or repurchasing STACK.  To the
contrary, at that time SPay had no knowledge of any possible debt owed by STACK to Entity A,
nor had Palazzo informed SPay of any negotiations with or payments made to Entity A’s receiver.
Thus, Palazzo did not use Investor 1’s funds to secure the STACK repurchase.
42. Then, between October 18, 2019 and February 27, 2020, Palazzo used approximately
$95,000 from Investor 2 to repay debts owed to Marketing Firm B, which are expenses that predate
SPay’s acquisition of STACK, and were unknown to SPay.  Thus, there is no legitimate reason why
Palazzo needed to make this payment prior to closing on the STACK repurchase.  Palazzo then
spent another approximately $25,000 from Investor 2 to pay his lawyers in the 2019 Civil Lawsuit.
Palazzo then transferred approximately $130,000 of Investor 2’s funds to a Palazzo-controlled bank
account held in the name of NP Vent LLC (“NP Vent”), an account he primarily uses for personal
expenses.  For example, Palazzo transferred $9,000 of Investor 2’s funds to NP Vent on or around
November 5, 2019, and then immediately used these funds to pay his personal rent.

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43. Palazzo’s immediate misappropriation of investor funds demonstrates that he had no
intention of using the investments to pursue the STACK repurchase.  Further, Palazzo’s statements
that he would use the funds to repurchase STACK were materially misleading because a reasonable
investor would have wanted to know that Palazzo intended to use investor funds for debts,
litigation, and personal expenses, rather than the stated business purpose.  Indeed, Investor 1 has
stated that his funds being used to stave off litigation would have been important information for
him to know when deciding to invest because he would have considered the investment riskier.  He
further stated that he would have been unlikely to invest had he known that his funds would be used
for this purpose.
44. Second, Palazzo knew, or was reckless or negligent in not knowing, that he and 4TA
Sports had not secured $5 million in financing for the STACK repurchase.  Palazzo represented to
Investors 1 and 2 that the $5 million was “committed” by a “family office,” which Investor 1
understood to mean a privately held wealth management firm of a high-net-worth family or group
of individuals.  Palazzo then sent each investor a copy of a $5 million promissory note between
4TA Sports and Consulting Company C.  Taken together, Palazzo’s representations about the $5
million funding commitment from Consulting Company C portrayed the investment to Investor 1 as
something that was sophisticated, had attracted interest from high-net-worth individuals, and was
secured by funds from those high-net-worth individuals.  In truth it was anything but.
45. For example, Palazzo knew that Consulting Company C was not a family office but
rather a consulting business run by Individual E, and Palazzo also knew or was reckless or negligent
in not knowing that Consulting Company C lacked any realistic ability to provide $5 million in
funding.  For example, Palazzo knew that Consulting Company C was not even providing this
funding; at best the funding (if it ever came at all) would come from another source or sources
(potentially Media Company D) and would be routed through Consulting Company C.  Palazzo also
knew that those other sources had not yet provided any of those funds to Consulting Company C.
And Palazzo also knew that one of those potential funding sources, Media Company D, was the
same source Palazzo had been trying (and failing) to get funding from for about a month.  Palazzo
also knew that Individual E, the signatory on the $5 million promissory note, had separately been

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trying (and failing) for several months to help Palazzo raise $1 million to help resolve the claims
that resulted in the 2019 Civil Lawsuit, in which both he and Individual E were defendants.  Taken
together, Palazzo knew, or was reckless or negligent in not knowing, that his written and oral
representations to Investors 1 and 2 that he had the $5 million in financing and that it was fully
committed, as represented by the $5 million promissory note, were misleading.  Further, these
statements were materially misleading because a reasonable investor would have wanted to know
that guaranteed funding had not been secured because it rendered their investment riskier.  Indeed,
Investor 1 indicated that the existence of $5 million in committed financing was important to his
assessment of the riskiness of the investment.
46. At a minimum, Palazzo misled Investors 1 and 2 by representing that he had $5
million in funding while omitting information necessary to make that statement not misleading,
including that the funders of Consulting Company C had not yet provided the funds.
d. Palazzo’s Deceptive “Lulling” Statements to Investor 1.
47. Both Investors 1 and 2 were to be repaid with interest on October 31, 2019, a mere
two weeks after providing the funds.  Knowing he would not repay the investors on time (because
he had already stolen most of the investors’ money), Palazzo began engaging in “lulling” statements
to Investor 1 a day before repayment was due, when he assured Investor 1 that he was “definitely
closing everything this week.”  Then, on or around November 11, 2019, Palazzo told Investor 1:
“All signs point to this week getting the funds back to you.”  On or around December 24, 2019,
Palazzo told Investor 1: “Expecting to close on or before 12/31.”  On or around February 12, 2020,
Palazzo told Investor 1: “I expect that we’ll close things out by the end of the month and be able to
do the payback soon after.”  Approximately three months later, on or around May 29, 2020, Palazzo
told Investor 1: “Funds are supposed to be here on Monday and then closing.”  Then, on or around
June 16, 2020, Palazzo told Investor 1: “No funds yet but they are promising by end of this week.”
Finally, approximately 10 months after Investor 1’s $250,000 wire, on or around August 28, 2020,
Palazzo told Investor 1: “I expect some real movement/negotiation on the deal to happen in the next
week or so.”

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48. Investor 1, who was concerned, also asked Palazzo for updates on several occasions.
On or around November 15, 2019, Investor 1 asked Palazzo if there was “any risk of running out of
$$ while you are working to close.”  Palazzo responded: “Hey, no risk there, all good on the cash
flow at the moment.”  Then, on or around January 13, 2020, Investor 1 asked Palazzo: “Is cash flow
okay in the meantime?”  Palazzo responded: “Cash flow is good right now so no worries there.”
49. Palazzo knew all of these lulling statements were false because he had already sent
Investor 1’s funds to Entity A’s receiver.  He therefore knew that he had no intention of using the
money to close the deal with STACK.
50. These lulling statements were designed to prevent Investor 1 from taking any action
to report Palazzo’s conduct, which enabled Palazzo to continue defrauding other investors in both
the STACK and Play Caller Schemes.
51. To this date, Palazzo has not repurchased STACK.  Palazzo has also not repaid
Investors 1 and 2 any of the principal or interest due on their promissory notes.
3. Palazzo Defrauded the Owner of a Youth Sports Training Center.
52. After misappropriating almost all of Investor 1 and 2’s funds, Palazzo pitched the
STACK investment to his next victim (“Investor 3”) via telephone in and around March 2020.
Palazzo was introduced to Investor 3 through Individual E, who had a mutual connection in the
sports industry.  During this period, Investor 3 and her family were in the process of building a
youth sports training center.
53. After being introduced, Palazzo made materially misleading statements to Investor 3
like those made to Investors 1 and 2 to secure an investment.  During these discussions, Individual
E both arranged and was present for phone calls between Investor 3 and Palazzo and forwarded
emails from Palazzo to Investor 3.  In these discussions, Palazzo explained to Investor 3 that he was
attempting to repurchase STACK and that he needed to come up with a down payment and the
remaining funds to finalize the repurchase.  He also explained that Investor 3’s $400,000 investment
would act as a “bridge loan” until he shortly received the $5 million in funding that Media
Company D had already committed to provide.  Palazzo assured Investor 3 that her investment
would be secured by a $5 million credit placement agreement that 4TA Sports had with Media

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Company D.  During these same discussions, Palazzo also pitched that STACK would use and
promote her training center with professional athletes.
54. According to Investor 3, she came away from her discussions with Palazzo
understanding that her money would be used to repurchase STACK, her investment would be
secured by the credit placement agreement, and STACK would promote her training center.  Based
on this understanding, Investor 3 agreed to make the investment.  Palazzo subsequently signed a
promissory note memorializing the investment, which he asked Individual E to send to Investor 3.
55. Investor 3’s understanding is confirmed by the deal documentation, which Palazzo
signed as 4TA Sports’ Chairman and CEO.  The investment package provided to Investor 3
included a promissory note and a $5 million credit placement agreement from Media Company D,
which purported to secure the investment.  Under the terms of the promissory note, Investor 3 was
entitled to 5% interest on her investment.  The principal and interest on the note were to be paid
approximately one month later on April 3, 2020.  The credit placement agreement was between
Media Company D and 4TA Sports, signed by Palazzo as the Chairman and CEO and dated January
6, 2020.  The version of the agreement sent to Investor 3 stated that Media Company D’s funds
would be delivered in March 2020.
56. After accepting Palazzo’s representations, Investor 3 ultimately wired $400,000 to a
4TA Sports bank account on and around March 6, 2020.
57. Like the promissory notes and Warrant Agreements 4TA Sports entered into with
Investors 1 and 2, this promissory note is a security, either in the form of a note or an investment
contract.
a. Palazzo Intentionally Deceived Investor 3.
58. Palazzo and 4TA Sports’ statements to Investor 3 concerning the use of her funds
and the $5 million in secured funding were materially false and misleading.  Palazzo had no
intention of using the funds to repurchase STACK.  Further, Palazzo knew, or was reckless or
negligent in not knowing, that (1) he had not secured $5 million in funds for the STACK repurchase
and (2) as presented, the $5 million credit placement agreement was misleading.

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59. Palazzo never intended to use Investor 3’s funds to repurchase STACK.  As stated
above, Investor 3 wired the $400,000 on March 6, 2020, believing the funds would be used for the
STACK repurchase.  However, that very same day, Palazzo began a series of transfers that
eventually totaled $68,000 to the NP Vent Account, which he primarily used for personal expenses.
Moreover, beginning that very same day and continuing into later that month, Palazzo wired a total
of $75,000 he received from Investor 3 to repay his debt to Marketing Firm B.  Palazzo also wired
$15,000 to pay his lawyers in the 2019 Civil Lawsuit.  Palazzo’s use of Investor 3’s funds for
personal expenses, legal expenses, and an unrelated lawsuit are misappropriation.
60. Then, on April 8—after Investor 3’s promissory note was due for payment—Palazzo
wired $180,000 through three STACK bank accounts that he controlled before ultimately wiring the
money to SPay on the same day.  Palazzo testified that this payment was a necessary part of the
repurchase process.  But, according to an SPay representative, SPay’s controller periodically asked
if Palazzo’s STACK unit was generating cash and, if so, to direct it to be sent to the parent
company.  Moreover, SPay described the purpose of this $180,000 payment in a balance sheet entry
as “a net cash payment and reduce Old Stack receivable.”  Thus, Palazzo sent this payment to SPay
pursuant to STACK’s normal operating agreements and to lead SPay to believe that STACK was
generating cash.  Further, during this period, SPay and Palazzo were not in active negotiations
because SPay had paused the negotiations to investigate Palazzo’s knowledge of STACK’s
purported debts to Entity A.  And, indeed, SPay fired Palazzo two days after this payment transfer.
Thus, this payment had nothing to do with repurchasing STACK.
61. Palazzo’s immediate misappropriation of Investor 3’s funds shows that he never had
any intention of using her investment to pursue the STACK repurchase.  Further, his statements
were materially misleading because a reasonable investor would have wanted to know that Palazzo
intended to use investor funds for STACK’s debts and Palazzo’s personal and legal expenses; rather
than, the stated business purpose.  Indeed, Investor 3 has stated that she would not have invested if
she knew that Palazzo was going to use the funds for personal expenses.
62. Moreover, Palazzo’s misappropriation here comes after he had already
misappropriated nearly $500,000 raised from other investors.  His previous misappropriation of

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Investor 1 and 2’s funds further demonstrates that at the time he solicited funds from Investor 3, he
did so knowing that he planned to use the funds for his personal benefit and not to advance the
STACK repurchase.
63. Palazzo knew, or was reckless or negligent in not knowing, that he and 4TA Sports
had provided a credit placement agreement to Investor 3, which would never be funded.  According
to the agreement, 4TA Sports was supposed to receive the $5 million from Media Company D in
March 2020.  In reality, Palazzo had entered into an identical credit placement agreement with
Media Company D in September 2019 and was supposed to receive the funds that month.  Media
Company D never provided the funds.  Yet, after months of not receiving the $5 million, Palazzo
asked Media Company D’s managing director to sign a new agreement in January 2020, stating: “I
can’t show the old agreement to my funding source. I need something recent.”  Palazzo asked the
managing director to sign yet another new version in in late February 2020 and a follow-up letter in
early March, prompting Palazzo to send an email stating: “Hopefully this helps us get something
closed!”  These emails demonstrate that Palazzo knew, or was reckless or negligent in not knowing,
that the $5 million credit placement agreement was simply a ruse to obtain money from Investor 3,
and that there was never any true intention of the credit placement agreement actually funding.
Indeed, the credit placement agreement that Palazzo provided to Investor 3 never funded.
64. Taken together, Palazzo knew that his representations to Investor 3 about the $5
million credit placement agreement were false.  Further, these statements were materially
misleading because a reasonable investor would have wanted to know that the collateral for the
promissory note had not been secured because it rendered their investment riskier.  Indeed, Investor
3 has stated that she ultimately invested because the credit placement agreement convinced her that
her investment was safe.
65. Palazzo has not repaid Investor 3 any of the principal or interest due on her
promissory note.  When contacted by Investor 3, Palazzo continues to claim that he does not have
the funds to repay her.  Palazzo has never informed Investor 3 that he spent her investment on debts
and personal and legal expenses.

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4. Palazzo Misappropriated Investor Funds.
66. As described above, between October 2019 and March 2020, Palazzo received
$900,000 to repurchase STACK through promissory notes between 4TA Sports and Investors 1, 2,
and 3.  During this same period, 4TA Sports had no source of funds other than this $900,000.
Palazzo misappropriated nearly all $900,000, using the funds for prior debts, transfers to the NP
Vent Account, and litigation expenses unrelated to Palazzo’s efforts to repurchase STACK.  The
below chart breaks down the specific use of the investor funds.
Category Amount Percentage
Entity A settlement and payments                                   $265,000                                   29.4%
Transfers to NP Vent subsequently used for
personal expenses
$170,386.30                          18.9%
Transfers to NP Vent subsequently used for
unrelated debts and litigation expenses
$10,500                               1.2%
Payments to Marketing Firm B $170,000 18.9%
Legal Fees for the 2019 Civil Lawsuit $55,000 6.1%
Payments to SPay                                                             $180,000                                                             20.0%
Other STACK Debts $29,522 3.3%
Subtotal of improperly used funds $880,408.30 97.8%
Business expenses $0 0.0%
Transfers to NP Vent subsequently used for
potential business expenses
$5,574.92                             0.6%
Transfers to NP Vent subsequently used for
other expenses
$12,641.02                            1.4%
Other expenses $826 0.1%
Subtotal of funds not presently alleged to be
improperly used
$19,041.94  2.1%
Total                                                                                $899,598
67. Because he was the person both making the statements above and misappropriating
investor funds, Palazzo knew, or was reckless or negligent in not knowing, that his statements to
investors were materially false and misleading.  He also knew, or was reckless or negligent in not
knowing, that his misappropriation of funds acted, or would act, as a fraud or deceit upon these
same investors.  Because Palazzo was the CEO and sole shareholder of 4TA Sports and acted on
behalf of 4TA Sports when signing the notes and investment contracts discussed above, his scienter
and negligence imputes to 4TA Sports.  Additionally, because Palazzo managed 4TA Sports on a
day-to-day basis, negotiated the notes and investment contracts at issue, and controlled the financial

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expenditures for 4TA Sports throughout this period, he is a control person of 4TA Sports within the
meaning of Section 20(a) of the Exchange Act.
68. The SEC has recently received information that, within the past three months,
Palazzo may have re-victimized Investors 2 and 3 by inducing them to sign amendments to the
promissory notes described above that supposedly convert the funds owed to the investors into
equity in yet another Palazzo business venture.  Investor 1 received a similar solicitation from
Palazzo but has not signed an amendment to his agreements with Palazzo and 4TA Sports.  When
soliciting Investor 1 to sign these amendments, Palazzo omitted any reference to how he had
previously used Investor 1’s funds.  That omission rendered materially misleading statements that
Palazzo made to Investor 1 in the new solicitation, including that the new business was “an
opportunity to reorganize and amend your current outstanding 4TA Sports Note to facilitate
repayment and provide appropriate collateral.”  Based on the documents the SEC has presently
obtained regarding the solicitations of Investors 2 and 3, it appears that Palazzo similarly omitted
his misappropriation of funds when recently soliciting them, which rendered similar statements to
them materially misleading.  The SEC is continuing to assess these new developments.  However,
Palazzo’s misleading efforts to have investors sign amendments to their prior agreements, including
representations that these amendments are a way for investors to obtain repayment, are part of his
scheme to conceal from them his intentional misappropriation of their funds.
C. Palazzo, NP Ventures, and Play Caller Fraudulently Raised Approximately $2.1
Million from Investors by Misrepresenting that the Investments Would Fund
the Development of a Sports Betting Application.
1. Overview of the Play Caller Scheme.

69. With the ink barely dry on Investor 3’s promissory note, Palazzo pivoted and formed
NP Ventures in April 2020 and Play Caller in May 2020.  Palazzo testified that NP Ventures is an
operating company that supports new companies created by him, including Play Caller.  At all
relevant times, Palazzo was the CEO and majority shareholder of NP Ventures; NP Ventures was
the majority shareholder of Play Caller; and Palazzo served as CEO of Play Caller.  Play Caller

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purports to be a technology company focused on sports betting, fantasy sports, gaming, and
providing data and fan engagement experiences.
70. After forming NP Ventures and Play Caller, Palazzo commenced the Play Caller
Scheme in September 2020.  From September 2020 until December 2023, Palazzo raised more than
$2.1 million from at least 22 investors through Play Caller and NP Ventures, representing that
investor funds would be used to develop and launch the Play Caller mobile application through
which players could bet on the next play in a live sports game (the “Play Caller App”).  Instead,
however, Palazzo misappropriated more than 75 percent of these investor funds to pay undisclosed
debts, litigation fees, personal expenses, including vacations to Disneyland and Hilton Head Island,
South Carolina, and consulting fees to himself.
71. The $2.1 million raised consisted of approximately $1 million in NP Ventures
investments from 5 investors and approximately $1.1 million in Play Caller investments from
approximately 17 investors.  All but one investor’s investments were memorialized in convertible
promissory notes with NP Ventures or Play Caller.  One convertible promissory note purported to
pay 15% interest; the rest purported to pay 6% interest.
72. The Play Caller and NP Ventures convertible promissory notes are securities.
Indeed, most of the notes discussed below state on their face that they are securities subject to
certain transfer restrictions under the federal securities laws.  Additionally, they are interest-bearing
and can convert into equity securities.  Alternatively, they are also investment contracts under
which each similarly-situated victim invested money (which was then pooled together) with the
expectation of profits from Palazzo’s efforts.

2. Palazzo Misappropriated Investor Money.
73. Palazzo, through NP Ventures and Play Caller, approached at least 22 investors.  In
many instances, Palazzo emailed and often spoke with investors using pitch decks that he drafted.
Palazzo represented to each investor discussed below that their investment would be used to
develop the Play Caller App.  However, in each instance, Palazzo misappropriated the
overwhelming majority of funds for his personal use.  His specific materially misleading statements

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concerning how investor funds would be used and his subsequent misappropriation of funds are
detailed below.
a. Palazzo and Play Caller Defrauded a Group of Eight Investors—Twice.
i. The First Fraudulent Offering to the Dallas Investor Group.
74. On or around November 11, 2020, Palazzo pitched a group of eight Dallas-area
investors (the “Dallas Investor Group”) on a Play Caller investment through an in-person meeting
and presentation.  According to a member of the Dallas Investor Group (“Investor 4”), Palazzo
represented to the group that their investment funds would be used to pay software engineers
working on the Play Caller App.  He also represented that the Play Caller App would be launching
in January 2021, just in time for the NFL playoffs.
75. Further, Palazzo’s presentation included a slide titled “Use of Funds.”  That slide
stated that a $500,000 investment would allow Play Caller to (1) “Secure key data, engineering and
management talent”; (2) “Execute against [strategic distribution] partnership to bring API to
sportsbook market”; and (3) “Develop first ‘Free to Play’ Game in partnership with major
telecommunications partner/s.”  Palazzo also represented that his salary would be limited to $20,833
per month and sent a spreadsheet indicating that his salary would represent a relatively small
portion of Play Caller’s overall expenses.
76. After this meeting, in December 2020, the members of the Dallas Investor Group
collectively invested $500,000 in the Play Caller offering.  Each investor’s investment was
memorialized in a convertible promissory note with Play Caller and had a maturity date of
December 28, 2022.
77. After obtaining the Dallas Investor Group’s funds in December 2020, Palazzo
wasted no time in putting them to his personal use.  Indeed, that month, Palazzo used approximately
$19,000 of the funds to pay legal fees related to the 2019 Civil Lawsuit.  Then, in January 2021,
Palazzo spent $235,000 of the $500,000 investment to settle the 2019 Civil Lawsuit.  Further,
between December 2020 and March 2021, Palazzo spent approximately $54,000 to repay part of his
outstanding debt to Marketing Firm B.  Palazzo also used approximately $21,000 of the Dallas
Investor Group’s funds to pay a company that removes negative information from individuals’

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online search results.  Additionally, Palazzo transferred at least $37,000 of funds from the Dallas
Investor Group to the NP Vent Account, which he primarily used for personal expenses.  Palazzo
had exhausted the entire $500,000 investment by around April 6, 2021.  In total, Palazzo and Play
Caller spent less than ten percent of the Dallas Investor Group’s funds on Play Caller’s software
engineers and other development personnel.
78. Thus, despite Palazzo’s representations that his salary would represent a relatively
small portion of Play Caller’s overall expenses, he subsequently spent approximately 80% of the
Dallas Investor Group’s funds for his personal use, as shown in the chart below.  During the period
from December 2020 through March 2021, Play Caller had no source of funds other than the
$500,000 from the Dallas Investment Group.  For purposes of this chart, “personal use” includes the
consulting fees that operated as Palazzo’s salary, other personal expenses, and debts and litigation
expenses unrelated to Play Caller.
Month Disclosed
Salary
Disclosed Salary
as % of Planned
Expenses
Total Funds
Actually
Spent
Amount Spent
on Personal Use
% Spent on
Personal
Use
Dec. 2020 $20,883 3.2% $93,382.06 $78,132.06 83.7%
Jan. 2021 $20,883 8.2% $281,276.17 $265,150.00 94.3%
Feb.               2021               $20,883                7.4%               $102,172.76               $33,559.00               32.8%
Mar. 2021 $20,883 6.8% $23,071.10 $20,700 89.7%
Total              $83,333                5.6%               $499,902.09              $397,541.06 79.5%
79. Palazzo’s statements that he intended to use the Dallas Investor Group’s funds on
developing the Play Caller App were thus materially misleading because a reasonable investor
would have wanted to know that their funds were not being used for their intended business
purpose.  Indeed, Investor 4 has stated that he would not have invested if he knew Palazzo was
using his investment on legal settlements and other personal expenses.
ii. The Second Fraudulent Offering to the Dallas Investor Group.
80. In December 2022, the eight notes came due, and Palazzo made lulling statements
that not only prevented members of the Dallas Investor Group from complaining about his actions,
but also fraudulently convinced all of them to roll their investment forward into new notes.

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81. For instance, on or around November 8, 2022, Investor 4 emailed Palazzo ahead of
the notes’ maturity date of December 28, 2022.  Investor 4 asked Palazzo for the Play Caller App’s
status and Play Caller’s balance sheets and income statements.
82. Palazzo responded the next day, attaching income statements and a balance sheet.
The income statements showed that Play Caller had $50,966 in total expenses in each month of
2021, with $37,781 spent on “product, technology & team expenses,” $2,000 spent on “software &
application expenses,” and $11,175 on “other product & dev expenses.”  The balance sheet showed
that Play Caller had $10,409 in cash and cash equivalents in October 2021 and $158,224 in cash and
cash equivalents as of December 2021.  These statements were false.
83. For example, the statement that Play Caller spent only $50,966 in January 2021 was
false.  Play Caller spent $235,000 on the 2019 Civil Lawsuit alone in January 2021, and also had
other expenses.  The statement that Play Caller spent only $50,966 in July 2021 was similarly false.
In July 2021, Palazzo had used another Play Caller investor’s funds to pay more than $60,000 in
rent and a security deposit for a multi-million-dollar home, currently valued at over $5 million, for
him and his family.
84. Additionally, Play Caller did not have cash and cash equivalents of $10,409 in
October 2021 and $158,224 in December 2021.  According to Play Caller’s bank records, in
October 2021, the company had a beginning balance of $10 in its bank account and an ending
balance of $30.  In December 2021, the company had a beginning balance of $18.25 in its bank
account and an ending balance of $19.25.  The company had similarly low funds from September
through December 2021.
85. As the sole signatory to the Play Caller bank account, Palazzo had full control and
knew Play Caller’s expenditures and cash on hand.  His bald-faced falsities were an attempt to
cover up his misappropriation of funds.
86. Palazzo’s deception resulted in six of the investors agreeing to roll their notes
forward another year while the other two investors rolled their notes forward to February 2023.  All
eight extensions were memorialized in amended promissory notes executed by Palazzo, acting on

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behalf of Play Caller.  These amended promissory notes are also securities for the same reasons as
the original notes.
87. Palazzo has not repaid any investors in the Dallas Investor Group any of the
principal or interest due on their convertible promissory notes.
b. Palazzo Defrauded a Former Professional Athlete.
88. Having exhausted the Dallas Investor Group’s funds, Palazzo moved on to new
targets of opportunity.  On or around June 8, 2021, Palazzo sent a Play Caller presentation to a
former professional athlete and an employee at a venture capital firm affiliated with the athlete.
Approximately one month later, on or around July 16, 2021, Palazzo received a $100,000
investment in Play Caller from the venture capital firm (“Investor 5”).  This investment was
memorialized in a convertible promissory note with Play Caller and had a maturity date of
December 2022.
89. In the presentation, Palazzo represented that Play Caller was “raising capital to
execute against specific product development targets for the next 12 months to bring its proprietary
engine and games to market through strategic partnerships.”  This was not true.
90. To the contrary, the very day that Palazzo and Play Caller received Investor 5’s
funds, Palazzo began transferring money from the Play Caller bank account to NP Ventures’ bank
account.  Then, of the $85,000 in funds transferred to NP Ventures between July 16, 2021, and July
27, 2021, Palazzo spent more than $60,000 on a security deposit and the first three months’ rent for
his family’s new multi-million-dollar rental home.  He spent another $8,000 on moving expenses
and $5,000 on litigation expenses unrelated to Play Caller.  Palazzo transferred the remaining
approximately $13,000 of Investor 5’s money from a Play Caller bank account to the NP Vent
Account.  Of those funds, Palazzo spent approximately $9,000 on rent for his previous rental home
and $1,200 on credit card payments.
91. In total, Palazzo spent less than $2,500 of Investor 5’s money on business expenses
of Play Caller.  Palazzo has not repaid Investor 5 any of the principal or interest due on its
convertible promissory note.

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c. Palazzo Defrauded a Gaming Industry Advisory Firm.
92. Palazzo’s misappropriation of investor funds continued unabated.  On or around
February 28, 2022, Palazzo sent a manager of a gaming industry advisory firm a Play Caller
presentation.  A few weeks later, on or around March 17, 2022, the gaming industry advisory firm
(“Investor 6”) invested $100,000 in Play Caller.  Investor 6’s investment was memorialized in a
convertible promissory note with Play Caller and had a maturity date of February 2023.
93. In the presentation, Palazzo represented that Play Caller “plans to raise capital to
execute specific product development goals, including integration of web3 elements, to bring its
platform to market generating revenues through licensing and real-money competitions.”  Once
again, this was not true.  Instead, Palazzo again misappropriated investor funds to subsidize his
lifestyle.
94. Indeed, shortly after receiving Investor 6’s funds, in April 2022, Palazzo spent
approximately $10,000 at the Mandalay Bay Resort & Casino in Las Vegas and approximately
$4,200 on airfare.  Between March 17 and April 26, 2022, he transferred more than $60,000 to the
NP Ventures account.  He used those funds to spend $12,250 on personal rent, more than $5,000 on
his children’s private school and daycare, and more than $20,000 on other personal expenses,
including car payments, dental expenses, and purchases at a pool supply store.  He withdrew
another approximately $4,200 in cash and transferred at least $8,800 to the NP Vent Account,
which he used primarily for personal expenses.
95. In total, Palazzo spent less than $20,000 of Investor 6’s money on Play Caller’s
business expenses.  Palazzo has not repaid Investor 6 any of the principal or interest due on its
convertible promissory note.
d. Palazzo Defrauded a Navy Veteran.
96. Unfortunately, Palazzo also targeted as one of his victims an 89-year-old who served
in the United States Navy and other government roles before starting an investing career (“Investor
7”).  Between December 2020 and August 2023, Investor 7 sent Palazzo and NP Ventures $500,000
across 12 investments.  Investor 7’s investments were memorialized in convertible promissory notes
with NP Ventures and had maturity dates between December 6, 2021, and October 31, 2023.

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97. Palazzo testified that he told Investor 7 that his funds would be used to support the
continued development of Play Caller.  Documents provided to Investor 7, including a presentation
that Palazzo sent Investor 7, indicate that Palazzo solicited money from Investor 7 by referencing
both Play Caller and STACK.  For example, in or around August 2020, Palazzo sent Investor 7 a
document which states: “NP [Ventures] plans to raise $500,000 ($500k) in seed capital to launch.
Funds will be used to launch the Play Caller/4TA Sports businesses and support the buyback of
certain assets of Stack Media, my previous company, that are highly synergistic.”  Investor 7
subsequently began investing with Palazzo, sending him $100,000 on December 7, 2020, and
ultimately investing approximately $500,000 through a dozen notes between December 2020 and
September 2023.  Though Investor 7 may have invested in both the Play Caller and STACK
opportunities, Palazzo used little of Investor 7’s funds on either investment.  To the contrary, of the
$500,000, Palazzo misappropriated at least $450,000 by, for instance, using the funds to pay for
multiple vacations, including a trip to Disneyland.  For instance, on or around June 22, 2022,
Investor 7 made a $100,000 investment.  Starting the next day, and continuing to around June 27,
2022, Palazzo spent approximately $4,000 during a personal trip to Lake Tahoe.  Palazzo spent at
least $5,000 on another personal trip to Hilton Head Island in late July 2022.  Additionally, Palazzo
used Investor 7’s funds for various other personal expenses, including personal rent, car payments,
credit card payments, dental expenses, sports and fitness expenses, his children’s daycare and
private school expenses, and significant cash withdrawals.
98. Moreover, throughout 2023, Palazzo made several “lulling” statements to Investor 7
that were designed to both give Investor 7 a false sense of security and operated as new frauds that
convinced Investor 7 to invest additional funds.
99. For instance, on or around April 20, 2023, Palazzo wrote to Investor 7: “Finally, and
please know that I am embarrassed to ask and bother you, but I wondered given the timing of the
[new] capital coming in next month, if you would be able to help with one final $25k bridge
investment to help us get through until their capital arrives?”  Investor 7 provided $25,000 on or
around April 21, 2023.  Yet, there is no indication that Palazzo had new capital lined up or was

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spending money to develop the Play Caller App.  Indeed, Palazzo received no additional capital
until he convinced Investor 7 to provide him with another $25,000 on or around May 25, 2023.
100. Between April and August 2023, Palazzo continued this same pattern of “lulling”
statements followed by new fraudulent requests for additional investments.  Each time, Investor 7
provided Palazzo and NP Ventures with more funds in exchange for a new promissory note signed
by Palazzo on behalf of NP Ventures.
101. In total, Palazzo and NP Ventures spent less than $55,000 of Investor 7’s funds on
business expenses.  Palazzo has not repaid Investor 7 any of the principal or interest due on his
convertible promissory notes.  On information and belief, Investor 7 still trusts Palazzo and despite
the efforts of the SEC staff to reach out to him, Investor 7 is unaware that he has been defrauded.
e. Palazzo Defrauded a Senior Care Coordinator.
102. After years of misleading investors and misappropriating funds, Palazzo’s scheme
was still continuing in late 2023—even after Palazzo became aware of the SEC’s investigation.  On
or around September 28, 2023, Palazzo orally represented to a senior care coordinator that her
investment would be used to market the launch of Play Caller.  On or around September 28, 2023,
Palazzo received a $100,000 investment from an entity (“Investor 8”) that the senior care
coordinator formed with a realtor.  This investment was memorialized in a convertible promissory
note with Play Caller and has a maturity date of September 21, 2024.
103. Palazzo did not use Investor 8’s funds for marketing Play Caller.  Indeed, Play Caller
did not even launch a version of the App until after Palazzo exhausted Investor 8’s funds.  Instead,
Palazzo spent approximately $46,400 at a San Francisco jeweler, another $9,500 on personal rent,
approximately $5,000 on airfare, and more than $9,000 on other personal expenses, including a trip
to Hilton Head Island.
104. In total, Palazzo and Play Caller spent less than $14,000 of Investor 8’s funds on any
business expenses.  Palazzo has not repaid Investor 8 any of the principal or interest due on its
convertible promissory note.
105. Each of the above statements made by Palazzo, in his capacity as CEO and Chairman
of NP Ventures and Play Caller, were materially misleading because a reasonable investor would

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have wanted to know that Palazzo did not intend to use their funds to develop Play Caller’s App but
rather to fund his lavish lifestyle, legal settlements, and other personal expenses.  And, indeed,
several of the Play Caller investors listed above have stated that they would not have invested if
they knew their funds would be used for Palazzo’s personal expenses.
3. Palazzo Misappropriated Play Caller Investor Funds.
106. Between September 2020 and December 2023, Palazzo received approximately $2.1
million to develop his Play Caller business, primarily through convertible promissory notes between
investors and Play Caller or NP Ventures.  Play Caller and NP Ventures received a limited amount
of non-investor funds during that time, including consulting income earned by Palazzo and
Palazzo’s own funds.  Play Caller received approximately $125,000 from non-investor sources,
while NP Ventures received approximately $157,000 from non-investor sources.
107. A breakdown of how Palazzo spent the combined Play Caller and NP Ventures
investors’ funds appears below.  For purposes of this chart, to the extent Play Caller and NP
Ventures had non-investor sources of funds, the SEC has (favorably to the Defendants) first credited
personal expenses against those non-investor funds, and what is shown below is how investor funds
were used.
NP Venture and Play Caller Use of Investor Funds
Spending Categories Amount Percentage
Undisclosed consulting fees to NP Vent and NP
Ventures
$1,094,798.85              50.6%
Personal expenses $241,300.64

11.1%

Unrelated debts and litigation expenses $421,092.45 19.5%
Subtotal of improper use of investor funds $1,757,191.94 81.2%
Other expenses $79,030.94 3.7%
Potential business expenses $327,914.35 15.1%
Subtotal of use of funds not presently alleged to be
improper
$406,945.29 18.8%
Total                                                                                    $2,164,137.23

108. Even if the amounts in the chart above are offset by the $83,333 Palazzo
misleadingly described as his salary to the Dallas Investor Group, he still misappropriated more
than 75% of investor funds.

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109. Because he was the person both making the statements above and misappropriating
investor funds, Palazzo knew, or was reckless or negligent in not knowing, that his statements to
investors were materially false and misleading.  He also knew, or was reckless or negligent in not
knowing, that his misappropriation of funds acted, or would act, as a fraud or deceit upon these
same investors.  Because Palazzo was the CEO and controlling shareholder of both Play Caller and
NP Ventures, and acted on behalf of Play Caller and/or NP Ventures when signing the promissory
notes discussed above, his scienter and negligence is imputed to Play Caller and NP Ventures.
Additionally, because Palazzo managed both Play Caller and NP Ventures on a day-to-day basis,
negotiated the promissory notes at issue, and controlled the financial expenditures for both Play
Caller and NP Ventures throughout this period, he is a control person within the meaning of Section
20(a) of the Exchange Act.
4. Palazzo Attempted to Paper Over His Fraud Through His Substantial
Consulting Payments and Loans to Himself.
110. As Palazzo kicked off the Play Caller offering, in or around September 2020,
Palazzo entered into separate consulting agreements with Play Caller and NP Ventures.  Each
agreement was structured to pay entities controlled by Palazzo $20,000 per month in purported
“consulting fees” (through NP Vent or NP Ventures).  Palazzo, as the Chairman and CEO of each
entity, is the lone signatory on each agreement.  The terms of these agreements provided entities
controlled by Palazzo total annual consulting fees of $480,000.  Between 2020 and 2023, Palazzo
transferred approximately $1 million in investor funds to himself (through NP Vent or NP
Ventures) pursuant to these agreements, which he used primarily for personal expenses, legal
settlements, and litigation expenses.  In contrast, Palazzo spent less than $350,000 on developing
the Play Caller App.  Palazzo did not disclose the consulting agreements nor the extent of his
“compensation” to investors except for the misleading disclosures to the Dallas Investor Group
described above in paragraphs 74-75, 77-79, and the misleading disclosure to Investor 6 and others
discussed in paragraph 113 below.
111. On top of consulting fees, Palazzo also paid personal expenses and unrelated debts
and litigation expenses directly out of Play Caller and NP Ventures’ bank accounts.  Indeed,

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Palazzo testified that he paid his personal expenses out of these bank accounts and that, on a
monthly basis, he performed a reconciliation allocating each personal expense as either: (1) expense
reimbursement, (2) consulting fees, or (3) loans to himself.  At the end of each year, Palazzo
papered over his theft of investor funds by executing a note for the amount he had “loaned” himself
during the year.  As of January 2024, there were four outstanding notes:  a $170,000 note for 2020,
a $145,000 note for 2021, a $210,000 note for 2022, and a $184,000 note for 2023, for a total of
$709,000.  Each note has a five-year term, and Palazzo has not made any payments of principal or
interest under the notes back to the companies.  Again, Palazzo has acknowledged that he never
revealed these “loans” to his investors.
112. Even if Palazzo was entitled to some salary or consulting fees for his efforts,
omitting that he was going to spend more than 80% of investor funds on his salary, personal
expenses, unrelated legal settlements, and unrelated legal expenses and a mere 20% of investor
funds on engineering and other development expenses rendered the statements he made about using
investor funds to develop the Play Caller App materially misleading.  Further, in pitch decks to
several investors, including to Investor 5, he made specific representations that the money would
not only be used to build the Play Caller App, but that it would be used to execute against a list of
specific product development targets.  However, Palazzo spent nearly all of Investor 5’s $100,000
investment on consulting fees to entities he controlled, more than 75% of which ultimately went
toward Palazzo’s personal rent, security deposit, and moving expenses.  Thus, Palazzo’s
representations to Investor 5 were false and misleading.
113. Additionally, in pitch decks to Investor 6 and two other investors not individually
discussed in this Complaint, Palazzo disclosed projected payroll related expenses, along with
projections for millions in revenue, profits, operating income, and expenses.  All these projections
were built on the premise that Play Caller would be an operating company with revenue and
expenses.  However, from May 22, 2020 to December 31, 2023, Play Caller had no significant
source of income or revenue—virtually all of its funds appeared to be investor funds or funds from
Palazzo or Palazzo-affiliated entities.  Thus, Palazzo omitting to tell Investor 6 and other investors
that he intended to use approximately 80% of their investment on personal and other non-business

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expenses and a mere 20% on operating expenses, including investment on engineering and other
development expenses rendered his disclosures concerning payroll related expenses materially
misleading.
114. Nor can Palazzo claim that his consulting fees were reasonable, and investors should
have contemplated that he would need a salary.  To the contrary, Palazzo’s representations to
investors through, for instance, payroll projections that he provided in his pitch decks clearly
contemplated an operating business, with a growing payroll, devoted to developing the Play Caller
App, and not a founder using the overwhelming majority of investor money as his own personal
slush fund, which he then used to bankroll his living expenses.
115. For example, the pitch deck that Palazzo drafted and provided to the Dallas Investor
Group prior to their $500,000 investment disclosed that Palazzo would receive a $250,000 salary in
2021, representing approximately 5% of Play Caller’s planned expenditures for that year.  However,
nowhere in the slide deck or other communications did Palazzo disclose that he would use their
investment to settle a civil lawsuit, pay outstanding debts, and on other personal expenses.  In any
event, he spent approximately $530,000—including approximately $400,000 from the Dallas
Investor Group—on non-business expenses in 2021, which was not only well in excess of Palazzo’s
disclosed $250,000 salary but represented over 75% percent of Play Caller’s actual expenses for
2021.
116. Given Palazzo’s repeated statements to investors that their funds would be used to
develop the Play Caller App, his use of $1.7 million on himself or to pay debts and litigation
expenses unrelated to Play Caller, and less than $350,000 on developing Play Caller, rendered his
statements materially false and misleading.  The consulting agreements and loans were not
legitimate payments for business operations, but a cover-up and part of Palazzo’s overall deliberate
scheme to steal investor funds.
117. The SEC has recently received information that within the past three months Palazzo
may have sought to re-victimize numerous NP Ventures and Play Caller investors by soliciting
them to sign amendments to the notes described above in exchange for equity in NP Ventures,
and/or Play Caller warrants.  As with the 4TA Sports amendments discussed above, the documents

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the SEC has received indicate that Palazzo omitted any mention of his past use of investor funds
when soliciting these amendments, and that omission rendered materially misleading Palazzo’s
statements to the investors such as “I will also be personally guaranteeing any outstanding
promissory notes in NP Ventures. it is important that I do all I can to help each investor earn a
strong return, while also providing additional security for the notes, especially because we had
hoped to pay them back already.”  As with the recent solicitations of the 4TA Sports investors, the
SEC is continuing to assess these new developments.  However, Palazzo’s misleading efforts to
have investors sign amendments to their prior agreements, including representations that these
amendments are a way for investors to obtain repayment, are part of his scheme to conceal from
them his intentional misappropriation of their funds.
118. In total, across both the STACK Scheme and the Play Caller Scheme, Palazzo,
through the Corporate Defendants, received approximately $3,065,000 in investor funds between
October 2019 and December 2023.  Palazzo has spent more than $1 million on consulting fees to
himself.  He has spent another $1.1 million on unrelated past business debts and litigation expenses
and $400,000 on personal expenses beyond the consulting fees to himself.  This misappropriation of
investor funds, combined with how Palazzo often misappropriated investor funds immediately after
receiving them, demonstrates that these schemes were not legitimate businesses that failed, but
intentional schemes by which Palazzo sought to defraud people, including his friends, in order to
enrich himself.
CLAIMS FOR RELIEF
FIRST CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rule 10b-5 thereunder
(All Defendants)
119. The SEC re-alleges and incorporates by reference each allegation in paragraphs 1
through 118 above.
120. As set forth above, the Defendants engaged in two fraudulent schemes—the STACK
and Play Caller Schemes—by misappropriating investor money intended for business purposes for
Palazzo’s own enrichment.  Specifically, Palazzo spent the overwhelming majority of investors’

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money on personal expenses such as rent for a multi-million-dollar home, private school tuition,
jewelry, and a Disney vacation as well as on undisclosed debts, litigation fees, and other expenses
unrelated to the business ventures for which he had solicited the investments.  Palazzo then engaged
in fraudulent “lulling” statements, which in some instances were designed to prevent and did
prevent investors from reporting Palazzo for his conduct and in other instances were designed to
and did induce some investors to invest more funds or agree to roll over promissory notes.
121. As set forth above, Defendants made material misstatements and omitted material
facts necessary to make other statements not misleading to investors concerning the Corporate
Defendants’ financing and use of investor funds.  In the STACK Scheme, Palazzo represented to
Investors 1, 2, and 3 that he had obtained, or would shortly obtain, $5 million in funding.  However,
Palazzo knew, or was reckless in not knowing, that he had not secured or would not shortly secure
$5 million in funding.  Second, in both the STACK and Play Caller Schemes he represented that
investor funds would be used for business purposes when he knew he intended to, and subsequently
did, use the overwhelming majority of funds for his personal benefit.
122. Further, because Palazzo was the CEO and controlling shareholder of 4TA Sports,
NP Ventures, and Play Caller, and acted on behalf of 4TA Sports, NP Ventures, and Play Caller
when making the materially misleading statements and signing the promissory notes and
agreements, his scienter is imputed to 4TA Sports, NP Ventures, and Play Caller.
123. By engaging in the acts and conduct alleged in this Complaint, the Defendants
directly or indirectly, by the use of the means and instrumentalities of interstate commerce or of the
mails, in connection with the purchase or sale of securities, with scienter: (a) employed devices,
schemes, or artifices to defraud, (b) made untrue statements of a material fact or omitted to state a
material fact necessary in order to make the statements made, in light of the circumstances under
which they were made, not misleading; and (c) engaged in acts, practices, or courses of business
which operated or would operate as a fraud or deceit upon other persons.
124. By engaging in the foregoing conduct, Defendants violated, and unless restrained
and enjoined will continue to violate, 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.

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SECOND CLAIM FOR RELIEF
Violations of Section 17(a)
(All Defendants)
125. The SEC realleges and incorporates by reference each allegation in paragraphs 1
through 118 above.
126. As set forth above, the Defendants engaged in two fraudulent schemes—the STACK
and Play Caller Schemes—to defraud by misappropriating investor money intended for business
purposes for Palazzo’s own enrichment.  Specifically, Palazzo spent the overwhelming majority of
investors’ money on personal expenses such as rent for a multi-million-dollar home, private school
tuition, jewelry, and a Disney vacation as well as on undisclosed debts, litigation fees, and other
expenses unrelated to the business ventures for which he had solicited the investments.  Palazzo
then engaged in fraudulent “lulling” statements, which in some instances were designed to prevent
and did prevent investors from reporting Palazzo for his conduct and in other instances were
designed to and did induce some investors to invest more funds or agree to rollover promissory
notes.
127. As set forth above, Defendants made material misstatements and omitted material
facts necessary to make other statements not misleading to investors concerning the Corporate
Defendants’ financing and use of investor funds.  In the STACK Scheme, Palazzo represented to
Investors 1, 2, and 3 that he had obtained, or would shortly obtain, $5 million in funding.  However,
Palazzo knew, or was reckless or negligent in not knowing, that he had not secured or would not
shortly secure $5 million in funding.  Second, in both the STACK and Play Caller Schemes he
represented that investor funds would be used for business purposes when he instead used the
overwhelming majority of funds for his personal benefit.
128. Further, because Palazzo was the CEO and controlling shareholder of 4TA Sports,
NP Ventures, and Play Caller, and acted on behalf of 4TA Sports, NP Ventures, and Play Caller
when making the materially misleading statements and signing the promissory notes and
agreements, his scienter and negligence are imputed to 4TA Sports, NP Ventures, and Play Caller.

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129. By engaging in the conduct described above, the Defendants, directly or indirectly,
in the offer or sale of securities, and by the use of means or instruments of transportation or
communication in interstate commerce or by use of the mails directly or indirectly: (a) employed
devices, schemes, or artifices to defraud; (b) obtained money or property by means of untrue
statements of a material fact or by omitting to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not misleading; and (c)
engaged in transactions, practices, or courses of business which operated or would operate as a
fraud or deceit upon the purchaser of the securities offered or sold by the Defendants.
130. By engaging in the foregoing conduct, Defendants violated, and unless restrained
and enjoined will continue to violate, Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a).
THIRD CLAIM FOR RELIEF
Control Person Violations of Exchange Act Section 10(b) and Rule 10b-5 thereunder,
pursuant to Exchange Act Section 20(a)
(Defendant Palazzo)
131. The SEC realleges and incorporates by reference each allegation in paragraphs 1
through 118 above.
132. At all relevant times, Defendant Palazzo was a control person of Defendants 4TA
Sports, NP Ventures, and Play Caller, because he possessed, directly or indirectly, and exercised
actual control over the operations of 4TA Sports, NP Ventures, and Play Caller.
133. Specifically, because Palazzo was the CEO and controlling shareholder, managed
4TA Sports on a day-to-day basis, negotiated the notes and investment contracts at issue, and
controlled the financial expenditures for 4TA Sports throughout this period, he is thus a control
person within the meaning of Section 20(a) of the Exchange Act.
134. Additionally, because Palazzo was the CEO and controlling shareholder of both Play
Caller and NP Ventures, managed both Play Caller and NP Ventures on a day-to-day basis,
negotiated the promissory notes at issue, and controlled the financial expenditures for both Play
Caller and NP Ventures throughout this period, he is thus a control person within the meaning of
Section 20(a) of the Exchange Act.

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135. Palazzo did not act in good faith when he made materially misleading statements to
investors and misappropriated investor funds, which he spent on personal expenses such as rent for
a multi-million-dollar home, private school tuition, jewelry, and a Disney vacation as well as on
undisclosed debts, litigation fees, and other expenses unrelated to the business ventures for which
he had solicited the investments.  To the contrary, because he was the person both making the
statements above and misappropriating investor funds, Palazzo knew, or was reckless in not
knowing, that his statements to investors were materially false and misleading.  He also knew, or
was reckless in not knowing, that his misappropriation of funds acted, or would act, as a fraud or
deceit upon these same investors
136. Accordingly, pursuant to Exchange Act Section 20(a), Palazzo is liable to the SEC to
the same extent as 4TA Sports, NP Ventures, and Play Caller are liable for their respective
violations of Exchange Act Section 10(b) and Rule 10b-5 thereunder.
PRAYER FOR RELIEF
WHEREFORE, the SEC respectfully requests that this Court enter a Final Judgment:
I.
Finding that Defendants violated the provisions of the federal securities laws as alleged
herein;
II.
Injunction
In forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure, permanently
enjoining Defendants Palazzo, 4TA Sports, NP Ventures, Play Caller and their officers, agents,
servants, employees, and attorneys, and those persons in active concert or participation with any of
them, who receive actual notice of the judgment by personal service or otherwise, and each of them,
from violating Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], and 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];

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III.
Conduct Based Injunction against Palazzo
 Permanently enjoining Palazzo from directly or indirectly, including, but not limited to,
through any entity owned or controlled by Palazzo, participating in the issuance, purchase, offer, or
sale of any securities, provided, however, that such injunction shall not prevent him from
purchasing or selling securities for his own personal account;
IV.
Disgorgement and Prejudgment Interest
Ordering Defendants to disgorge on a joint and several basis, and with prejudgment interest,
the ill-gotten gains and/or unjust enrichment they received directly or indirectly as a result of the
violations alleged here and to pay prejudgment interest thereon pursuant to Exchange Act Sections
21(d)(3), 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)];
V.
Civil Penalty
Ordering Defendants to pay civil monetary penalties pursuant to 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)];
VI.
Officer and Director Bar
Ordering, in accordance with Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)],
that Palazzo is prohibited from acting as an officer or director of any issuer that has a class of
securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 781], or that is
required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)];

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VII.
Further Relief
Granting such other and further relief as the Court may deem just, equitable, or necessary in
connection with the enforcement of the federal securities laws and for the protection of investors;
and
VIII.
Retaining Jurisdiction
Retaining jurisdiction of this action for purposes of enforcing any final judgments and
orders.
JURY DEMAND
Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff demands that this case
be tried before a jury.

Respectfully submitted,
Date: September 20, 2024  /s/ Carina A. Cuellar______
       Carina A. Cuellar
Lauren B. Poper
Brittany K. Frassetto
Attorneys for Plaintiff

Of Counsel
Christopher Bruckmann

COMPLAINT  Case No. 5:24-cv-6602 

 

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Carina A. Cuellar (Cal. Bar No. 244578) 
  [email protected] 
Lauren B. Poper (N.Y. Bar No. 2796704) 
  [email protected] 
Brittany K. Frassetto (N.Y. Bar No. 5119227) 
  [email protected] 
100 F Street, NE 
Washington, DC 20549 
Telephone:  (202) 551-6414 
Facsimile:   (202) 772-9292 
 
Attorneys for Plaintiff  
SECURITIES AND EXCHANGE COMMISSION 
 

UNITED STATES DISTRICT COURT 
NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 
 

 

SECURITIES AND EXCHANGE COMMISSION, 
 
 Plaintiff, 
v. 
 
NICHOLAS A. PALAZZO, 4TA SPORTS, INC.,  
NP VENTURES HOLDINGS, LLC, and  
PLAY CALLER SPORTS GAMING LLC, 
 
  Defendants. 

 

  
 
Case No. 5:24-cv-6602 
 
COMPLAINT 
 
DEMAND FOR JURY 
TRIAL 

  
Plaintiff Securities and Exchange Commission (“SEC”), for its Complaint against 

Defendants Nicholas A. Palazzo (“Palazzo”), 4TA Sports, Inc. (“4TA Sports”), NP Ventures 

Holdings, LLC (“NP Ventures”), and Play Caller Sports Gaming LLC (“Play Caller”), collectively 

“Defendants,” alleges as follows: 

SUMMARY 

1. Nicholas Palazzo defrauded more than two dozen investors and stole their money 

through two investment schemes.  A former Harvard football player, Palazzo often targeted former 

teammates as his victims.  But he also misappropriated investments from others, including a Navy 

veteran and a senior care coordinator.  Palazzo promised his victims that their investments would be 

used to fund his sports-related businesses.  Instead, he spent the overwhelming majority of 

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investors’ money on personal expenses such as rent for a multi-million-dollar home, private school 

tuition, jewelry, and a Disney vacation as well as on undisclosed debts, litigation fees, and other 

expenses unrelated to the business ventures for which he had solicited the investments.  In total, of 

the roughly $3.1 million Palazzo raised for two different purported business ventures, he spent 

approximately $2.6 million on himself and unrelated expenses. 

2. Palazzo is a 2003 graduate of Harvard University and a former football player.  To 

perpetrate his schemes, Palazzo used his collegiate relationships and sports connections to build 

trust while at the same time making materially false and misleading statements to investors about 

the businesses, including concerning third-party financing, the use of investor funds, and his 

compensation.  After obtaining money based on these false promises, Palazzo then spent nearly all 

of it on himself and unrelated expenses. 

3. From at least October 2019 to December 2023 (the “Relevant Period”), Palazzo and 

the sports-related corporate entities that he created and led—4TA Sports, Play Caller, and NP 

Ventures (together, the “Corporate Defendants”)—fraudulently raised money from investors 

through securities offerings in which the investors received various forms of notes and warrants.    

4. During the Relevant Period, Palazzo raised investor funds in two separate schemes: 

the STACK Scheme; and the Play Caller Scheme.  In both schemes, Palazzo targeted specific 

individuals, convinced these individuals to invest through materially misleading statements, 

misappropriated their funds, and then subsequently approached new investors because he needed 

more investor money to continue to fund his lavish lifestyle and pay his debts.  

5. First, in the STACK Scheme, between at least October 2019 and March 2020, 

Palazzo raised $900,000 from three investors by offering and selling secured promissory notes and 

warrants through 4TA Sports.  During this offering, he represented to all three investors that their 

investments would be used to repurchase the assets of STACK Media, Inc. (“STACK”).  STACK is 

a sports media company that Palazzo founded in 2005, largely sold in 2017, and was trying to then 

repurchase.  He further represented to all three investors that he either had or would shortly secure 

$5 million in third-party funding.  None of this was true.  Instead, shortly after receiving investor 

funds, he immediately spent the money to pay undisclosed debts, litigation fees, and personal 

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expenses, including his children’s private school tuition and personal rent.  Also, Palazzo knew, or 

was reckless or negligent in not knowing, that he had not secured or would not shortly secure $5 

million in third-party funding.  

6. Second, in the Play Caller Scheme, between at least September 2020 and December 

2023, Palazzo raised approximately $2.1 million from at least 22 investors by offering and selling 

convertible promissory notes through Play Caller and its majority owner, NP Ventures.  Palazzo 

represented that investor funds would be used to develop and imminently launch the Play Caller 

sports-betting application.  Once again, this was not true.  Instead, Palazzo misappropriated more 

than 75 percent of investor funds to (a) pay personal expenses, including vacations to Disneyland 

and Hilton Head Island, South Carolina, (b) settle an unrelated lawsuit, and (c) pay himself 

exorbitant consulting fees.   

7. As a result of the alleged conduct, the Defendants violated the antifraud provisions 

of Section 17(a) of the Securities Act, 15 U.S.C. §77q(a), and 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.  Palazzo is also liable as a 

control person for the Corporate Defendants’ violations of Section 10(b) of the Exchange Act and 

Rule 10b-5 thereunder pursuant to Section 20(a) of the Exchange Act. 

8. The SEC seeks a judgment from the Court, as set forth in more precise detail in the 

Prayer for Relief: (i) permanently enjoining the Defendants from violating Securities Act Section 

17(a) [15 U.S.C. §77q(a)], and Exchange Act Section 10(b) [15 U.S.C. §78j(b)], and Rule 10b-5 

thereunder [17 C.F.R. § 240.10b-5]; (ii) permanently enjoining Palazzo, including through any 

entity owned or controlled by Palazzo, from participating in the issuance, purchase, offer, or sale of 

any security (other than securities for his own personal account); (iii) directing the Defendants to 

disgorge all ill-gotten gains they received as a result of the acts and/or courses of conduct 

complained of, plus prejudgment interest thereon; (iv) directing the Defendants to pay civil money 

penalties; (v) barring Palazzo from serving as an officer or director of a public company; and (vi) 

granting such other relief as this Court may determine to be just, equitable, and necessary. 

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JURISDICTION AND VENUE 

9. The Court has jurisdiction over this action under Sections 20(b), 20(d)(1), and 22(a) 

of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a)], and Sections 21(d), 21(e), and 

27(a) of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa(a)].  

10. Defendants, directly or indirectly, used the means or instrumentalities of interstate 

commerce, or of the mails, in connection with the violations alleged in this Complaint. 

11. Venue is proper in this judicial district 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] because certain of the 

Defendants’ acts constituting the violations alleged herein, including making misrepresentations to 

investors and misappropriating their funds, occurred in this district.  Additionally, Defendant 

Palazzo resides in Santa Clara County, within this district, and each of the Corporate Defendants 

have their principal place of business in this district.  

INTRADISTRICT ASSIGNMENT 

12. Under Civil Local Rule 3-2(c) and (e), this civil action should be assigned to the San 

Jose Division because a substantial part of the events or omissions giving rise to the SEC’s claims 

occurred in Santa Clara County and Defendant Palazzo resides within Santa Clara County.  

DEFENDANTS 

13. Nicholas A. Palazzo, age 43, is a resident of Los Altos, California.  At all relevant 

times, Palazzo was the sole director and officer of 4TA Sports, Play Caller, and NP Ventures.  After 

graduating from Harvard, Palazzo remained in touch with some of his former Harvard football 

teammates and other former Harvard football players.  Palazzo generally presented himself as 

someone who worked in sports-oriented businesses, such as sports media companies.  During the 

fraud, as detailed below, Palazzo used approximately $2.6 million in investor funds for his personal 

expenses and other non-business expenses. 

14. 4TA Sports, Inc. is a Delaware corporation formed on July 31, 2019.  4TA Sports’ 

principal place of business is 228 Hamilton Ave., Floor 3, Palo Alto, California.  At all relevant 

times, Palazzo was the CEO and sole shareholder of 4TA Sports.  4TA Sports purported to be the 

entity through which Palazzo intended to repurchase STACK’s assets from their new owner, SPay, 

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Inc. (“SPay”).  From July 31, 2019 to the present, 4TA Sports has had no discernable source of 

income or revenue—virtually all of its funds appear to be investor funds. 

15. NP Ventures Holdings, LLC is a Delaware limited liability company formed on 

April 27, 2020.  NP Ventures’ principal place of business is 228 Hamilton Ave., 3rd Floor, Palo 

Alto, California.  At all relevant times, Palazzo was the majority shareholder of NP Ventures and 

served as President, Chief Executive Officer, Secretary, and Treasurer.  NP Ventures was, in turn, at 

all relevant times the majority shareholder of Play Caller and other Palazzo-controlled sports 

ventures.  From April 27, 2020 to December 31, 2023, NP Ventures received approximately 

$150,000 in consulting income.  During that time, NP Ventures received more than $1 million in 

investor funds.  

16. Play Caller Sports Gaming, LLC is a Nevada limited liability company formed on 

May 22, 2020.  Play Caller’s principal place of business is 228 Hamilton Ave., 3rd Floor, Palo Alto, 

California.  At all relevant times, Palazzo was the President, Chief Executive Officer, Secretary, and 

Treasurer of Play Caller, and through NP Ventures was also its controlling shareholder.  Play Caller 

purports to be in the business of micro-fantasy sports through a sports technology platform.  From 

May 22, 2020 to December 31, 2023, Play Caller had no significant source of income or revenue—

virtually all of its funds appeared to be investor funds or funds from Palazzo or Palazzo-affiliated 

entities.  

RELEVANT PERSONS AND ENTITIES 

17. STACK Media, Inc., incorporated in Delaware, was formed by Palazzo in 2005 to 

produce media and content for young athletes.  STACK’s principal place of business was in 

California at the time Palazzo sold substantially all of STACK’s assets to SPay in 2017.  Prior to the 

sale, Palazzo was the CEO and controlling shareholder of STACK.   

18. SPay, Inc. d/b/a Stack Sports is a Delaware corporation with a principal place of 

business in Plano, Texas.  SPay provides software and services for national governing bodies, youth 

sports leagues, clubs and associations, parents, coaches, and athletes.  SPay acquired substantially 

all of STACK’s assets in 2017. 

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19. NP Vent LLC is a California limited liability company formed on April 6, 2011.  

NP Vent’s principal place of business is 228 Hamilton Ave., 3rd Floor, Palo Alto, California.  At all 

relevant times, Palazzo was the sole shareholder of NP Vent, which was his consulting company.  

NP Vent is a different entity than NP Ventures.  Palazzo primarily used NP Vent’s bank account to 

pay personal expenses.    

20. Entity A is a private digital marketing company based in Toronto, Ontario, Canada.  

Entity A ceased operations in April 2019 and went into receivership by order of the Ontario 

Superior Court of Justice.  Entity A was STACK’s largest customer.  

21. Marketing Firm B is incorporated in Texas, with a principal place of business in 

Dallas, Texas.  Individual E co-founded Marketing Firm B in 2015 to provide sports marketing and 

management services.   

22. Consulting Company C is incorporated in Texas, with a principal place of business 

in Gilmer, Texas.  Individual E founded Consulting Company C in 2014 to raise money for a 

charitable program associated with high school football players.  Individual E currently uses 

Consulting Company C to hold his consulting business.    

23. Media Company D is incorporated in New York, with a principal place of business 

in Smithtown, New York.  Media Company D purports to be engaged in international feature film 

development, production, and the use of media rights. 

24. Individual E is a resident of Gilmer, Texas.  Individual E is the founder and owner 

of Consulting Company C, his consulting business, and a founder and 50% owner of Marketing 

Firm B, a sports marketing and management business.  Individual E and Palazzo are longtime 

friends and business associates.  

FACTUAL ALLEGATIONS 

A. Palazzo’s Past Lawsuits and Business Problems Motivated His Fraud.  

25. One of Palazzo’s key motivations for perpetrating two fraudulent schemes and 

misappropriating millions of dollars in investor funds were the lawsuits against him and associated 

legal and settlement expenses that he incurred.  As outlined below, these difficulties are relevant 

because they demonstrate Palazzo’s motive and scienter in connection with the fraudulent schemes.  

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Indeed, from 2015 through 2020, Palazzo accumulated a significant amount of debt related to 

several businesses, was involved in several lawsuits, and was terminated from his job.  Palazzo 

raised funds from investors by telling them it was for business purposes; however, he used a 

significant amount of the investor funds to pay the debts and expenses described below. 

26. In 2005, Palazzo founded STACK, a youth sports media company.  Over time, 

STACK had a number of investors and creditors that it owed money to.  By May 2017, STACK had 

more than $18.6 million in outstanding liabilities.  

27. In mid-2017, Palazzo sold substantially all of STACK’s assets to SPay for $9.5 

million.  After selling STACK, Palazzo joined SPay as its Chief Digital Officer.  During this time, 

Palazzo faced mounting difficulties because he failed to fully repay some of STACK’s investors 

and creditors and also concealed from SPay some of STACK’s liabilities, as set forth below: 

a. Between 2017 and 2019, and while he was still employed as SPay’s Chief Digital 

Officer, Palazzo failed to fully repay all of STACK’s investors and creditors after the 

SPay sale, resulting in at least two lawsuits by STACK investors against Palazzo and 

his companies for fraud and breach of contract. 

b. Palazzo also concealed from SPay the extent of STACK’s debts to Entity A.  Entity 

A was STACK’s largest customer and their substantial monetary relationship 

required both STACK and Entity A to make payments to and receive payments from 

each other.  Subsequently, Entity A went into receivership in April 2019.  Then, 

from approximately June 2019 to early November 2019, Palazzo concealed from 

SPay the fact that Entity A’s receiver was demanding money from SPay.  Indeed, 

until early November 2019, SPay’s understanding was that Entity A owed STACK 

millions of dollars.  Palazzo admitted in testimony during the SEC’s investigation of 

these events that he attempted to resolve these demands by wiring $250,000 to Entity 

A’s receiver in October 2019 without SPay’s knowledge.  Then, in November 2019, 

Entity A’s receiver contacted SPay directly, claiming that SPay owed Entity A more 

than $4 million.  SPay terminated Palazzo’s employment in April 2020.  And in July 

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2020, SPay subsequently sued Palazzo and other STACK executives for concealing 

the nature of Entity A’s relationship and misappropriating SPay’s funds. 

c. Additionally, in 2015, Palazzo, on behalf of STACK, entered into an agreement with 

Marketing Firm B, a sports management company, whereby STACK would solicit 

sponsorships and advertising for Marketing Firm B.  Under the agreement, STACK 

received a $300,000 advance and was required to generate a minimum of $600,000 

in revenue.  According to Individual E, one of Marketing Firm B’s owners, STACK 

did not generate the required revenue and was required to repay the advance, plus the 

revenue shortfall.  Palazzo testified that he made repayments to Marketing Firm B at 

least through 2019 and 2020.  SPay was not aware of this agreement or debt. 

28. Separately, by on or around October 4, 2019, Palazzo and a Palazzo-controlled entity 

were sued for fraud, breach of contract, and other legal violations related to a $1 million transaction 

that occurred in July 2019.  This lawsuit (the “2019 Civil Lawsuit”) was unrelated to SPay or the 

Corporate Defendants. 

B. Palazzo and 4TA Sports Fraudulently Raised at Least $900,000 from Investors 

by Misrepresenting that the Funds Would be Used to Repurchase STACK. 

1. Overview of the STACK Scheme. 

29. By 2019, Palazzo became unhappy with his 2017 sale of STACK and began 

negotiating with SPay to repurchase some of STACK’s assets.  (Palazzo often referred to 

repurchasing STACK’s assets as simply repurchasing STACK, and for simplicity this Complaint 

refers to it the same way.)  Palazzo formed 4TA Sports to serve as the company that would 

repurchase STACK and is the sole shareholder of 4TA Sports.  

30. Between October 2019 and March 2020, Palazzo and 4TA Sports raised at least 

$900,000 from three investors for the STACK repurchase.  Palazzo first approached two former 

Harvard football teammates (“Investor 1” and “Investor 2”) in October 2019.  He explained to each 

of them that he would use their investment to repurchase STACK.  He convinced both to invest 

after representing that he had already secured a $5 million funding commitment and presenting a 

purported funding agreement signed by Individual E on behalf of Consulting Company C.  The 

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funding agreement purported that 4TA Sports promised to pay Consulting Company C $5 million 

with interest “for value received.”  Palazzo further represented that Consulting Company C was a 

“family office,” a term used to refer to a private wealth management office established by an ultra-

high-net worth family, which lent an air of credibility, sophistication, and security to the 

investment.  Palazzo’s statements to Investors 1 and 2 were false.  Not only had Palazzo not secured 

$5 million in funding, but also, shortly after receiving $250,000 from each investor, Palazzo began 

using the money on debts and legal and personal expenses unrelated to the repurchase of STACK. 

31. After Palazzo had misappropriated almost all the $500,000 from Investors 1 and 2, 

he sought out a new victim.  In and around March 2020, he spoke with his next victim (“Investor 

3”), who owned a youth sports training center.  He convinced Investor 3 to invest $400,000, again 

claiming he had secured a $5 million funding commitment and presenting a different purported $5 

million funding agreement between 4TA Sports and Media Company D.  The funding agreement 

purported that 4TA Sports would receive $5 million in funding in March 2020.  Palazzo also 

assured Investor 3 that her funds would be used to repurchase STACK.  None of this was true.  

Indeed, shortly after receiving Investor 3’s funds, Palazzo used the funds for personal expenses and 

for legal debts and fees unrelated to repurchasing STACK.  

32. Palazzo never used investor funds for expenses associated with an attempt to 

repurchase STACK.  To the contrary, Palazzo used at least 90% of the funds on unrelated debts and 

litigation expenses, as well as personal expenses such as private school tuition and vacations.  

Ultimately, Palazzo never repurchased STACK.  The specific details of Palazzo’s STACK Scheme 

are described below. 

2. Palazzo and 4TA Sports Defrauded Two Former Harvard Football 

Players Through a Securities Offering. 

33. In October 2019, Palazzo reached out to Investors 1 and 2 seeking $250,000 from 

each of them.  He explained to both investors that he intended to use their funds for the repurchase 

of STACK.    

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a. Investor 1   

34. During the investment process, Palazzo both spoke with his friend and former 

teammate Investor 1 and sent him emails.  Palazzo, as 4TA Sports’ sole officer, proposed an 

investment opportunity to his friend.  In return for Investor 1 committing $250,000, 4TA Sports and 

Palazzo offered to provide Investor 1 with the following: (1) a $250,000 secured promissory note 

with a maturity date just two weeks after the deal (October 31, 2019) with a 6% interest rate and a 

preferred return of 10% ($25k), (2) a warrant to purchase to 62,500 shares in 4TA Sports at $.01, 

(3) a security agreement granting Investor 1 a security interest in and lien on 4TA Sports’ assets, 

and (4) a pledge agreement granting Investor 1 a first priority security interest in all of Palazzo’s 

4TA Sports stock. 

35. In an October 10, 2019 email to Investor 1, Palazzo explained that he was at the 

“finish line” in his repurchase of STACK.  He further explained that he was “about $250k short in 

the interim for these working capital true-ups, which I hadn’t planned to address until post-closing 

as is the traditional treatment.”  In this same email, Palazzo claimed that “I have the full financing 

committed ($5m) by a family office in Texas who is also an investor in [Redacted], which is one of 

the top trainers in the nation and an original advisory board member of Stack.”  In response to this 

email, Investor 1 expressed that he would like to help, but that he wanted to speak, in part, to 

understand the risk associated with the investment.  In a follow-up email, Palazzo then provided 

Investor 1 a copy of a convertible promissory note between 4TA Sports and Consulting Company C 

(the purported family office), dated September 23, 2019, which supposedly documented Consulting 

Company C’s agreement to provide $5 million to 4TA Sports.  

36. After speaking with Palazzo and accepting his representations, Investor 1 signed the 

warrant agreement and security agreement.  Palazzo executed these same documents, as well as the 

promissory note and pledge agreement, as the Chairman of 4TA Sports.  After receiving 

instructions from Palazzo, Investor 1 then wired $250,000 on October 15, 2019, to a bank account 

associated with one of Palazzo’s other entities.    

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b. Investor 2 

37. During this same period, Palazzo also reached out to Investor 2 to secure $250,000 in 

funds, again offering a promissory note, 4TA Sports warrants, a security agreement, and a pledge 

agreement in return.  In emails dated between October 10 and 11, 2019, Palazzo presented Investor 

2 with the same deal terms proposed to Investor 1.  Palazzo represented that the funds would be 

used to “clean up some of the working capital from the acquisition from 2017 to now and for me to 

repay approximately $250k of capital that they funded into Stack before the deal closes.”  Palazzo 

further represented that: “I have the financing and deal documentation completed to close on the 

acquisition of the Stack assets as soon as the family office can fund, which is expected to be next 

week, but could possibly slip into the following week.”  In response to questions from Investor 2, 

Palazzo doubled down and stated the “family office is fully committed” and “they have committed 

to fund me with the $5m regardless as to if I buy the Stack assets back.”  Palazzo also provided a 

copy of a convertible promissory note between 4TA Sports and Consulting Company C, dated 

September 23, 2019, which supposedly documented Consulting Company C’s agreement to provide 

$5 million to 4TA Sports. 

38. After Palazzo’s representations to Investor 2, Investor 2 signed the security 

agreement and warrant agreement on October 11, 2019.  Palazzo executed these same documents, 

as well as the promissory note and pledge agreement, as the Chairman of 4TA Sports.  Investor 2 

then wired $250,000 on October 15, 2019 to a 4TA Sports bank account. 

39. Palazzo’s transactions with Investors 1 and 2 constituted an offer and sale of 

securities.  Indeed, the warrants on their face warn the holder, in part, that they are securities subject 

to certain transfer restrictions under the federal securities laws.  Additionally, the secured 

promissory notes were interest-bearing notes that are defined as securities under the federal 

securities laws, and further operate as securities because (1) 4TA Sports and Palazzo were 

motivated to use the funds to finance a substantial investment, (2) a reasonable investor would have 

been motived by the profit generated, including the 6% return, (3) a reasonable member of the 

investing public would have considered the secured promissory notes securities, and (4) no risk-

reducing factor, such as an alternative regulatory regime, would make application of the securities 

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laws unnecessary.  Alternatively, the warrants and notes constitute an investment contract in which 

Investors 1 and 2 invested money and expected to receive profits from Palazzo’s efforts in 

connection with 4TA Sports and STACK.    

c. Palazzo’s Statements to Investors 1 and 2 Were False.   

40. Palazzo and 4TA Sports’ statements to Investors 1 and 2 concerning the use of 

investor funds and the $5 million in secured funding were materially false and misleading.  Palazzo 

had no intention of using the funds to “clean up” working capital or otherwise fund the STACK 

acquisition.  Palazzo also knew, or was reckless or negligent in not knowing, that he (1) had not 

secured $5 million in funds for the STACK repurchase and (2) as presented, the $5 million 

promissory note was misleading. 

41. First, as stated above, both investors wired $250,000 to Palazzo-controlled bank 

accounts on October 15, 2019, after Palazzo represented that the funds would be used for “working 

capital” issues related to the STACK repurchase.  However, that very same day, Palazzo wired the 

$250,000 he received from Investor 1 to try to resolve the demand from Entity A’s receiver.  This 

payment had nothing to do with “working capital true-ups” or repurchasing STACK.  To the 

contrary, at that time SPay had no knowledge of any possible debt owed by STACK to Entity A, 

nor had Palazzo informed SPay of any negotiations with or payments made to Entity A’s receiver.  

Thus, Palazzo did not use Investor 1’s funds to secure the STACK repurchase.  

42. Then, between October 18, 2019 and February 27, 2020, Palazzo used approximately 

$95,000 from Investor 2 to repay debts owed to Marketing Firm B, which are expenses that predate 

SPay’s acquisition of STACK, and were unknown to SPay.  Thus, there is no legitimate reason why 

Palazzo needed to make this payment prior to closing on the STACK repurchase.  Palazzo then 

spent another approximately $25,000 from Investor 2 to pay his lawyers in the 2019 Civil Lawsuit.  

Palazzo then transferred approximately $130,000 of Investor 2’s funds to a Palazzo-controlled bank 

account held in the name of NP Vent LLC (“NP Vent”), an account he primarily uses for personal 

expenses.  For example, Palazzo transferred $9,000 of Investor 2’s funds to NP Vent on or around 

November 5, 2019, and then immediately used these funds to pay his personal rent. 

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43. Palazzo’s immediate misappropriation of investor funds demonstrates that he had no 

intention of using the investments to pursue the STACK repurchase.  Further, Palazzo’s statements 

that he would use the funds to repurchase STACK were materially misleading because a reasonable 

investor would have wanted to know that Palazzo intended to use investor funds for debts, 

litigation, and personal expenses, rather than the stated business purpose.  Indeed, Investor 1 has 

stated that his funds being used to stave off litigation would have been important information for 

him to know when deciding to invest because he would have considered the investment riskier.  He 

further stated that he would have been unlikely to invest had he known that his funds would be used 

for this purpose.  

44. Second, Palazzo knew, or was reckless or negligent in not knowing, that he and 4TA 

Sports had not secured $5 million in financing for the STACK repurchase.  Palazzo represented to 

Investors 1 and 2 that the $5 million was “committed” by a “family office,” which Investor 1 

understood to mean a privately held wealth management firm of a high-net-worth family or group 

of individuals.  Palazzo then sent each investor a copy of a $5 million promissory note between 

4TA Sports and Consulting Company C.  Taken together, Palazzo’s representations about the $5 

million funding commitment from Consulting Company C portrayed the investment to Investor 1 as 

something that was sophisticated, had attracted interest from high-net-worth individuals, and was 

secured by funds from those high-net-worth individuals.  In truth it was anything but. 

45. For example, Palazzo knew that Consulting Company C was not a family office but 

rather a consulting business run by Individual E, and Palazzo also knew or was reckless or negligent 

in not knowing that Consulting Company C lacked any realistic ability to provide $5 million in 

funding.  For example, Palazzo knew that Consulting Company C was not even providing this 

funding; at best the funding (if it ever came at all) would come from another source or sources 

(potentially Media Company D) and would be routed through Consulting Company C.  Palazzo also 

knew that those other sources had not yet provided any of those funds to Consulting Company C. 

And Palazzo also knew that one of those potential funding sources, Media Company D, was the 

same source Palazzo had been trying (and failing) to get funding from for about a month.  Palazzo 

also knew that Individual E, the signatory on the $5 million promissory note, had separately been 

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trying (and failing) for several months to help Palazzo raise $1 million to help resolve the claims 

that resulted in the 2019 Civil Lawsuit, in which both he and Individual E were defendants.  Taken 

together, Palazzo knew, or was reckless or negligent in not knowing, that his written and oral 

representations to Investors 1 and 2 that he had the $5 million in financing and that it was fully 

committed, as represented by the $5 million promissory note, were misleading.  Further, these 

statements were materially misleading because a reasonable investor would have wanted to know 

that guaranteed funding had not been secured because it rendered their investment riskier.  Indeed, 

Investor 1 indicated that the existence of $5 million in committed financing was important to his 

assessment of the riskiness of the investment. 

46. At a minimum, Palazzo misled Investors 1 and 2 by representing that he had $5 

million in funding while omitting information necessary to make that statement not misleading, 

including that the funders of Consulting Company C had not yet provided the funds. 

d. Palazzo’s Deceptive “Lulling” Statements to Investor 1. 

47. Both Investors 1 and 2 were to be repaid with interest on October 31, 2019, a mere 

two weeks after providing the funds.  Knowing he would not repay the investors on time (because 

he had already stolen most of the investors’ money), Palazzo began engaging in “lulling” statements 

to Investor 1 a day before repayment was due, when he assured Investor 1 that he was “definitely 

closing everything this week.”  Then, on or around November 11, 2019, Palazzo told Investor 1: 

“All signs point to this week getting the funds back to you.”  On or around December 24, 2019, 

Palazzo told Investor 1: “Expecting to close on or before 12/31.”  On or around February 12, 2020, 

Palazzo told Investor 1: “I expect that we’ll close things out by the end of the month and be able to 

do the payback soon after.”  Approximately three months later, on or around May 29, 2020, Palazzo 

told Investor 1: “Funds are supposed to be here on Monday and then closing.”  Then, on or around 

June 16, 2020, Palazzo told Investor 1: “No funds yet but they are promising by end of this week.”  

Finally, approximately 10 months after Investor 1’s $250,000 wire, on or around August 28, 2020, 

Palazzo told Investor 1: “I expect some real movement/negotiation on the deal to happen in the next 

week or so.” 

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48. Investor 1, who was concerned, also asked Palazzo for updates on several occasions.  

On or around November 15, 2019, Investor 1 asked Palazzo if there was “any risk of running out of 

$$ while you are working to close.”  Palazzo responded: “Hey, no risk there, all good on the cash 

flow at the moment.”  Then, on or around January 13, 2020, Investor 1 asked Palazzo: “Is cash flow 

okay in the meantime?”  Palazzo responded: “Cash flow is good right now so no worries there.”   

49. Palazzo knew all of these lulling statements were false because he had already sent 

Investor 1’s funds to Entity A’s receiver.  He therefore knew that he had no intention of using the 

money to close the deal with STACK. 

50. These lulling statements were designed to prevent Investor 1 from taking any action 

to report Palazzo’s conduct, which enabled Palazzo to continue defrauding other investors in both 

the STACK and Play Caller Schemes. 

51. To this date, Palazzo has not repurchased STACK.  Palazzo has also not repaid 

Investors 1 and 2 any of the principal or interest due on their promissory notes. 

3. Palazzo Defrauded the Owner of a Youth Sports Training Center. 

52. After misappropriating almost all of Investor 1 and 2’s funds, Palazzo pitched the 

STACK investment to his next victim (“Investor 3”) via telephone in and around March 2020.  

Palazzo was introduced to Investor 3 through Individual E, who had a mutual connection in the 

sports industry.  During this period, Investor 3 and her family were in the process of building a 

youth sports training center.   

53. After being introduced, Palazzo made materially misleading statements to Investor 3 

like those made to Investors 1 and 2 to secure an investment.  During these discussions, Individual 

E both arranged and was present for phone calls between Investor 3 and Palazzo and forwarded 

emails from Palazzo to Investor 3.  In these discussions, Palazzo explained to Investor 3 that he was 

attempting to repurchase STACK and that he needed to come up with a down payment and the 

remaining funds to finalize the repurchase.  He also explained that Investor 3’s $400,000 investment 

would act as a “bridge loan” until he shortly received the $5 million in funding that Media 

Company D had already committed to provide.  Palazzo assured Investor 3 that her investment 

would be secured by a $5 million credit placement agreement that 4TA Sports had with Media 

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Company D.  During these same discussions, Palazzo also pitched that STACK would use and 

promote her training center with professional athletes.   

54. According to Investor 3, she came away from her discussions with Palazzo 

understanding that her money would be used to repurchase STACK, her investment would be 

secured by the credit placement agreement, and STACK would promote her training center.  Based 

on this understanding, Investor 3 agreed to make the investment.  Palazzo subsequently signed a 

promissory note memorializing the investment, which he asked Individual E to send to Investor 3. 

55. Investor 3’s understanding is confirmed by the deal documentation, which Palazzo 

signed as 4TA Sports’ Chairman and CEO.  The investment package provided to Investor 3 

included a promissory note and a $5 million credit placement agreement from Media Company D, 

which purported to secure the investment.  Under the terms of the promissory note, Investor 3 was 

entitled to 5% interest on her investment.  The principal and interest on the note were to be paid 

approximately one month later on April 3, 2020.  The credit placement agreement was between 

Media Company D and 4TA Sports, signed by Palazzo as the Chairman and CEO and dated January 

6, 2020.  The version of the agreement sent to Investor 3 stated that Media Company D’s funds 

would be delivered in March 2020.   

56. After accepting Palazzo’s representations, Investor 3 ultimately wired $400,000 to a 

4TA Sports bank account on and around March 6, 2020.  

57. Like the promissory notes and Warrant Agreements 4TA Sports entered into with 

Investors 1 and 2, this promissory note is a security, either in the form of a note or an investment 

contract.    

a. Palazzo Intentionally Deceived Investor 3. 

58. Palazzo and 4TA Sports’ statements to Investor 3 concerning the use of her funds 

and the $5 million in secured funding were materially false and misleading.  Palazzo had no 

intention of using the funds to repurchase STACK.  Further, Palazzo knew, or was reckless or 

negligent in not knowing, that (1) he had not secured $5 million in funds for the STACK repurchase 

and (2) as presented, the $5 million credit placement agreement was misleading. 

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59. Palazzo never intended to use Investor 3’s funds to repurchase STACK.  As stated 

above, Investor 3 wired the $400,000 on March 6, 2020, believing the funds would be used for the 

STACK repurchase.  However, that very same day, Palazzo began a series of transfers that 

eventually totaled $68,000 to the NP Vent Account, which he primarily used for personal expenses.  

Moreover, beginning that very same day and continuing into later that month, Palazzo wired a total 

of $75,000 he received from Investor 3 to repay his debt to Marketing Firm B.  Palazzo also wired 

$15,000 to pay his lawyers in the 2019 Civil Lawsuit.  Palazzo’s use of Investor 3’s funds for 

personal expenses, legal expenses, and an unrelated lawsuit are misappropriation.   

60. Then, on April 8—after Investor 3’s promissory note was due for payment—Palazzo 

wired $180,000 through three STACK bank accounts that he controlled before ultimately wiring the 

money to SPay on the same day.  Palazzo testified that this payment was a necessary part of the 

repurchase process.  But, according to an SPay representative, SPay’s controller periodically asked 

if Palazzo’s STACK unit was generating cash and, if so, to direct it to be sent to the parent 

company.  Moreover, SPay described the purpose of this $180,000 payment in a balance sheet entry 

as “a net cash payment and reduce Old Stack receivable.”  Thus, Palazzo sent this payment to SPay 

pursuant to STACK’s normal operating agreements and to lead SPay to believe that STACK was 

generating cash.  Further, during this period, SPay and Palazzo were not in active negotiations 

because SPay had paused the negotiations to investigate Palazzo’s knowledge of STACK’s 

purported debts to Entity A.  And, indeed, SPay fired Palazzo two days after this payment transfer.  

Thus, this payment had nothing to do with repurchasing STACK.   

61. Palazzo’s immediate misappropriation of Investor 3’s funds shows that he never had 

any intention of using her investment to pursue the STACK repurchase.  Further, his statements 

were materially misleading because a reasonable investor would have wanted to know that Palazzo 

intended to use investor funds for STACK’s debts and Palazzo’s personal and legal expenses; rather 

than, the stated business purpose.  Indeed, Investor 3 has stated that she would not have invested if 

she knew that Palazzo was going to use the funds for personal expenses.  

62. Moreover, Palazzo’s misappropriation here comes after he had already 

misappropriated nearly $500,000 raised from other investors.  His previous misappropriation of 

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Investor 1 and 2’s funds further demonstrates that at the time he solicited funds from Investor 3, he 

did so knowing that he planned to use the funds for his personal benefit and not to advance the 

STACK repurchase.  

63. Palazzo knew, or was reckless or negligent in not knowing, that he and 4TA Sports 

had provided a credit placement agreement to Investor 3, which would never be funded.  According 

to the agreement, 4TA Sports was supposed to receive the $5 million from Media Company D in 

March 2020.  In reality, Palazzo had entered into an identical credit placement agreement with 

Media Company D in September 2019 and was supposed to receive the funds that month.  Media 

Company D never provided the funds.  Yet, after months of not receiving the $5 million, Palazzo 

asked Media Company D’s managing director to sign a new agreement in January 2020, stating: “I 

can’t show the old agreement to my funding source. I need something recent.”  Palazzo asked the 

managing director to sign yet another new version in in late February 2020 and a follow-up letter in 

early March, prompting Palazzo to send an email stating: “Hopefully this helps us get something 

closed!”  These emails demonstrate that Palazzo knew, or was reckless or negligent in not knowing, 

that the $5 million credit placement agreement was simply a ruse to obtain money from Investor 3, 

and that there was never any true intention of the credit placement agreement actually funding.  

Indeed, the credit placement agreement that Palazzo provided to Investor 3 never funded.   

64. Taken together, Palazzo knew that his representations to Investor 3 about the $5 

million credit placement agreement were false.  Further, these statements were materially 

misleading because a reasonable investor would have wanted to know that the collateral for the 

promissory note had not been secured because it rendered their investment riskier.  Indeed, Investor 

3 has stated that she ultimately invested because the credit placement agreement convinced her that 

her investment was safe. 

65. Palazzo has not repaid Investor 3 any of the principal or interest due on her 

promissory note.  When contacted by Investor 3, Palazzo continues to claim that he does not have 

the funds to repay her.  Palazzo has never informed Investor 3 that he spent her investment on debts 

and personal and legal expenses.   

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4. Palazzo Misappropriated Investor Funds. 

66. As described above, between October 2019 and March 2020, Palazzo received 

$900,000 to repurchase STACK through promissory notes between 4TA Sports and Investors 1, 2, 

and 3.  During this same period, 4TA Sports had no source of funds other than this $900,000.  

Palazzo misappropriated nearly all $900,000, using the funds for prior debts, transfers to the NP 

Vent Account, and litigation expenses unrelated to Palazzo’s efforts to repurchase STACK.  The 

below chart breaks down the specific use of the investor funds. 

Category Amount Percentage 
Entity A settlement and payments $265,000 29.4% 
Transfers to NP Vent subsequently used for 
personal expenses 

$170,386.30 18.9% 

Transfers to NP Vent subsequently used for 
unrelated debts and litigation expenses 

$10,500 1.2% 

Payments to Marketing Firm B $170,000 18.9% 
Legal Fees for the 2019 Civil Lawsuit $55,000 6.1% 
Payments to SPay $180,000 20.0% 
Other STACK Debts $29,522 3.3% 
Subtotal of improperly used funds $880,408.30 97.8% 
Business expenses $0 0.0% 
Transfers to NP Vent subsequently used for 
potential business expenses 

$5,574.92 0.6% 

Transfers to NP Vent subsequently used for 
other expenses 

$12,641.02 1.4% 

Other expenses $826 0.1% 
Subtotal of funds not presently alleged to be 
improperly used 

$19,041.94  2.1% 

Total $899,598  

67. Because he was the person both making the statements above and misappropriating 

investor funds, Palazzo knew, or was reckless or negligent in not knowing, that his statements to 

investors were materially false and misleading.  He also knew, or was reckless or negligent in not 

knowing, that his misappropriation of funds acted, or would act, as a fraud or deceit upon these 

same investors.  Because Palazzo was the CEO and sole shareholder of 4TA Sports and acted on 

behalf of 4TA Sports when signing the notes and investment contracts discussed above, his scienter 

and negligence imputes to 4TA Sports.  Additionally, because Palazzo managed 4TA Sports on a 

day-to-day basis, negotiated the notes and investment contracts at issue, and controlled the financial 

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expenditures for 4TA Sports throughout this period, he is a control person of 4TA Sports within the 

meaning of Section 20(a) of the Exchange Act. 

68. The SEC has recently received information that, within the past three months, 

Palazzo may have re-victimized Investors 2 and 3 by inducing them to sign amendments to the 

promissory notes described above that supposedly convert the funds owed to the investors into 

equity in yet another Palazzo business venture.  Investor 1 received a similar solicitation from 

Palazzo but has not signed an amendment to his agreements with Palazzo and 4TA Sports.  When 

soliciting Investor 1 to sign these amendments, Palazzo omitted any reference to how he had 

previously used Investor 1’s funds.  That omission rendered materially misleading statements that 

Palazzo made to Investor 1 in the new solicitation, including that the new business was “an 

opportunity to reorganize and amend your current outstanding 4TA Sports Note to facilitate 

repayment and provide appropriate collateral.”  Based on the documents the SEC has presently 

obtained regarding the solicitations of Investors 2 and 3, it appears that Palazzo similarly omitted 

his misappropriation of funds when recently soliciting them, which rendered similar statements to 

them materially misleading.  The SEC is continuing to assess these new developments.  However, 

Palazzo’s misleading efforts to have investors sign amendments to their prior agreements, including 

representations that these amendments are a way for investors to obtain repayment, are part of his 

scheme to conceal from them his intentional misappropriation of their funds. 

C. Palazzo, NP Ventures, and Play Caller Fraudulently Raised Approximately $2.1 

Million from Investors by Misrepresenting that the Investments Would Fund 

the Development of a Sports Betting Application. 

1. Overview of the Play Caller Scheme. 

69. With the ink barely dry on Investor 3’s promissory note, Palazzo pivoted and formed 

NP Ventures in April 2020 and Play Caller in May 2020.  Palazzo testified that NP Ventures is an 

operating company that supports new companies created by him, including Play Caller.  At all 

relevant times, Palazzo was the CEO and majority shareholder of NP Ventures; NP Ventures was 

the majority shareholder of Play Caller; and Palazzo served as CEO of Play Caller.  Play Caller 

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purports to be a technology company focused on sports betting, fantasy sports, gaming, and 

providing data and fan engagement experiences. 

70. After forming NP Ventures and Play Caller, Palazzo commenced the Play Caller 

Scheme in September 2020.  From September 2020 until December 2023, Palazzo raised more than 

$2.1 million from at least 22 investors through Play Caller and NP Ventures, representing that 

investor funds would be used to develop and launch the Play Caller mobile application through 

which players could bet on the next play in a live sports game (the “Play Caller App”).  Instead, 

however, Palazzo misappropriated more than 75 percent of these investor funds to pay undisclosed 

debts, litigation fees, personal expenses, including vacations to Disneyland and Hilton Head Island, 

South Carolina, and consulting fees to himself.   

71. The $2.1 million raised consisted of approximately $1 million in NP Ventures 

investments from 5 investors and approximately $1.1 million in Play Caller investments from 

approximately 17 investors.  All but one investor’s investments were memorialized in convertible 

promissory notes with NP Ventures or Play Caller.  One convertible promissory note purported to 

pay 15% interest; the rest purported to pay 6% interest.  

72. The Play Caller and NP Ventures convertible promissory notes are securities.  

Indeed, most of the notes discussed below state on their face that they are securities subject to 

certain transfer restrictions under the federal securities laws.  Additionally, they are interest-bearing 

and can convert into equity securities.  Alternatively, they are also investment contracts under 

which each similarly-situated victim invested money (which was then pooled together) with the 

expectation of profits from Palazzo’s efforts.   

2. Palazzo Misappropriated Investor Money. 

73. Palazzo, through NP Ventures and Play Caller, approached at least 22 investors.  In 

many instances, Palazzo emailed and often spoke with investors using pitch decks that he drafted.  

Palazzo represented to each investor discussed below that their investment would be used to 

develop the Play Caller App.  However, in each instance, Palazzo misappropriated the 

overwhelming majority of funds for his personal use.  His specific materially misleading statements 

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concerning how investor funds would be used and his subsequent misappropriation of funds are 

detailed below.   

a. Palazzo and Play Caller Defrauded a Group of Eight Investors—Twice. 

i. The First Fraudulent Offering to the Dallas Investor Group. 

74. On or around November 11, 2020, Palazzo pitched a group of eight Dallas-area 

investors (the “Dallas Investor Group”) on a Play Caller investment through an in-person meeting 

and presentation.  According to a member of the Dallas Investor Group (“Investor 4”), Palazzo 

represented to the group that their investment funds would be used to pay software engineers 

working on the Play Caller App.  He also represented that the Play Caller App would be launching 

in January 2021, just in time for the NFL playoffs.   

75. Further, Palazzo’s presentation included a slide titled “Use of Funds.”  That slide 

stated that a $500,000 investment would allow Play Caller to (1) “Secure key data, engineering and 

management talent”; (2) “Execute against [strategic distribution] partnership to bring API to 

sportsbook market”; and (3) “Develop first ‘Free to Play’ Game in partnership with major 

telecommunications partner/s.”  Palazzo also represented that his salary would be limited to $20,833 

per month and sent a spreadsheet indicating that his salary would represent a relatively small 

portion of Play Caller’s overall expenses. 

76. After this meeting, in December 2020, the members of the Dallas Investor Group 

collectively invested $500,000 in the Play Caller offering.  Each investor’s investment was 

memorialized in a convertible promissory note with Play Caller and had a maturity date of 

December 28, 2022.  

77. After obtaining the Dallas Investor Group’s funds in December 2020, Palazzo 

wasted no time in putting them to his personal use.  Indeed, that month, Palazzo used approximately 

$19,000 of the funds to pay legal fees related to the 2019 Civil Lawsuit.  Then, in January 2021, 

Palazzo spent $235,000 of the $500,000 investment to settle the 2019 Civil Lawsuit.  Further, 

between December 2020 and March 2021, Palazzo spent approximately $54,000 to repay part of his 

outstanding debt to Marketing Firm B.  Palazzo also used approximately $21,000 of the Dallas 

Investor Group’s funds to pay a company that removes negative information from individuals’ 

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online search results.  Additionally, Palazzo transferred at least $37,000 of funds from the Dallas 

Investor Group to the NP Vent Account, which he primarily used for personal expenses.  Palazzo 

had exhausted the entire $500,000 investment by around April 6, 2021.  In total, Palazzo and Play 

Caller spent less than ten percent of the Dallas Investor Group’s funds on Play Caller’s software 

engineers and other development personnel.     

78. Thus, despite Palazzo’s representations that his salary would represent a relatively 

small portion of Play Caller’s overall expenses, he subsequently spent approximately 80% of the 

Dallas Investor Group’s funds for his personal use, as shown in the chart below.  During the period 

from December 2020 through March 2021, Play Caller had no source of funds other than the 

$500,000 from the Dallas Investment Group.  For purposes of this chart, “personal use” includes the 

consulting fees that operated as Palazzo’s salary, other personal expenses, and debts and litigation 

expenses unrelated to Play Caller. 

Month Disclosed 
Salary 

Disclosed Salary 
as % of Planned 

Expenses  

Total Funds 
Actually 

Spent 

Amount Spent 
on Personal Use 

% Spent on 
Personal 

Use  
Dec. 2020 $20,883 3.2% $93,382.06 $78,132.06 83.7% 
Jan. 2021 $20,883 8.2% $281,276.17 $265,150.00 94.3% 
Feb. 2021 $20,883 7.4% $102,172.76 $33,559.00 32.8% 
Mar. 2021 $20,883 6.8% $23,071.10 $20,700 89.7% 
Total $83,333 5.6% $499,902.09 $397,541.06 79.5% 

79. Palazzo’s statements that he intended to use the Dallas Investor Group’s funds on 

developing the Play Caller App were thus materially misleading because a reasonable investor 

would have wanted to know that their funds were not being used for their intended business 

purpose.  Indeed, Investor 4 has stated that he would not have invested if he knew Palazzo was 

using his investment on legal settlements and other personal expenses.  

ii. The Second Fraudulent Offering to the Dallas Investor Group. 

80. In December 2022, the eight notes came due, and Palazzo made lulling statements 

that not only prevented members of the Dallas Investor Group from complaining about his actions, 

but also fraudulently convinced all of them to roll their investment forward into new notes.    

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81. For instance, on or around November 8, 2022, Investor 4 emailed Palazzo ahead of 

the notes’ maturity date of December 28, 2022.  Investor 4 asked Palazzo for the Play Caller App’s 

status and Play Caller’s balance sheets and income statements.   

82. Palazzo responded the next day, attaching income statements and a balance sheet.  

The income statements showed that Play Caller had $50,966 in total expenses in each month of 

2021, with $37,781 spent on “product, technology & team expenses,” $2,000 spent on “software & 

application expenses,” and $11,175 on “other product & dev expenses.”  The balance sheet showed 

that Play Caller had $10,409 in cash and cash equivalents in October 2021 and $158,224 in cash and 

cash equivalents as of December 2021.  These statements were false. 

83. For example, the statement that Play Caller spent only $50,966 in January 2021 was 

false.  Play Caller spent $235,000 on the 2019 Civil Lawsuit alone in January 2021, and also had 

other expenses.  The statement that Play Caller spent only $50,966 in July 2021 was similarly false.  

In July 2021, Palazzo had used another Play Caller investor’s funds to pay more than $60,000 in 

rent and a security deposit for a multi-million-dollar home, currently valued at over $5 million, for 

him and his family. 

84. Additionally, Play Caller did not have cash and cash equivalents of $10,409 in 

October 2021 and $158,224 in December 2021.  According to Play Caller’s bank records, in 

October 2021, the company had a beginning balance of $10 in its bank account and an ending 

balance of $30.  In December 2021, the company had a beginning balance of $18.25 in its bank 

account and an ending balance of $19.25.  The company had similarly low funds from September 

through December 2021. 

85. As the sole signatory to the Play Caller bank account, Palazzo had full control and 

knew Play Caller’s expenditures and cash on hand.  His bald-faced falsities were an attempt to 

cover up his misappropriation of funds. 

86. Palazzo’s deception resulted in six of the investors agreeing to roll their notes 

forward another year while the other two investors rolled their notes forward to February 2023.  All 

eight extensions were memorialized in amended promissory notes executed by Palazzo, acting on 

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behalf of Play Caller.  These amended promissory notes are also securities for the same reasons as 

the original notes.  

87. Palazzo has not repaid any investors in the Dallas Investor Group any of the 

principal or interest due on their convertible promissory notes. 

b. Palazzo Defrauded a Former Professional Athlete.  

88. Having exhausted the Dallas Investor Group’s funds, Palazzo moved on to new 

targets of opportunity.  On or around June 8, 2021, Palazzo sent a Play Caller presentation to a 

former professional athlete and an employee at a venture capital firm affiliated with the athlete.  

Approximately one month later, on or around July 16, 2021, Palazzo received a $100,000 

investment in Play Caller from the venture capital firm (“Investor 5”).  This investment was 

memorialized in a convertible promissory note with Play Caller and had a maturity date of 

December 2022. 

89. In the presentation, Palazzo represented that Play Caller was “raising capital to 

execute against specific product development targets for the next 12 months to bring its proprietary 

engine and games to market through strategic partnerships.”  This was not true.  

90. To the contrary, the very day that Palazzo and Play Caller received Investor 5’s 

funds, Palazzo began transferring money from the Play Caller bank account to NP Ventures’ bank 

account.  Then, of the $85,000 in funds transferred to NP Ventures between July 16, 2021, and July 

27, 2021, Palazzo spent more than $60,000 on a security deposit and the first three months’ rent for 

his family’s new multi-million-dollar rental home.  He spent another $8,000 on moving expenses 

and $5,000 on litigation expenses unrelated to Play Caller.  Palazzo transferred the remaining 

approximately $13,000 of Investor 5’s money from a Play Caller bank account to the NP Vent 

Account.  Of those funds, Palazzo spent approximately $9,000 on rent for his previous rental home 

and $1,200 on credit card payments.   

91. In total, Palazzo spent less than $2,500 of Investor 5’s money on business expenses 

of Play Caller.  Palazzo has not repaid Investor 5 any of the principal or interest due on its 

convertible promissory note. 

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c. Palazzo Defrauded a Gaming Industry Advisory Firm. 

92. Palazzo’s misappropriation of investor funds continued unabated.  On or around 

February 28, 2022, Palazzo sent a manager of a gaming industry advisory firm a Play Caller 

presentation.  A few weeks later, on or around March 17, 2022, the gaming industry advisory firm 

(“Investor 6”) invested $100,000 in Play Caller.  Investor 6’s investment was memorialized in a 

convertible promissory note with Play Caller and had a maturity date of February 2023. 

93. In the presentation, Palazzo represented that Play Caller “plans to raise capital to 

execute specific product development goals, including integration of web3 elements, to bring its 

platform to market generating revenues through licensing and real-money competitions.”  Once 

again, this was not true.  Instead, Palazzo again misappropriated investor funds to subsidize his 

lifestyle.  

94. Indeed, shortly after receiving Investor 6’s funds, in April 2022, Palazzo spent 

approximately $10,000 at the Mandalay Bay Resort & Casino in Las Vegas and approximately 

$4,200 on airfare.  Between March 17 and April 26, 2022, he transferred more than $60,000 to the 

NP Ventures account.  He used those funds to spend $12,250 on personal rent, more than $5,000 on 

his children’s private school and daycare, and more than $20,000 on other personal expenses, 

including car payments, dental expenses, and purchases at a pool supply store.  He withdrew 

another approximately $4,200 in cash and transferred at least $8,800 to the NP Vent Account, 

which he used primarily for personal expenses.  

95. In total, Palazzo spent less than $20,000 of Investor 6’s money on Play Caller’s 

business expenses.  Palazzo has not repaid Investor 6 any of the principal or interest due on its 

convertible promissory note. 

d. Palazzo Defrauded a Navy Veteran.  

96. Unfortunately, Palazzo also targeted as one of his victims an 89-year-old who served 

in the United States Navy and other government roles before starting an investing career (“Investor 

7”).  Between December 2020 and August 2023, Investor 7 sent Palazzo and NP Ventures $500,000 

across 12 investments.  Investor 7’s investments were memorialized in convertible promissory notes 

with NP Ventures and had maturity dates between December 6, 2021, and October 31, 2023.   

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97. Palazzo testified that he told Investor 7 that his funds would be used to support the 

continued development of Play Caller.  Documents provided to Investor 7, including a presentation 

that Palazzo sent Investor 7, indicate that Palazzo solicited money from Investor 7 by referencing 

both Play Caller and STACK.  For example, in or around August 2020, Palazzo sent Investor 7 a 

document which states: “NP [Ventures] plans to raise $500,000 ($500k) in seed capital to launch.  

Funds will be used to launch the Play Caller/4TA Sports businesses and support the buyback of 

certain assets of Stack Media, my previous company, that are highly synergistic.”  Investor 7 

subsequently began investing with Palazzo, sending him $100,000 on December 7, 2020, and 

ultimately investing approximately $500,000 through a dozen notes between December 2020 and 

September 2023.  Though Investor 7 may have invested in both the Play Caller and STACK 

opportunities, Palazzo used little of Investor 7’s funds on either investment.  To the contrary, of the 

$500,000, Palazzo misappropriated at least $450,000 by, for instance, using the funds to pay for 

multiple vacations, including a trip to Disneyland.  For instance, on or around June 22, 2022, 

Investor 7 made a $100,000 investment.  Starting the next day, and continuing to around June 27, 

2022, Palazzo spent approximately $4,000 during a personal trip to Lake Tahoe.  Palazzo spent at 

least $5,000 on another personal trip to Hilton Head Island in late July 2022.  Additionally, Palazzo 

used Investor 7’s funds for various other personal expenses, including personal rent, car payments, 

credit card payments, dental expenses, sports and fitness expenses, his children’s daycare and 

private school expenses, and significant cash withdrawals.  

98. Moreover, throughout 2023, Palazzo made several “lulling” statements to Investor 7 

that were designed to both give Investor 7 a false sense of security and operated as new frauds that 

convinced Investor 7 to invest additional funds.   

99. For instance, on or around April 20, 2023, Palazzo wrote to Investor 7: “Finally, and 

please know that I am embarrassed to ask and bother you, but I wondered given the timing of the 

[new] capital coming in next month, if you would be able to help with one final $25k bridge 

investment to help us get through until their capital arrives?”  Investor 7 provided $25,000 on or 

around April 21, 2023.  Yet, there is no indication that Palazzo had new capital lined up or was 

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spending money to develop the Play Caller App.  Indeed, Palazzo received no additional capital 

until he convinced Investor 7 to provide him with another $25,000 on or around May 25, 2023.    

100. Between April and August 2023, Palazzo continued this same pattern of “lulling” 

statements followed by new fraudulent requests for additional investments.  Each time, Investor 7 

provided Palazzo and NP Ventures with more funds in exchange for a new promissory note signed 

by Palazzo on behalf of NP Ventures. 

101. In total, Palazzo and NP Ventures spent less than $55,000 of Investor 7’s funds on 

business expenses.  Palazzo has not repaid Investor 7 any of the principal or interest due on his 

convertible promissory notes.  On information and belief, Investor 7 still trusts Palazzo and despite 

the efforts of the SEC staff to reach out to him, Investor 7 is unaware that he has been defrauded. 

e. Palazzo Defrauded a Senior Care Coordinator. 

102. After years of misleading investors and misappropriating funds, Palazzo’s scheme 

was still continuing in late 2023—even after Palazzo became aware of the SEC’s investigation.  On 

or around September 28, 2023, Palazzo orally represented to a senior care coordinator that her 

investment would be used to market the launch of Play Caller.  On or around September 28, 2023, 

Palazzo received a $100,000 investment from an entity (“Investor 8”) that the senior care 

coordinator formed with a realtor.  This investment was memorialized in a convertible promissory 

note with Play Caller and has a maturity date of September 21, 2024. 

103. Palazzo did not use Investor 8’s funds for marketing Play Caller.  Indeed, Play Caller 

did not even launch a version of the App until after Palazzo exhausted Investor 8’s funds.  Instead, 

Palazzo spent approximately $46,400 at a San Francisco jeweler, another $9,500 on personal rent, 

approximately $5,000 on airfare, and more than $9,000 on other personal expenses, including a trip 

to Hilton Head Island.   

104. In total, Palazzo and Play Caller spent less than $14,000 of Investor 8’s funds on any 

business expenses.  Palazzo has not repaid Investor 8 any of the principal or interest due on its 

convertible promissory note. 

105. Each of the above statements made by Palazzo, in his capacity as CEO and Chairman 

of NP Ventures and Play Caller, were materially misleading because a reasonable investor would 

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have wanted to know that Palazzo did not intend to use their funds to develop Play Caller’s App but 

rather to fund his lavish lifestyle, legal settlements, and other personal expenses.  And, indeed, 

several of the Play Caller investors listed above have stated that they would not have invested if 

they knew their funds would be used for Palazzo’s personal expenses. 

3. Palazzo Misappropriated Play Caller Investor Funds. 

106. Between September 2020 and December 2023, Palazzo received approximately $2.1 

million to develop his Play Caller business, primarily through convertible promissory notes between 

investors and Play Caller or NP Ventures.  Play Caller and NP Ventures received a limited amount 

of non-investor funds during that time, including consulting income earned by Palazzo and 

Palazzo’s own funds.  Play Caller received approximately $125,000 from non-investor sources, 

while NP Ventures received approximately $157,000 from non-investor sources.   

107. A breakdown of how Palazzo spent the combined Play Caller and NP Ventures 

investors’ funds appears below.  For purposes of this chart, to the extent Play Caller and NP 

Ventures had non-investor sources of funds, the SEC has (favorably to the Defendants) first credited 

personal expenses against those non-investor funds, and what is shown below is how investor funds 

were used.  

NP Venture and Play Caller Use of Investor Funds 
Spending Categories Amount Percentage 
Undisclosed consulting fees to NP Vent and NP 
Ventures 

$1,094,798.85 50.6% 

Personal expenses $241,300.64 
 

11.1% 
 

Unrelated debts and litigation expenses $421,092.45 19.5% 
Subtotal of improper use of investor funds $1,757,191.94 81.2% 
Other expenses $79,030.94 3.7% 
Potential business expenses $327,914.35 15.1% 
Subtotal of use of funds not presently alleged to be 
improper 

$406,945.29 18.8% 

Total $2,164,137.23  
 

108. Even if the amounts in the chart above are offset by the $83,333 Palazzo 

misleadingly described as his salary to the Dallas Investor Group, he still misappropriated more 

than 75% of investor funds. 

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109. Because he was the person both making the statements above and misappropriating 

investor funds, Palazzo knew, or was reckless or negligent in not knowing, that his statements to 

investors were materially false and misleading.  He also knew, or was reckless or negligent in not 

knowing, that his misappropriation of funds acted, or would act, as a fraud or deceit upon these 

same investors.  Because Palazzo was the CEO and controlling shareholder of both Play Caller and 

NP Ventures, and acted on behalf of Play Caller and/or NP Ventures when signing the promissory 

notes discussed above, his scienter and negligence is imputed to Play Caller and NP Ventures.  

Additionally, because Palazzo managed both Play Caller and NP Ventures on a day-to-day basis, 

negotiated the promissory notes at issue, and controlled the financial expenditures for both Play 

Caller and NP Ventures throughout this period, he is a control person within the meaning of Section 

20(a) of the Exchange Act. 

4. Palazzo Attempted to Paper Over His Fraud Through His Substantial 

Consulting Payments and Loans to Himself. 

110. As Palazzo kicked off the Play Caller offering, in or around September 2020, 

Palazzo entered into separate consulting agreements with Play Caller and NP Ventures.  Each 

agreement was structured to pay entities controlled by Palazzo $20,000 per month in purported 

“consulting fees” (through NP Vent or NP Ventures).  Palazzo, as the Chairman and CEO of each 

entity, is the lone signatory on each agreement.  The terms of these agreements provided entities 

controlled by Palazzo total annual consulting fees of $480,000.  Between 2020 and 2023, Palazzo 

transferred approximately $1 million in investor funds to himself (through NP Vent or NP 

Ventures) pursuant to these agreements, which he used primarily for personal expenses, legal 

settlements, and litigation expenses.  In contrast, Palazzo spent less than $350,000 on developing 

the Play Caller App.  Palazzo did not disclose the consulting agreements nor the extent of his 

“compensation” to investors except for the misleading disclosures to the Dallas Investor Group 

described above in paragraphs 74-75, 77-79, and the misleading disclosure to Investor 6 and others 

discussed in paragraph 113 below.  

111. On top of consulting fees, Palazzo also paid personal expenses and unrelated debts 

and litigation expenses directly out of Play Caller and NP Ventures’ bank accounts.  Indeed, 

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Palazzo testified that he paid his personal expenses out of these bank accounts and that, on a 

monthly basis, he performed a reconciliation allocating each personal expense as either: (1) expense 

reimbursement, (2) consulting fees, or (3) loans to himself.  At the end of each year, Palazzo 

papered over his theft of investor funds by executing a note for the amount he had “loaned” himself 

during the year.  As of January 2024, there were four outstanding notes:  a $170,000 note for 2020, 

a $145,000 note for 2021, a $210,000 note for 2022, and a $184,000 note for 2023, for a total of 

$709,000.  Each note has a five-year term, and Palazzo has not made any payments of principal or 

interest under the notes back to the companies.  Again, Palazzo has acknowledged that he never 

revealed these “loans” to his investors.  

112. Even if Palazzo was entitled to some salary or consulting fees for his efforts, 

omitting that he was going to spend more than 80% of investor funds on his salary, personal 

expenses, unrelated legal settlements, and unrelated legal expenses and a mere 20% of investor 

funds on engineering and other development expenses rendered the statements he made about using 

investor funds to develop the Play Caller App materially misleading.  Further, in pitch decks to 

several investors, including to Investor 5, he made specific representations that the money would 

not only be used to build the Play Caller App, but that it would be used to execute against a list of 

specific product development targets.  However, Palazzo spent nearly all of Investor 5’s $100,000 

investment on consulting fees to entities he controlled, more than 75% of which ultimately went 

toward Palazzo’s personal rent, security deposit, and moving expenses.  Thus, Palazzo’s 

representations to Investor 5 were false and misleading.   

113. Additionally, in pitch decks to Investor 6 and two other investors not individually 

discussed in this Complaint, Palazzo disclosed projected payroll related expenses, along with 

projections for millions in revenue, profits, operating income, and expenses.  All these projections 

were built on the premise that Play Caller would be an operating company with revenue and 

expenses.  However, from May 22, 2020 to December 31, 2023, Play Caller had no significant 

source of income or revenue—virtually all of its funds appeared to be investor funds or funds from 

Palazzo or Palazzo-affiliated entities.  Thus, Palazzo omitting to tell Investor 6 and other investors 

that he intended to use approximately 80% of their investment on personal and other non-business 

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expenses and a mere 20% on operating expenses, including investment on engineering and other 

development expenses rendered his disclosures concerning payroll related expenses materially 

misleading.  

114. Nor can Palazzo claim that his consulting fees were reasonable, and investors should 

have contemplated that he would need a salary.  To the contrary, Palazzo’s representations to 

investors through, for instance, payroll projections that he provided in his pitch decks clearly 

contemplated an operating business, with a growing payroll, devoted to developing the Play Caller 

App, and not a founder using the overwhelming majority of investor money as his own personal 

slush fund, which he then used to bankroll his living expenses.  

115. For example, the pitch deck that Palazzo drafted and provided to the Dallas Investor 

Group prior to their $500,000 investment disclosed that Palazzo would receive a $250,000 salary in 

2021, representing approximately 5% of Play Caller’s planned expenditures for that year.  However, 

nowhere in the slide deck or other communications did Palazzo disclose that he would use their 

investment to settle a civil lawsuit, pay outstanding debts, and on other personal expenses.  In any 

event, he spent approximately $530,000—including approximately $400,000 from the Dallas 

Investor Group—on non-business expenses in 2021, which was not only well in excess of Palazzo’s 

disclosed $250,000 salary but represented over 75% percent of Play Caller’s actual expenses for 

2021.  

116. Given Palazzo’s repeated statements to investors that their funds would be used to 

develop the Play Caller App, his use of $1.7 million on himself or to pay debts and litigation 

expenses unrelated to Play Caller, and less than $350,000 on developing Play Caller, rendered his 

statements materially false and misleading.  The consulting agreements and loans were not 

legitimate payments for business operations, but a cover-up and part of Palazzo’s overall deliberate 

scheme to steal investor funds. 

117. The SEC has recently received information that within the past three months Palazzo 

may have sought to re-victimize numerous NP Ventures and Play Caller investors by soliciting 

them to sign amendments to the notes described above in exchange for equity in NP Ventures, 

and/or Play Caller warrants.  As with the 4TA Sports amendments discussed above, the documents 

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the SEC has received indicate that Palazzo omitted any mention of his past use of investor funds 

when soliciting these amendments, and that omission rendered materially misleading Palazzo’s 

statements to the investors such as “I will also be personally guaranteeing any outstanding 

promissory notes in NP Ventures. it is important that I do all I can to help each investor earn a 

strong return, while also providing additional security for the notes, especially because we had 

hoped to pay them back already.”  As with the recent solicitations of the 4TA Sports investors, the 

SEC is continuing to assess these new developments.  However, Palazzo’s misleading efforts to 

have investors sign amendments to their prior agreements, including representations that these 

amendments are a way for investors to obtain repayment, are part of his scheme to conceal from 

them his intentional misappropriation of their funds. 

118. In total, across both the STACK Scheme and the Play Caller Scheme, Palazzo, 

through the Corporate Defendants, received approximately $3,065,000 in investor funds between 

October 2019 and December 2023.  Palazzo has spent more than $1 million on consulting fees to 

himself.  He has spent another $1.1 million on unrelated past business debts and litigation expenses 

and $400,000 on personal expenses beyond the consulting fees to himself.  This misappropriation of 

investor funds, combined with how Palazzo often misappropriated investor funds immediately after 

receiving them, demonstrates that these schemes were not legitimate businesses that failed, but 

intentional schemes by which Palazzo sought to defraud people, including his friends, in order to 

enrich himself.  

CLAIMS FOR RELIEF 

FIRST CLAIM FOR RELIEF 

Violations of Exchange Act Section 10(b) and Rule 10b-5 thereunder 

(All Defendants) 

119. The SEC re-alleges and incorporates by reference each allegation in paragraphs 1 

through 118 above.  

120. As set forth above, the Defendants engaged in two fraudulent schemes—the STACK 

and Play Caller Schemes—by misappropriating investor money intended for business purposes for 

Palazzo’s own enrichment.  Specifically, Palazzo spent the overwhelming majority of investors’ 

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money on personal expenses such as rent for a multi-million-dollar home, private school tuition, 

jewelry, and a Disney vacation as well as on undisclosed debts, litigation fees, and other expenses 

unrelated to the business ventures for which he had solicited the investments.  Palazzo then engaged 

in fraudulent “lulling” statements, which in some instances were designed to prevent and did 

prevent investors from reporting Palazzo for his conduct and in other instances were designed to 

and did induce some investors to invest more funds or agree to roll over promissory notes. 

121. As set forth above, Defendants made material misstatements and omitted material 

facts necessary to make other statements not misleading to investors concerning the Corporate 

Defendants’ financing and use of investor funds.  In the STACK Scheme, Palazzo represented to 

Investors 1, 2, and 3 that he had obtained, or would shortly obtain, $5 million in funding.  However, 

Palazzo knew, or was reckless in not knowing, that he had not secured or would not shortly secure 

$5 million in funding.  Second, in both the STACK and Play Caller Schemes he represented that 

investor funds would be used for business purposes when he knew he intended to, and subsequently 

did, use the overwhelming majority of funds for his personal benefit.  

122. Further, because Palazzo was the CEO and controlling shareholder of 4TA Sports, 

NP Ventures, and Play Caller, and acted on behalf of 4TA Sports, NP Ventures, and Play Caller 

when making the materially misleading statements and signing the promissory notes and 

agreements, his scienter is imputed to 4TA Sports, NP Ventures, and Play Caller.  

123. By engaging in the acts and conduct alleged in this Complaint, the Defendants 

directly or indirectly, by the use of the means and instrumentalities of interstate commerce or of the 

mails, in connection with the purchase or sale of securities, with scienter: (a) employed devices, 

schemes, or artifices to defraud, (b) made untrue statements of a material fact or omitted to state a 

material fact necessary in order to make the statements made, in light of the circumstances under 

which they were made, not misleading; and (c) engaged in acts, practices, or courses of business 

which operated or would operate as a fraud or deceit upon other persons. 

124. By engaging in the foregoing conduct, Defendants violated, and unless restrained 

and enjoined will continue to violate, 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. 

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SECOND CLAIM FOR RELIEF 

Violations of Section 17(a)  

(All Defendants) 

125. The SEC realleges and incorporates by reference each allegation in paragraphs 1 

through 118 above. 

126. As set forth above, the Defendants engaged in two fraudulent schemes—the STACK 

and Play Caller Schemes—to defraud by misappropriating investor money intended for business 

purposes for Palazzo’s own enrichment.  Specifically, Palazzo spent the overwhelming majority of 

investors’ money on personal expenses such as rent for a multi-million-dollar home, private school 

tuition, jewelry, and a Disney vacation as well as on undisclosed debts, litigation fees, and other 

expenses unrelated to the business ventures for which he had solicited the investments.  Palazzo 

then engaged in fraudulent “lulling” statements, which in some instances were designed to prevent 

and did prevent investors from reporting Palazzo for his conduct and in other instances were 

designed to and did induce some investors to invest more funds or agree to rollover promissory 

notes. 

127. As set forth above, Defendants made material misstatements and omitted material 

facts necessary to make other statements not misleading to investors concerning the Corporate 

Defendants’ financing and use of investor funds.  In the STACK Scheme, Palazzo represented to 

Investors 1, 2, and 3 that he had obtained, or would shortly obtain, $5 million in funding.  However, 

Palazzo knew, or was reckless or negligent in not knowing, that he had not secured or would not 

shortly secure $5 million in funding.  Second, in both the STACK and Play Caller Schemes he 

represented that investor funds would be used for business purposes when he instead used the 

overwhelming majority of funds for his personal benefit.  

128. Further, because Palazzo was the CEO and controlling shareholder of 4TA Sports, 

NP Ventures, and Play Caller, and acted on behalf of 4TA Sports, NP Ventures, and Play Caller 

when making the materially misleading statements and signing the promissory notes and 

agreements, his scienter and negligence are imputed to 4TA Sports, NP Ventures, and Play Caller.  

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

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

communication in interstate commerce or by use of the mails directly or indirectly: (a) employed 

devices, schemes, or artifices to defraud; (b) obtained money or property by means of untrue 

statements of a material fact or by omitting to state a material fact necessary in order to make the 

statements made, in light of the circumstances under which they were made, not misleading; and (c) 

engaged in transactions, practices, or courses of business which operated or would operate as a 

fraud or deceit upon the purchaser of the securities offered or sold by the Defendants. 

130. By engaging in the foregoing conduct, Defendants violated, and unless restrained 

and enjoined will continue to violate, Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a). 

THIRD CLAIM FOR RELIEF 

Control Person Violations of Exchange Act Section 10(b) and Rule 10b-5 thereunder, 

pursuant to Exchange Act Section 20(a) 

(Defendant Palazzo) 

131. The SEC realleges and incorporates by reference each allegation in paragraphs 1 

through 118 above. 

132. At all relevant times, Defendant Palazzo was a control person of Defendants 4TA 

Sports, NP Ventures, and Play Caller, because he possessed, directly or indirectly, and exercised 

actual control over the operations of 4TA Sports, NP Ventures, and Play Caller. 

133. Specifically, because Palazzo was the CEO and controlling shareholder, managed 

4TA Sports on a day-to-day basis, negotiated the notes and investment contracts at issue, and 

controlled the financial expenditures for 4TA Sports throughout this period, he is thus a control 

person within the meaning of Section 20(a) of the Exchange Act. 

134. Additionally, because Palazzo was the CEO and controlling shareholder of both Play 

Caller and NP Ventures, managed both Play Caller and NP Ventures on a day-to-day basis, 

negotiated the promissory notes at issue, and controlled the financial expenditures for both Play 

Caller and NP Ventures throughout this period, he is thus a control person within the meaning of 

Section 20(a) of the Exchange Act. 

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135. Palazzo did not act in good faith when he made materially misleading statements to 

investors and misappropriated investor funds, which he spent on personal expenses such as rent for 

a multi-million-dollar home, private school tuition, jewelry, and a Disney vacation as well as on 

undisclosed debts, litigation fees, and other expenses unrelated to the business ventures for which 

he had solicited the investments.  To the contrary, because he was the person both making the 

statements above and misappropriating investor funds, Palazzo knew, or was reckless in not 

knowing, that his statements to investors were materially false and misleading.  He also knew, or 

was reckless in not knowing, that his misappropriation of funds acted, or would act, as a fraud or 

deceit upon these same investors 

136. Accordingly, pursuant to Exchange Act Section 20(a), Palazzo is liable to the SEC to 

the same extent as 4TA Sports, NP Ventures, and Play Caller are liable for their respective 

violations of Exchange Act Section 10(b) and Rule 10b-5 thereunder. 

PRAYER FOR RELIEF 

WHEREFORE, the SEC respectfully requests that this Court enter a Final Judgment:  

I. 

Finding that Defendants violated the provisions of the federal securities laws as alleged 

herein;  

II. 

Injunction 

In forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure, permanently 

enjoining Defendants Palazzo, 4TA Sports, NP Ventures, Play Caller and their officers, agents, 

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

them, who receive actual notice of the judgment by personal service or otherwise, and each of them, 

from violating Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], and 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]; 

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III. 

Conduct Based Injunction against Palazzo 

 Permanently enjoining Palazzo from directly or indirectly, including, but not limited to, 

through any entity owned or controlled by Palazzo, participating in the issuance, purchase, offer, or 

sale of any securities, provided, however, that such injunction shall not prevent him from 

purchasing or selling securities for his own personal account; 

IV. 

Disgorgement and Prejudgment Interest  

Ordering Defendants to disgorge on a joint and several basis, and with prejudgment interest, 

the ill-gotten gains and/or unjust enrichment they received directly or indirectly as a result of the 

violations alleged here and to pay prejudgment interest thereon pursuant to Exchange Act Sections 

21(d)(3), 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; 

V. 

Civil Penalty 

Ordering Defendants to pay civil monetary penalties pursuant to 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)]; 

VI. 

Officer and Director Bar 

Ordering, in accordance with Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)], 

that Palazzo is prohibited from acting as an officer or director of any issuer that has a class of 

securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 781], or that is 

required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)]; 

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VII. 

Further Relief 

Granting such other and further relief as the Court may deem just, equitable, or necessary in 

connection with the enforcement of the federal securities laws and for the protection of investors; 

and 

VIII. 

Retaining Jurisdiction 

Retaining jurisdiction of this action for purposes of enforcing any final judgments and 

orders. 

JURY DEMAND 

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff demands that this case 

be tried before a jury.  

 

Respectfully submitted, 

Date: September 20, 2024  /s/ Carina A. Cuellar______                                    

       Carina A. Cuellar  
Lauren B. Poper  
Brittany K. Frassetto  
Attorneys for Plaintiff 

        
 
Of Counsel 
Christopher Bruckmann 
 
 

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