SEC v. JOHN DOE, No. 1:19-cv-852, District of Columbia (Mar. 26, 2019)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

U.S. Securities and Exchange Commission,
100 F Street, N.E.
Washington, DC 20549

Applicant,

u

James K. McKillop,

Los Angeles, CA
(310) 888-1870

Defendant.

~tECE~'VE D
MAR 2 6 ~O~g

Clerk, U.S. Dlstrlct &Bankruptcy
Courts for the District of Cofiimpia .

Case: 1:19-mc-00043
Assigned To :Walton, Reggie B.
Assign. Date :3/26/2019
Description: Misc.

APPLICATION OF THE SECURITIES AND EXCHANGE COMMISSION FOR AN

ORDER UNDER SECTION 21(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934

ENFORCING COMPLIANCE WITH ADMINISTRATIVE ORDER

Applicant Securities and Exchange Commission ("SEC" or "Commission") hereby

applies to the Court for an order pursuant to Section 21(e)(1) of the Securities Exchange Act of

1934 ("Exchange Act"), 15 U.S.C. § 78u(e)(1), requiring compliance by Respondent, James K.

McKillop ("McKillop"), from Los Angeles, California, with a final SEC administrative order

entered against hiin on December 12, 2000.

In support, the Commission states as follows:

INTRODUCTION AND SUMMARY

1. By this Application the Commission seeks to enforce its order entered December

12, 2000, entitled In the Matter of Jan~.es K McKillop d/b/a 13KL BrokerLink Capital Research

and Communications, Exchange Act Release No. 43712 (hereafter, the "2000 Order"). A copy

of the 2000 Order is attached as Exhibit 1.

1



 

2. The 2000 Order, in part, found that McKillop engaged in the business of effecting

interstate transactions in connection with the sale of stocks in public shells for the accounts of

others for compensation in the form of stock and/or cash. Specifically, the 2000 Order found

that McKillop assisted in the sale of twenty-one public shell companies from at least January

1999 and continuing in 2000 by, among other things, bringing purchasers and sellers together,

screening potential purchasers, meeting with potential purchasers, helping negotiate fees, and

acting as an intermediary.

3. In the 2000 Order, the Commission, pursuant to Sections 15(b)(4) and 21 C of the

Exchange Act, censured McKillop, and ordered him to cease and desist from committing or

causing any violation or future violation of Section 15(a) of the Exchange Act.

4. McKillop violated the 2000 Order by acting as an unregistered broker in violation

of Section 15(a) of the Exchange Act.

PARTIES

5. The Commission is an agency of the United States Government.. The

Coininission's principal office is located at 100 F Street, N.E., Washington, DC 20549.

6. James K. McKillop, age 59, resides in Los Angeles, California. In 1994,

McKillop (then known as James Maserati) pled guilty to one count of conspiracy to commit mail

fraud related to a debt consolidation solicitation fraud. ~

OTHER RELEVANT PERSONS

7. Tiber Creek Corp. ("Tiber Creek"), a Delaware corporation with its principal

place of business in Beverly Hills, California, assists companies in going public. Tiber Creek

has never been registered with the Commission in any capacity.

'U.S. v. James Maserati, 2:94-cr-809 (C.D. Cal. 1994).



 

JURISDICTION AND VENUE

8. This Court has jurisdiction over this action pursuant to Sections 21(e) and 27(a) of

the Exchange Act, 15 U.S.C. §§ '78u(e)(1) and 78aa(a).

9. Venue lies in this Court pursuant to Section 27 of the Exchange Act, 15 U.S.C. §

78aa, because certain of the acts and transactions alleged in this Complaint occurred within the

District of Columbia and were effected, directly or indirectly, by making the use of means or

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

example, filings for public shells of which McKillop was a director, officer, and fifty per cent

shareholder were electronically filed with the Commission, which is headquartered in the District

of Columbia.

10. McKillop, directly and indirectly, made use of the mails and of the means and

instrumentalities of interstate commerce in connection with the acts, practices, and courses of

business described in this Complaint.

THE COMMISSION'S 2000 ORDER

11. On December 12, 2000, the Commission issued the 2000 Order under the

Exchange Act and rules thereunder. Specifically, the 2000 Order was instituted against

McKillop as the Respondent, with his consent, pursuant to Sections 15(b)(4) and 21C of the

Exchange Act, 15 U.S.C. §§ 78o(b)(4) and 78u-3.

12. The 2000 Order;in part, found:

a. McKillop, from Los Angeles, California, was the sole owner of BKL

BrokerLink Capital Research and Communications. Ex. 1 ¶ A.

b. From at least January 1999 and continuing in 2000, McKillop assisted in the

sale of twenty-one public shell companies, not only bringing purchasers and

3



sellers together, but also screening potential purchasers, meeting with

potential purchasers, helping negotiate fees, and generally acting as an

intermediary. Ex. 1 ¶ D.

c. McKillop solicited purchasers of shell companies through an Internet website,

www.bkl.coin, The Wall Street Journal, and other media. The website, which

McKillop drafted, stated that BKL BrokerLink "primarily assists) companies

in going public quickly via a merger with a public shell." The website offered

advice regarding alternative methods for privately held companies to become

public, including merging with an existing shell company. The website

instructed potential purchasers to send McKillop an executive summary or

business plan or to fill out a questionnaire provided on the website. After

screening potential purchasers, McKillop referred theirs to a securities lawyer

who created public shells for this purpose. Most of the shells were Delaware

corporations with 5,000,000 shares issued and outstanding, with no operating

histories, no liabilities and no material assets. McKillop negotiated the prices

offered for some of the public shells. McKillop earned one third of the first

$100,000 in fees and one half of all amounts over $100,000. Ex. 1 ¶ E.

13. The Commission, deeming remedial sanctions to be "appropriate and in the public

interest," ordered that "[p]ursuant to Section 21 C of the Exchange Act, [McKillop] cease and

desist from committing or causing any violation or future violation of Section 15(a) of the

Exchange Act ..." Ex. 1 ¶ IILB.

14. The 2000 Order remains in effect.

4



 

 

MCHILLOP'S VIOLATION OF THE 2000 ORDER

15. Since at least July 2012, Tiber Creek Corp. ("Tiber Creek") was a business

operated by McKillop and his business associate James M. Cassidy that assisted private

companies in going public. As part of that business, Tiber Creek created and maintained an

inventory of corporations, for which McKillop and Cassidy served as the officers, directors, and

fifty percent shareholders. Tiber Creek registered those corporations with the Commission and

thereby created public shell companies. Tiber Creek, through McKillop, solicited private

operating companies and charged them a fee for providing services that, in most instances,

resulted in the private company gaining control of one of Tiber Creek's public shells. In these

instances, Tiber Creek customers often were able to take their private companies public without

conducting a traditional initial public offering. Since July 2012, McKillop, along with Cassidy

and Tiber Creek, effected securities transactions for more than one hundred public shell

companies.

16. Tiber Creek was created to provide services to assist private companies in going

public. As part of the services it offered, Tiber Creek, by and through McKillop, created and

maintained an inventory of public shell companies that it made available to its customers.

McKillop, on behalf of Tiber Creek, solicited potential customers through an advertising

program including search engine optimization and ads, a collection of websites,2 videos, written

solicitations, classified advertisements, and a paid referral network.

17. To engage Tiber Creek, and take advantage of its services, private operating

companies paid aper-transaction fee. In exchange for this fee, McKillop and Cassidy effected

securities transactions between one of its public shells and the private operating company, in a

2 Tiber Creek owned and maintained numerous websites, such as publicshell-publicshells.com, that solicited contact

information which Tiber Creek used for sales leads.



process referred to by Tiber Creek as a transfer of control. Tiber Creek's fee, usually $100,000,

was not eligible for payment, under its standard agreement, unless it completed the transfer of a

public shell to a customer.

18. McKillop's compensation was drawn exclusively from the proceeds of Tiber

Creek. When McKillop redeemed his shares in the public shell during the sale transaction, he

received no consideration except for the customer's fee paid to Tiber Creek.

19. Tiber Creek provided certain advice as to the merits of potential customers'

investment in a public shell. For example, it was routinely recommended to Tiber Creek

customers that they recapitalize as Delaware public reporting shells and recommended that

customers issue themselves five million shares of the public shell to maintain a minimum share

price. McKillop, on behalf of Tiber Creek, discussed with customers their respective needs, such

as. anticipated accounting and investor relation services. McKillop did not perform any

substantial duties on behalf of any particular public shell. His position with the public shells was

exclusively in connection with services rendered by Tiber Creek.

20. After the customer took control of the public shell, Tiber Creek, for at least

certain clients, provided investor relations services and introductions to investment bankers and

broker-dealers. Tiber Creek assisted customers with, among other things, filing registration

statements, obtaining and preparing filings for a market maker, and fulfilling other financial

reporting requirements to comply with rules established by the Commission and the Public

Company Accounting Oversight Board.

21. During this time, McKillop was not, and is not currently, registered with the

Commission as a broker or in any other capacity.

6



CLAIM FOR RELIEF

22. The Commission re-alleges and restates paragraphs 1 through 21 above.

23. The S$C brings this Application pursuant to authority conferred on it by Sections

21(d)(5) and 21(e)(1) of the Exchange Act [15 U.S.C. §§ 78u(d)(5) and 78u(e)(1)]. In particular,

Section 21(e)(1) of the Exchange Act provides that, upon application of the Commission, the

district courts of the United States shall have jurisdiction to issue writs of mandamus,

injunctions, and orders commanding any person to comply with the provisions of the Exchange

Act and the rules and regulations thereunder, and with Commission administrative orders

instituted pursuant to the Exchange Act. "Section 21(e) of the Exchange Act expressly permits

the Commission to seek enforcement of its orders by making application to the district court."

SEC v. McCarthy, 322 F.3d 650, 655 (9th Cir. 2003) (citing 15 U.S.C. § 78u(e)); see also SEC v.

Vittor, 323 F.3d 930, 935 (11th Cir. 2003) (same).

24. Section 21(e) authorizes summary proceedings "`without formal pleadings, on

short notice, without summons and complaints, generally on affidavits, and sometimes even ex

pane,"' McCarthy, 322 F.3d at 655 (quoting New Hampshire Fire Ins. Co. v. Scanlon, 362 U.S.

404, 406-07 (1960)), because, "[b]y the time a § 21(e) application is filed by the Commission,

the time and opportunity for adjudicating the merits of the claim have been exhausted; all that is

left to do is enforce the order," id. at 658; see also SEC v. Gerasimowicz, 9 F. Supp. 3d 378, 381

(S.D.N.Y. 2014) (".[L]itigants are precluded from challenging the validity of SEC orders in

enforcement proceedings initiated pursuant to ...Section 21(e)(1) of the Exchange Act."); SEC

v. Securities Inv'r Protection Corp., 842 F. Supp. 2d 321, 326 (D.D.C. 2012) (following holding

in McCarthy "that Congress' use of the word ̀application' in Section 21(e) of the Securities

Exchange Act permitted the use of summary proceedings to enforce an order of the



Commission")

25. McKillop's Consent to the entry of an order in this proceeding is attached as

Exhibit 2.

26. A Proposed Order is attached as Exhibit 3.

WHEREFORE, the Commission respectfully requests that the Court:

(A) Enter an Order under Section 21(e) of the Exchange Act, in the form submitted,

directing McKillop to comply with the Final Order; and

(B) Retain jurisdiction over this matter for the purpose of enforcing the Order.

Dated: March 26, 2019 Respectfully Submitted,

l

Cheryl mpton

D.C. Bar No. 483776

Tel: (202) 551-4459

E-mail: [email protected]

Kevin Guerrero
AZ Bar No. 023673

Tel: (202) 551-4401

E-mail: [email protected]

Matthew Reilly

New York Bar No. 5130935

Tel: (202) 551-5478

E-mail: reill}[email protected]

Division of Enforcement

U.S. Securities and Exchange

Commission
100 F Street, N.E.

Washington, DC 20549

Fax: (202) 772-9292

0





 

UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION

ATTESTATION

IT IS HEREBY ATTESTED THAT:

Attached is a copy of ORDER INSTITUTING PROCEEDINGS PURSUANT

TO SECTIONS 15(b)(4) AND 21 C OF THE SECURITIES EXCHANGE

ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL

SANCTIONS AND ACEASE-AND-DESIST ORDER, dated December 12,

2000, in the matter of James K. McKillop d/b/a BKL BrokerLink Capital

Research and Communications, Administrative Proceeding File No. 3-10385.

This certified document was produced from the files of this Commission on

11/15/2018

Date

It is hereby certified that the Secretary of the U.S. Securities and

Exchange Commission, Washington, DC, which

Commission was created by the Securities Exchange Act of

1934 (15 U.S.C. 78a et seq.) is official custodian of the records

and files of said Commission and was such official custodian at

the time of executing the above attestation.

For the Commission

l,=r~ l~ .
Sec tary

SEC 334 (9-12)



 

Home ~ Previous Page

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 43712 /December 12, 2000

ADMINISTRATIVE PROCEEDING
File No. 3-10385

In the Matter of

James K. McKillop d/b/a
BKL BrokerLink Capital Research
and
Communications

Respondent.

ORDER INSTITUTING PROCEEDINGS
PURSUANT TO SECTIONS 15(b)(4) AND
21C OF THE SECURITIES EXCHANGE
ACT OF 1934, MAKING FINDINGS, AND
IMPOSING REMEDIAL SANCTIONS AND
A CEASE-AND-DESIST ORDER

I.

The Securities and Exchange Commission ("Commission") deems it

appropriate and in the public interest that public administrative and cease-

and-desist proceedings be instituted pursuant to Sections 15(b)(4) and 21C

of the Securities Exchange Act of 1934 ("Exchange Act") against James K.

McKillop d/b/a BKL BrokerLink Capital Research and Communications

("Respondent").

In anticipation of the institution of these administrative proceedings,

Respondent has submitted an Offer of Settlement ("Offer"), which the

Commission has accepted. Solely for the purposes of these proceedings and

any other proceedings brought by or on behalf of the Commission or in

which the Commission is a party, and without admitting or denying the

findings herein, except for the jurisdiction of the Commission over him and

over the subject matter of these proceedings, which are admitted,
Respondent has consented to the entry of the findings and the imposition of

the remedial sanctions and cease-and-desist order as set forth below.

II.

On the basis of this Order and the Offer submitted by Respondent, the

Commission makes the following findings:

A. James K. McKillop ("Mckillop") d/b/a/ BKL BrokerLink Capital Research

and Communications ("BKL BrokerLink"), age 41, of Los Angeles, California,

is the sole owner of BKL BrokerLink. McKillop was associated with a broker-

dealer far fifteen months from approximately 1984 to 1986.

B. BKL BrakerLink is an investment banking and public relations consulting

firm. It derives over 90 percent of its income from introducing private

companies to a securities lawyer who takes the companies public via a

reverse merger with a public shell.



C. Respondent engaged in the business of effecting interstate transactions

in connection with the sale of stocks in public shells for the accounts of

others for compensation in the form of stock and/or cash.

D. From at least January 1999 and continuing in 2000, Respondent assisted
in the sale of twenty-one public shell companies, earning approximately

$992,000 plus 125,000 shares of stock. Respondent not only brought,

purchasers and sellers together, he also screened potential purchasers, met

with potential purchasers, helped negotiate fees and generally acted as an

intermediary.

E. Respondent solicited purchasers of shell companies through an Internet

website, www.bkl.com, The Wall Street Journal, and other media. The

website, which Respondent drafted, stated that BKL BrokerLink "primarily

assists) companies in going public quickly via a merger with a public shell."

The website offered advice regarding alternative methods for privately held

companies to become public, including merging with an existing shell

company. The website instructed potential purchasers to send Respondent

an executive summary or business plan or to fill out a questionnaire

provided on the website. After screening potential purchasers, Respondent

referred them to a securities lawyer who created public shells for this

purpose. Most of the shells were Delaware corporations with 5,000,000

shares issued and outstanding, with no operating histories, no liabilities and

no material assets. Respondent negotiated the prices offered for some of

the public shells, ranging from approximately $100,000 to $250,000, plus

attorneys fees. Respondent earned one third of the first $100,000 in fees

and one ha►f of all amounts over $100,000.

F. Section 15(a) of the Exchange Act requires that any person or entity
engaged in the interstate business of effecting securities transactions for
the accounts of others must register with the Commission as a broker or
dealer or, if a natural person, be associated with an entity that is registered
with the Commission as a broker or dealer. By virtue of the conduct
described above, Respondent willfully violated Section 15(a) of the
Exchange Act.

III.

In view of the foregoing, the Commission deems it appropriate and in the
public interest to accept the Offer submitted by Respondent and to impose
the sanctions specified therein.

Accordingly, IT IS ORDERED that:

A. Pursuant to Section 15(b)(4) of the Exchange Act, Respondent be
censured;

B. Pursuant to Section 21C of the Exchange Act, Respondent cease and
desist from committing or causing any violation or future violation of
Section 15(a) of the Exchange Act; and

C. Pursuant to Section 21B and Section 15(b)(4) of the Exchange Act,
within thirty (30) days of the entry of this Order, Respondent shall .pay a
civil money penalty in the amount of $10,000 to the United States Treasury.
Such payment shall be: (1) made by United States postal money order,
certified check, bank cashier's check or bank money order; (2) made
payable to the Securities and Exchange Commission; (3) hand-delivered or
mailed to the Office of the Comptroller, U.S. Securities and Exchange
Commission, Operations Center, 6432 General Green Way, Stop 0-3,
Alexandria, VA 22312; and (4) submitted under cover letter which identifies
James K. McKillop d/b/a BKL BrokerLink Capital Research and
Communications as the Respondent in this proceeding, the file number of



the proceeding, a copy of which cover letter and money order or check shall
be sent to Donald M. Hoerl, Associate Regional Director, Securities and
Exchange Commission, Central Regional OfFice, 1801 California Street,
Suite 4800, Denver, Colorado 80202.

By the Commission.

Jonathan G. Katz
Secretary

http://www.sec.gov/litigation/admin/34-43712. htm

Home ~ Previous Page Modified:l2/15/2000

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

U.S. Securities and Exchange Commission,
100 F Street, N.E.
Washington, DC 20549

Applicant,

u

James K. McKillop,

Los Angeles, CA
(310) 888-1870

Defendant.

~tECE~'VE D
MAR 2 6 ~O~g

Clerk, U.S. Dlstrlct &Bankruptcy
Courts for the District of Cofiimpia .

Case: 1:19-mc-00043
Assigned To :Walton, Reggie B.
Assign. Date :3/26/2019
Description: Misc.

APPLICATION OF THE SECURITIES AND EXCHANGE COMMISSION FOR AN

ORDER UNDER SECTION 21(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934

ENFORCING COMPLIANCE WITH ADMINISTRATIVE ORDER

Applicant Securities and Exchange Commission ("SEC" or "Commission") hereby

applies to the Court for an order pursuant to Section 21(e)(1) of the Securities Exchange Act of

1934 ("Exchange Act"), 15 U.S.C. § 78u(e)(1), requiring compliance by Respondent, James K.

McKillop ("McKillop"), from Los Angeles, California, with a final SEC administrative order

entered against hiin on December 12, 2000.

In support, the Commission states as follows:

INTRODUCTION AND SUMMARY

1. By this Application the Commission seeks to enforce its order entered December

12, 2000, entitled In the Matter of Jan~.es K McKillop d/b/a 13KL BrokerLink Capital Research

and Communications, Exchange Act Release No. 43712 (hereafter, the "2000 Order"). A copy

of the 2000 Order is attached as Exhibit 1.

1



 

2. The 2000 Order, in part, found that McKillop engaged in the business of effecting

interstate transactions in connection with the sale of stocks in public shells for the accounts of

others for compensation in the form of stock and/or cash. Specifically, the 2000 Order found

that McKillop assisted in the sale of twenty-one public shell companies from at least January

1999 and continuing in 2000 by, among other things, bringing purchasers and sellers together,

screening potential purchasers, meeting with potential purchasers, helping negotiate fees, and

acting as an intermediary.

3. In the 2000 Order, the Commission, pursuant to Sections 15(b)(4) and 21 C of the

Exchange Act, censured McKillop, and ordered him to cease and desist from committing or

causing any violation or future violation of Section 15(a) of the Exchange Act.

4. McKillop violated the 2000 Order by acting as an unregistered broker in violation

of Section 15(a) of the Exchange Act.

PARTIES

5. The Commission is an agency of the United States Government.. The

Coininission's principal office is located at 100 F Street, N.E., Washington, DC 20549.

6. James K. McKillop, age 59, resides in Los Angeles, California. In 1994,

McKillop (then known as James Maserati) pled guilty to one count of conspiracy to commit mail

fraud related to a debt consolidation solicitation fraud. ~

OTHER RELEVANT PERSONS

7. Tiber Creek Corp. ("Tiber Creek"), a Delaware corporation with its principal

place of business in Beverly Hills, California, assists companies in going public. Tiber Creek

has never been registered with the Commission in any capacity.

'U.S. v. James Maserati, 2:94-cr-809 (C.D. Cal. 1994).



 

JURISDICTION AND VENUE

8. This Court has jurisdiction over this action pursuant to Sections 21(e) and 27(a) of

the Exchange Act, 15 U.S.C. §§ '78u(e)(1) and 78aa(a).

9. Venue lies in this Court pursuant to Section 27 of the Exchange Act, 15 U.S.C. §

78aa, because certain of the acts and transactions alleged in this Complaint occurred within the

District of Columbia and were effected, directly or indirectly, by making the use of means or

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

example, filings for public shells of which McKillop was a director, officer, and fifty per cent

shareholder were electronically filed with the Commission, which is headquartered in the District

of Columbia.

10. McKillop, directly and indirectly, made use of the mails and of the means and

instrumentalities of interstate commerce in connection with the acts, practices, and courses of

business described in this Complaint.

THE COMMISSION'S 2000 ORDER

11. On December 12, 2000, the Commission issued the 2000 Order under the

Exchange Act and rules thereunder. Specifically, the 2000 Order was instituted against

McKillop as the Respondent, with his consent, pursuant to Sections 15(b)(4) and 21C of the

Exchange Act, 15 U.S.C. §§ 78o(b)(4) and 78u-3.

12. The 2000 Order;in part, found:

a. McKillop, from Los Angeles, California, was the sole owner of BKL

BrokerLink Capital Research and Communications. Ex. 1 ¶ A.

b. From at least January 1999 and continuing in 2000, McKillop assisted in the

sale of twenty-one public shell companies, not only bringing purchasers and

3



sellers together, but also screening potential purchasers, meeting with

potential purchasers, helping negotiate fees, and generally acting as an

intermediary. Ex. 1 ¶ D.

c. McKillop solicited purchasers of shell companies through an Internet website,

www.bkl.coin, The Wall Street Journal, and other media. The website, which

McKillop drafted, stated that BKL BrokerLink "primarily assists) companies

in going public quickly via a merger with a public shell." The website offered

advice regarding alternative methods for privately held companies to become

public, including merging with an existing shell company. The website

instructed potential purchasers to send McKillop an executive summary or

business plan or to fill out a questionnaire provided on the website. After

screening potential purchasers, McKillop referred theirs to a securities lawyer

who created public shells for this purpose. Most of the shells were Delaware

corporations with 5,000,000 shares issued and outstanding, with no operating

histories, no liabilities and no material assets. McKillop negotiated the prices

offered for some of the public shells. McKillop earned one third of the first

$100,000 in fees and one half of all amounts over $100,000. Ex. 1 ¶ E.

13. The Commission, deeming remedial sanctions to be "appropriate and in the public

interest," ordered that "[p]ursuant to Section 21 C of the Exchange Act, [McKillop] cease and

desist from committing or causing any violation or future violation of Section 15(a) of the

Exchange Act ..." Ex. 1 ¶ IILB.

14. The 2000 Order remains in effect.

4



 

 

MCHILLOP'S VIOLATION OF THE 2000 ORDER

15. Since at least July 2012, Tiber Creek Corp. ("Tiber Creek") was a business

operated by McKillop and his business associate James M. Cassidy that assisted private

companies in going public. As part of that business, Tiber Creek created and maintained an

inventory of corporations, for which McKillop and Cassidy served as the officers, directors, and

fifty percent shareholders. Tiber Creek registered those corporations with the Commission and

thereby created public shell companies. Tiber Creek, through McKillop, solicited private

operating companies and charged them a fee for providing services that, in most instances,

resulted in the private company gaining control of one of Tiber Creek's public shells. In these

instances, Tiber Creek customers often were able to take their private companies public without

conducting a traditional initial public offering. Since July 2012, McKillop, along with Cassidy

and Tiber Creek, effected securities transactions for more than one hundred public shell

companies.

16. Tiber Creek was created to provide services to assist private companies in going

public. As part of the services it offered, Tiber Creek, by and through McKillop, created and

maintained an inventory of public shell companies that it made available to its customers.

McKillop, on behalf of Tiber Creek, solicited potential customers through an advertising

program including search engine optimization and ads, a collection of websites,2 videos, written

solicitations, classified advertisements, and a paid referral network.

17. To engage Tiber Creek, and take advantage of its services, private operating

companies paid aper-transaction fee. In exchange for this fee, McKillop and Cassidy effected

securities transactions between one of its public shells and the private operating company, in a

2 Tiber Creek owned and maintained numerous websites, such as publicshell-publicshells.com, that solicited contact

information which Tiber Creek used for sales leads.



process referred to by Tiber Creek as a transfer of control. Tiber Creek's fee, usually $100,000,

was not eligible for payment, under its standard agreement, unless it completed the transfer of a

public shell to a customer.

18. McKillop's compensation was drawn exclusively from the proceeds of Tiber

Creek. When McKillop redeemed his shares in the public shell during the sale transaction, he

received no consideration except for the customer's fee paid to Tiber Creek.

19. Tiber Creek provided certain advice as to the merits of potential customers'

investment in a public shell. For example, it was routinely recommended to Tiber Creek

customers that they recapitalize as Delaware public reporting shells and recommended that

customers issue themselves five million shares of the public shell to maintain a minimum share

price. McKillop, on behalf of Tiber Creek, discussed with customers their respective needs, such

as. anticipated accounting and investor relation services. McKillop did not perform any

substantial duties on behalf of any particular public shell. His position with the public shells was

exclusively in connection with services rendered by Tiber Creek.

20. After the customer took control of the public shell, Tiber Creek, for at least

certain clients, provided investor relations services and introductions to investment bankers and

broker-dealers. Tiber Creek assisted customers with, among other things, filing registration

statements, obtaining and preparing filings for a market maker, and fulfilling other financial

reporting requirements to comply with rules established by the Commission and the Public

Company Accounting Oversight Board.

21. During this time, McKillop was not, and is not currently, registered with the

Commission as a broker or in any other capacity.

6



CLAIM FOR RELIEF

22. The Commission re-alleges and restates paragraphs 1 through 21 above.

23. The S$C brings this Application pursuant to authority conferred on it by Sections

21(d)(5) and 21(e)(1) of the Exchange Act [15 U.S.C. §§ 78u(d)(5) and 78u(e)(1)]. In particular,

Section 21(e)(1) of the Exchange Act provides that, upon application of the Commission, the

district courts of the United States shall have jurisdiction to issue writs of mandamus,

injunctions, and orders commanding any person to comply with the provisions of the Exchange

Act and the rules and regulations thereunder, and with Commission administrative orders

instituted pursuant to the Exchange Act. "Section 21(e) of the Exchange Act expressly permits

the Commission to seek enforcement of its orders by making application to the district court."

SEC v. McCarthy, 322 F.3d 650, 655 (9th Cir. 2003) (citing 15 U.S.C. § 78u(e)); see also SEC v.

Vittor, 323 F.3d 930, 935 (11th Cir. 2003) (same).

24. Section 21(e) authorizes summary proceedings "`without formal pleadings, on

short notice, without summons and complaints, generally on affidavits, and sometimes even ex

pane,"' McCarthy, 322 F.3d at 655 (quoting New Hampshire Fire Ins. Co. v. Scanlon, 362 U.S.

404, 406-07 (1960)), because, "[b]y the time a § 21(e) application is filed by the Commission,

the time and opportunity for adjudicating the merits of the claim have been exhausted; all that is

left to do is enforce the order," id. at 658; see also SEC v. Gerasimowicz, 9 F. Supp. 3d 378, 381

(S.D.N.Y. 2014) (".[L]itigants are precluded from challenging the validity of SEC orders in

enforcement proceedings initiated pursuant to ...Section 21(e)(1) of the Exchange Act."); SEC

v. Securities Inv'r Protection Corp., 842 F. Supp. 2d 321, 326 (D.D.C. 2012) (following holding

in McCarthy "that Congress' use of the word ̀application' in Section 21(e) of the Securities

Exchange Act permitted the use of summary proceedings to enforce an order of the



Commission")

25. McKillop's Consent to the entry of an order in this proceeding is attached as

Exhibit 2.

26. A Proposed Order is attached as Exhibit 3.

WHEREFORE, the Commission respectfully requests that the Court:

(A) Enter an Order under Section 21(e) of the Exchange Act, in the form submitted,

directing McKillop to comply with the Final Order; and

(B) Retain jurisdiction over this matter for the purpose of enforcing the Order.

Dated: March 26, 2019 Respectfully Submitted,

l

Cheryl mpton

D.C. Bar No. 483776

Tel: (202) 551-4459

E-mail: [email protected]

Kevin Guerrero
AZ Bar No. 023673

Tel: (202) 551-4401

E-mail: [email protected]

Matthew Reilly

New York Bar No. 5130935

Tel: (202) 551-5478

E-mail: reill}[email protected]

Division of Enforcement

U.S. Securities and Exchange

Commission
100 F Street, N.E.

Washington, DC 20549

Fax: (202) 772-9292

0





 

UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION

ATTESTATION

IT IS HEREBY ATTESTED THAT:

Attached is a copy of ORDER INSTITUTING PROCEEDINGS PURSUANT

TO SECTIONS 15(b)(4) AND 21 C OF THE SECURITIES EXCHANGE

ACT OF 1934, MAKING FINDINGS, AND IMPOSING REMEDIAL

SANCTIONS AND ACEASE-AND-DESIST ORDER, dated December 12,

2000, in the matter of James K. McKillop d/b/a BKL BrokerLink Capital

Research and Communications, Administrative Proceeding File No. 3-10385.

This certified document was produced from the files of this Commission on

11/15/2018

Date

It is hereby certified that the Secretary of the U.S. Securities and

Exchange Commission, Washington, DC, which

Commission was created by the Securities Exchange Act of

1934 (15 U.S.C. 78a et seq.) is official custodian of the records

and files of said Commission and was such official custodian at

the time of executing the above attestation.

For the Commission

l,=r~ l~ .
Sec tary

SEC 334 (9-12)



 

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UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 43712 /December 12, 2000

ADMINISTRATIVE PROCEEDING
File No. 3-10385

In the Matter of

James K. McKillop d/b/a
BKL BrokerLink Capital Research
and
Communications

Respondent.

ORDER INSTITUTING PROCEEDINGS
PURSUANT TO SECTIONS 15(b)(4) AND
21C OF THE SECURITIES EXCHANGE
ACT OF 1934, MAKING FINDINGS, AND
IMPOSING REMEDIAL SANCTIONS AND
A CEASE-AND-DESIST ORDER

I.

The Securities and Exchange Commission ("Commission") deems it

appropriate and in the public interest that public administrative and cease-

and-desist proceedings be instituted pursuant to Sections 15(b)(4) and 21C

of the Securities Exchange Act of 1934 ("Exchange Act") against James K.

McKillop d/b/a BKL BrokerLink Capital Research and Communications

("Respondent").

In anticipation of the institution of these administrative proceedings,

Respondent has submitted an Offer of Settlement ("Offer"), which the

Commission has accepted. Solely for the purposes of these proceedings and

any other proceedings brought by or on behalf of the Commission or in

which the Commission is a party, and without admitting or denying the

findings herein, except for the jurisdiction of the Commission over him and

over the subject matter of these proceedings, which are admitted,
Respondent has consented to the entry of the findings and the imposition of

the remedial sanctions and cease-and-desist order as set forth below.

II.

On the basis of this Order and the Offer submitted by Respondent, the

Commission makes the following findings:

A. James K. McKillop ("Mckillop") d/b/a/ BKL BrokerLink Capital Research

and Communications ("BKL BrokerLink"), age 41, of Los Angeles, California,

is the sole owner of BKL BrokerLink. McKillop was associated with a broker-

dealer far fifteen months from approximately 1984 to 1986.

B. BKL BrakerLink is an investment banking and public relations consulting

firm. It derives over 90 percent of its income from introducing private

companies to a securities lawyer who takes the companies public via a

reverse merger with a public shell.



C. Respondent engaged in the business of effecting interstate transactions

in connection with the sale of stocks in public shells for the accounts of

others for compensation in the form of stock and/or cash.

D. From at least January 1999 and continuing in 2000, Respondent assisted
in the sale of twenty-one public shell companies, earning approximately

$992,000 plus 125,000 shares of stock. Respondent not only brought,

purchasers and sellers together, he also screened potential purchasers, met

with potential purchasers, helped negotiate fees and generally acted as an

intermediary.

E. Respondent solicited purchasers of shell companies through an Internet

website, www.bkl.com, The Wall Street Journal, and other media. The

website, which Respondent drafted, stated that BKL BrokerLink "primarily

assists) companies in going public quickly via a merger with a public shell."

The website offered advice regarding alternative methods for privately held

companies to become public, including merging with an existing shell

company. The website instructed potential purchasers to send Respondent

an executive summary or business plan or to fill out a questionnaire

provided on the website. After screening potential purchasers, Respondent

referred them to a securities lawyer who created public shells for this

purpose. Most of the shells were Delaware corporations with 5,000,000

shares issued and outstanding, with no operating histories, no liabilities and

no material assets. Respondent negotiated the prices offered for some of

the public shells, ranging from approximately $100,000 to $250,000, plus

attorneys fees. Respondent earned one third of the first $100,000 in fees

and one ha►f of all amounts over $100,000.

F. Section 15(a) of the Exchange Act requires that any person or entity
engaged in the interstate business of effecting securities transactions for
the accounts of others must register with the Commission as a broker or
dealer or, if a natural person, be associated with an entity that is registered
with the Commission as a broker or dealer. By virtue of the conduct
described above, Respondent willfully violated Section 15(a) of the
Exchange Act.

III.

In view of the foregoing, the Commission deems it appropriate and in the
public interest to accept the Offer submitted by Respondent and to impose
the sanctions specified therein.

Accordingly, IT IS ORDERED that:

A. Pursuant to Section 15(b)(4) of the Exchange Act, Respondent be
censured;

B. Pursuant to Section 21C of the Exchange Act, Respondent cease and
desist from committing or causing any violation or future violation of
Section 15(a) of the Exchange Act; and

C. Pursuant to Section 21B and Section 15(b)(4) of the Exchange Act,
within thirty (30) days of the entry of this Order, Respondent shall .pay a
civil money penalty in the amount of $10,000 to the United States Treasury.
Such payment shall be: (1) made by United States postal money order,
certified check, bank cashier's check or bank money order; (2) made
payable to the Securities and Exchange Commission; (3) hand-delivered or
mailed to the Office of the Comptroller, U.S. Securities and Exchange
Commission, Operations Center, 6432 General Green Way, Stop 0-3,
Alexandria, VA 22312; and (4) submitted under cover letter which identifies
James K. McKillop d/b/a BKL BrokerLink Capital Research and
Communications as the Respondent in this proceeding, the file number of



the proceeding, a copy of which cover letter and money order or check shall
be sent to Donald M. Hoerl, Associate Regional Director, Securities and
Exchange Commission, Central Regional OfFice, 1801 California Street,
Suite 4800, Denver, Colorado 80202.

By the Commission.

Jonathan G. Katz
Secretary

http://www.sec.gov/litigation/admin/34-43712. htm

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