SEC v. River North Equity LLC; Edward M. Liceaga; Michael A. Chavez; NanoTech Entertainment, Inc.; NanoTech Gaming, Inc.; David R. Foley, et al., No. LR-24419, Northern District of Illinois (Mar. 12, 2019) — Press Release
raw: River North Equity LLC, Edward M. Liceaga, Michael A. Chavez, NanoTech Entertainment, Inc., NanoTech Gaming, Inc., David R. Foley, Lisa L. Foley, Jeffrey A. Foley, and Bennie L. Blankenship
River North Equity LLC, Edward M. Liceaga, Michael A. Chavez, NanoTech Entertainment, Inc., NanoTech Gaming, Inc., David R. Foley, Lisa L. Foley, Jeffrey A. Foley, and Bennie L. Blankenship, No. LR-24419 (Mar. 12, 2019)
summary
The SEC charged nine individuals and companies, including David R. Foley and River North Equity LLC, with a multi-million dollar microcap stock manipulation scheme involving NanoTech Entertainment and NanoTech Gaming.
paragraph
The alleged scheme involved Foley acquiring over a billion shares of the companies' stock and selling them to River North Equity LLC, which then sold the shares to the public through unregistered transactions. The SEC seeks equitable and monetary relief, charging the defendants with violating registration provisions, broker-dealer registration provisions, and antifraud provisions. The alleged scheme occurred from February 2014 through October 2016, with damages estimated to be over $100 million.
narrative
The Securities and Exchange Commission (SEC) charged nine individuals and companies, including David R. Foley, founder of NanoTech Entertainment, Inc. and NanoTech Gaming, Inc., with a multi-million dollar microcap stock manipulation scheme. The alleged scheme involved Foley acquiring over a billion shares of the companies' stock through note conversions and selling them to River North Equity LLC, which then sold the shares to the public through unregistered transactions. Foley, who was incarcerated for unrelated crimes at the time, allegedly orchestrated the scheme, filing false financial statements and using social media promoter Bennie Blankenship to hype the stocks. River North Equity and its president Edward Liceaga, along with employee Michael Chavez, illegally distributed these unregistered shares to the public, with Lisa Foley and Jeffrey Foley facilitating key transactions. The SEC alleged violations of securities registration, broker-dealer registration, and anti-fraud provisions, seeking equitable and monetary relief. The case was filed in the Northern District of Illinois, with investigation support from FINRA and the Bahamas Securities Commission.
Classified market-manipulation(confidence 97%). EDGAR detection: forms SC 13D/G/13F· recall 53% / precision 9%. detection rule →
Statutes
Sections 5(a) and 5(c) of the Securities ActSections 5(a) and 5(c) of the Securities ActSection 15(a) of the Securities Exchange ActSection 17(a) of the Securities ActRule 10b-5
Parties
Securities and Exchange CommissionRiver North Equity LLCEdward M. LiceagaMichael A. ChavezNanoTech Entertainment, Inc.NanoTech Gaming, Inc.David R. FoleyLisa L. FoleyJeffrey A. FoleyBennie L. Blankenship
Keywords
foleyriver northnanotechdavid foleyrivernorthlisa foleyincdavidnorth equityedward liceagamichael chaveznanotech entertainmentnanotech gamingfoley lisa
Exhibits & Attached Documents (1)
Extracted insights
Entities 8
- person bennie l. blankenship
- person david r. foley
- person Edward M. Liceaga
- company nanotech entertainment, inc.
- company nanotech gaming, inc.
- company river north equity llc
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
Triples 33
- SEC Charges Nine Individuals and Companies for Roles in Microcap Scheme
- Securities and Exchange Commission sued River North Equity LLC, Edward M. Liceaga, Michael A. Chavez, NanoTech Entertainment, Inc., NanoTech Gaming, Inc.
- River North Equity LLC is charged in Microcap Scheme
- Edward M. Liceaga is charged in Microcap Scheme
- Michael A. Chavez is charged in Microcap Scheme
- NanoTech Entertainment, Inc. is charged in Microcap Scheme
- NanoTech Gaming, Inc. is charged in Microcap Scheme
- SEC charges River North Equity LLC, Edward M. Liceaga, Michael A. Chavez, NanoTech Entertainment, Inc., NanoTech Gaming, Inc., David R. Foley, Lisa L. Foley, Jeffrey A. Foley, and Bennie L. Blankenship for roles in microcap scheme
- River North Equity LLC was charged in a microcap scheme
- Edward M. Liceaga was charged in a microcap scheme
- Michael A. Chavez was charged in a microcap scheme
- NanoTech Entertainment, Inc. was charged in a microcap scheme
- NanoTech Gaming, Inc. was charged in a microcap scheme
- David R. Foley was charged in a microcap scheme
- Lisa L. Foley was charged in a microcap scheme
- Jeffrey A. Foley was charged in a microcap scheme
- Bennie L. Blankenship was charged in a microcap scheme
- Securities and Exchange Commission filed lawsuit against River North Equity LLC, Edward M. Liceaga, Michael A. Chavez, NanoTech Entertainment, Inc., NanoTech Gaming, Inc., David R. Foley, Lisa L. Foley, Jeffrey A. Foley, and Bennie L. Blankenship
- Securities and Exchange Commission charged nine individuals and companies
- March 12, 2019 is date of Litigation Release 24419
- SEC charges Nine Individuals and Companies
- SEC charges River North Equity LLC, Edward M. Liceaga, Michael A. Chavez, NanoTech Entertainment, Inc., NanoTech Gaming, Inc., David R. Foley, Lisa L. Foley, Jeffrey A. Foley, and Bennie L. Blankenship
- Litigation Release 24419 / March 12, 2019 Securities and Exchange Commission v. River North Equity LLC, Edward M. Liceaga, Michael A. Chavez, NanoTech Entertainment, Inc., NanoTech Gaming, Inc
- SEC charges Nine Individuals and Companies
- River North Equity LLC involved in Microcap Scheme
- Edward M. Liceaga charged by SEC
- Michael A. Chavez charged by SEC
- NanoTech Entertainment, Inc. involved in Microcap Scheme
- NanoTech Gaming, Inc. involved in Microcap Scheme
- David R. Foley charged by SEC
- Lisa L. Foley charged by SEC
- Jeffrey A. Foley charged by SEC
- Bennie L. Blankenship charged by SEC
Text layers
Extracted body text (3,103c)
SEC Charges Nine Individuals and Companies for Roles in Microcap Scheme Litigation Release 24419 / March 12, 2019 Securities and Exchange Commission v. River North Equity LLC, Edward M. Liceaga, Michael A. Chavez, NanoTech Entertainment, Inc., NanoTech Gaming, Inc., David R. Foley, Lisa L. Foley, Jeffrey A. Foley, and Bennie L. Blankenship , No. 19-cv-01711 [N.D. IL, filed March 11, 2019] On March 11, 2019, the Securities and Exchange Commission announced charges against nine individuals and companies in a multi-million dollar stock distribution and market manipulation scheme involving two microcap companies, NanoTech Entertainment, Inc. and NanoTech Gaming, Inc. The SEC's complaint alleges that David R. Foley, the founder of the NanoTech companies, orchestrated a scheme to manipulate trading in their stock and perpetrated some aspects of the scheme while serving out a prison sentence in two unrelated cases. As part of the scheme, Foley allegedly hired Bennie L. Blankenship, who promoted the NanoTech companies on Twitter, YouTube, and to an investor group he cultivated on social media, and engaged in manipulative trading with Foley. Foley also allegedly prepared false quarterly financial statements for the NanoTech companies. According to the SEC's complaint, from February 2014 through October 2016, Foley acquired more than a billion shares of the NanoTech companies' stock through the conversion of notes issued to himself, and then sold the stock to River North Equity LLC, a securities trading company, in a series of unregistered transactions. River North and its president, Edward M. Liceaga, then allegedly sold these shares to the public. Michael A. Chavez, a River North employee, acted as an unregistered broker for these sales. David Foley's wife, Lisa, completed over half of the sales of stock to River North, with the assistance of Jeffrey Foley, David's brother, and Chavez. David and Lisa Foley funneled some of their profits from these stock sales back to the NanoTech companies. The SEC's complaint, filed in federal district court in Chicago, charges River North, Liceaga, David Foley, Lisa Foley, Jeff Foley, Blankenship, NTEK and NTGL with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933. The complaint also charges River North, Liceaga, and Chavez with violating the broker-dealer registration provisions of Section 15(a) of the Securities Exchange Act of 1934 and David Foley and Blankenship with violating the antifraud provisions of Section 17(a) of the Securities Act, Section 10(b) of Exchange Act and Rule 10b-5 thereunder. The complaint seeks equitable and monetary relief. The SEC's investigation was conducted by Christine B. Jeon, Richard G. Stoltz, and Scott J. Hlavacek of the Chicago Regional Office and Joseph G. Darragh of the New York Regional Office and was supervised by Anne C. McKinley. The litigation will be led by Daniel J. Hayes and Robert M. Moye. The SEC appreciates the assistance of the Financial Industry Regulatory Authority and the Securities Commission of the Bahamas. SEC Complaint
OCR text (3,103c · html-text · 99% conf)
SEC Charges Nine Individuals and Companies for Roles in Microcap Scheme Litigation Release 24419 / March 12, 2019 Securities and Exchange Commission v. River North Equity LLC, Edward M. Liceaga, Michael A. Chavez, NanoTech Entertainment, Inc., NanoTech Gaming, Inc., David R. Foley, Lisa L. Foley, Jeffrey A. Foley, and Bennie L. Blankenship , No. 19-cv-01711 [N.D. IL, filed March 11, 2019] On March 11, 2019, the Securities and Exchange Commission announced charges against nine individuals and companies in a multi-million dollar stock distribution and market manipulation scheme involving two microcap companies, NanoTech Entertainment, Inc. and NanoTech Gaming, Inc. The SEC's complaint alleges that David R. Foley, the founder of the NanoTech companies, orchestrated a scheme to manipulate trading in their stock and perpetrated some aspects of the scheme while serving out a prison sentence in two unrelated cases. As part of the scheme, Foley allegedly hired Bennie L. Blankenship, who promoted the NanoTech companies on Twitter, YouTube, and to an investor group he cultivated on social media, and engaged in manipulative trading with Foley. Foley also allegedly prepared false quarterly financial statements for the NanoTech companies. According to the SEC's complaint, from February 2014 through October 2016, Foley acquired more than a billion shares of the NanoTech companies' stock through the conversion of notes issued to himself, and then sold the stock to River North Equity LLC, a securities trading company, in a series of unregistered transactions. River North and its president, Edward M. Liceaga, then allegedly sold these shares to the public. Michael A. Chavez, a River North employee, acted as an unregistered broker for these sales. David Foley's wife, Lisa, completed over half of the sales of stock to River North, with the assistance of Jeffrey Foley, David's brother, and Chavez. David and Lisa Foley funneled some of their profits from these stock sales back to the NanoTech companies. The SEC's complaint, filed in federal district court in Chicago, charges River North, Liceaga, David Foley, Lisa Foley, Jeff Foley, Blankenship, NTEK and NTGL with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933. The complaint also charges River North, Liceaga, and Chavez with violating the broker-dealer registration provisions of Section 15(a) of the Securities Exchange Act of 1934 and David Foley and Blankenship with violating the antifraud provisions of Section 17(a) of the Securities Act, Section 10(b) of Exchange Act and Rule 10b-5 thereunder. The complaint seeks equitable and monetary relief. The SEC's investigation was conducted by Christine B. Jeon, Richard G. Stoltz, and Scott J. Hlavacek of the Chicago Regional Office and Joseph G. Darragh of the New York Regional Office and was supervised by Anne C. McKinley. The litigation will be led by Daniel J. Hayes and Robert M. Moye. The SEC appreciates the assistance of the Financial Industry Regulatory Authority and the Securities Commission of the Bahamas. SEC Complaint