SEC v. Michael Quigley and Brian Quigley

Andrew M.
Calamari
REGIONAL DIRECTOR
Attorney for
Plaintiff
SECURITIES
AND
EXCHANGE COMMISSION
New
York Regional Office
200
Vesey
Street, Suite 400
New York, NY
10281-1022
(212) 336-0589 (Howard A.
Fischer, Senior Trial
Counsel)
Email:
[email protected]
UNITED STATES
DISTRICT
COURT
EASTERN DISTRICT
OF NEW YORK
SECURITIES
AND EXCHANGE COMMISSION,
Plaintiff,
-against-
MICHAEL QUIGLEY and BRIAN
QUIGLEY,
Defendants.
Civil No.
ECF CASE
COMPLAINT
AND JURY
DEMAND
Plaintiff Securities and
Exchange
Commission ("Commission") alleges the
following
against defendants Michael
Quigley and Brian Quigley
("Defendants"):
SUMMARY
OF ALLEGATIONS
1. This
case involves a
fraudulent securities offering
scheme conducted
by
defendants
Michael Quigley and Brian
Quigley, together with their
brother, William Quigley.
2. Defendants solicited
investors to invest in various
securities, including well-
known "blue
chip" issuers as well as
investment funds and one or more
penny stock "start-up"
companies
that supposedly were
on the verge of going public.
Michael Quigley and Brian
Quigley
never purchased any of
the offered securities
for the investors, and the claims
of
imminent public offerings
were lies. All of the investors'
funds, totaling at
least
$855,000,
were

misappropriated by the Quigleys.
3.
As part of the scheme, Defendants instructed several investors to wire their
investment funds
to various bank and brokerage accounts, including U.S. bank and brokerage
accounts that
William Quigley set up.
Defendants
issued phony brokerage statements to certain
investors purportedly
showing
that they had
growing account
balances. When investors
tried
to
liquidate the securities they had
been
led to believe they
owned,
Defendants made one
excuse
after another as to why their funds,
which
had already
been stolen, could not be returned to them.
VIOLATIONS
4. By virtue of
the
conduct alleged herein, Defendants, directly or indirectly, singly
or in concert,
violated Section 17(a) of the Securities
Act
of 1933 ("Securities Act") [15 U.S.C. §
77q(a)],
Section 10(b) of the Exchange Act of 1934 ("Exchange Act") [15 U.S.C. § 78j(b)] and
Rule lOb-5
thereunder
[17
C.F:R. § 240.1 Ob-5]. Unless Defendants are permanently restrained
and enjoined,
they will again engage in the acts, practices, transactions and courses of business
set forth in this
Complaint and in
acts,
practices, transactions and courses of business of similar
type and object.
5. For
these
violations, the Commission seeks
a final judgment against
Michael
Quigley ordering
permanent injunctive relief, disgorgement with prejudgment interest,
civil
monetary
penalties, a penny stock bar and such other relief as the Court deems just and proper,
and a final
judgment against Brian Quigley ordering permanent injunctive relief, a penny stock
bar and such
other relief as the Court deems just and proper.
2

JURISDICTION AND
VENUE
6.
The Commission brings this
action pursuant to
authority conferred by Sections
20(b),
20(d), and
20(g)(1) of the Securities
Act [15 U.S.C. §§ 77t(b),
77t(d), and 77t(g)(1)], and
Sections
21(d)(1), 21(d)(3), and
21(d)(6)(A) of
the Exchange Act [15 U.S.C. §§
78u(d)(1),
78u(d)(3),
and 78u(d)(6)(A)].
7.
This Court has
jurisdiction over this action
pursuant to Sections 20(b), 20(d),
20(g), 22(a),
and 22(c) of the Securities
Act [15 U.S.C. §§ 77t(b),
77t(d), 77t(g), 77v(a), 77v(c)];
and Sections
21(d),
21(e),
and 27
of the
Exchange Act [15 U.S.C. §§ 78u(d), 78u(e),
and 78aa].
8.
Venue is proper in this
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]. Many of the acts,
practices, events, transactions,
communications, courses of business
and other matters alleged
herein
occurred in the Eastern
District of New York,
including the
misappropriation of investor
funds from accounts
opened by William
Quigley for the purpose
of receiving and then funneling
investor funds to Defendants and
himself.
9.
In connection with
the conduct alleged in this
Complaint, Michael Quigley and
Brian
Quigley, directly or
indirectly, singly or in concert,
have made use of the means or
instruments
of transportation
or communication in,
and the means or instrumentalities of,
interstate commerce,
or
of
the mails.
DEFENDANTS
10.
Michael Quigley is 47 years
old. He was a registered
representative associated
with a
registered broker-dealer
from April 1999
through November 2002, and held Series 7
and
Series 661icenses. He
resided in the Philippines
during the
relevant
period and,
upon information
and belief, may
still reside there.

11.
Brian Quigley is
44
years
old. After living
in the Philippines for several years,
Brian Quigley
returned to the United States in 2017
and, upon
information and belief, is
currently living in
East Windsor, New Jersey. He was
a registered representative
associated with
a registered
broker-dealer from
July 1995 through April 1999,
and, during that time, he had
reportable disclosures
involving allegations of
conversion,
unsuitable investments, and churning.
RELEVANT INDIVIDUALS AND ENTITIES
12.
William Quigley was
Director of
Compliance of Trident Partners Ltd. ("Trident"),
a registered
broker-dealer in
Long Island, New York,
from June 2004 through September 2005
and
again from
October
2007
until September
2014. At all relevant times, he was a
resident of
Seaford, New York.
William Quigley is Defendants'
older brother. On
May
28,
2015, the
Commission
instituted administrative and
cease-and-desist proceedings
pursuant
to
Section 8A
of the Securities
Act and Sections
15(b) and 21 C of the
Exchange Act against William Quigley
("William Quigley
AP"), based on many of
the same allegations contained
herein. On March 24,
2016, in a
parallel criminal action
filed in the Eastern
District of New York by the United States
Attorney's
Office for the Eastern
District
of
New York,
William
Quigley
pleaded guilty to a
charge of
Conspiracy to Commit Wire
Fraud,
18
U.S.C. § 1349,
based on conduct alleged in the
William
Quigley AP. On October 26, 2016,
William
Quigley
was
sentenced to 6 months of
incarceration and 3 years
of supervised release
with 12 months of home confinement, and was
ordered to forfeit
$356,891. United States v.
William Michael Quigley, 15-CR-258
(JMA). On
March 24, 2017, the
Commission entered, with
William Quigley's consent,
an
order
(1) directing
William
Quigley
to
cease and
desist from committing or
causing the violations found in the
order;
(2) imposing securities
industry associational
and penny stock bars; and (3) requiring
disgorgement in the
amount of $356,891, deemed
satisfied by the forfeiture
order in
the criminal

case. In
the Matter of William Quigley,
Securities Act Release No. 10327,
2017 WL 1103692
(March 24, 2017).
13.
Trident
is
abroker-dealer
registered with the Commission since 1996. Trident's
principal place of business is
located in Woodbury, New York.
Trident terminated William
Quigley as its
Director of Compliance in
September 2014.
DEFENDANTS'
FRAUDULENT CONDU
Qverview
of the Scheme
14. From at
least 2003 through the latter part
of 2012, Michael Quigley and Brian
Quigley
repeatedly duped at least four
unsophisticated foreign individuals, including elderly
individuals, into
sending funds to various U.S.
bank and brokerage accounts
for
purported
investments
in the
securities
of publicly traded
companies, investment funds and private start-up
companies
supposedly
slated to go
public. Defendants
claimed
to
be associated with numerous
non-existent entities, including fictional
broker-dealers, and claimed to have various colleagues
at
these firms (using
phony
names
such as James Morris) who
appear
to
have been invented by
them as
well. Defendants never invested
or purchased securities with any of
the
investors'
funds.
Instead,
Defendants and their
brother William Quigley simply stole the funds.
15.
Michael Quigley and Brian Quigley
used virtually every trick in the book to
defraud investors,
including sending phony
account statements; using a fake firm name similar to
the name
of an existing firm; making up numerous
phony excuses for their
failure
to return
funds;
manufacturing stock certificates; falsely
claiming on various occasions to be helping the
investor recover previous losses;
requiring payment of bogus transfer
agent fees purportedly to
obtain the investors'
stock certificates; and other scams.
Indeed, Brian Quigley and Michael
Quigley
repeatedly managed to extract funds
from at least four investors for over a decade, by

creating new stories
and schemes.
16.
Michael Quigley and Brian Quigley
often persuaded investors to deposit their
funds into brokerage accounts
set up and controlled by
William
Quigley.
Upon deposit, the funds
were not invested, but stolen by
the
Quigleys.
17.
When the investors tried to get
their money back, Michael Quigley
and Brian
Quigley
made
up various
excuses and often used
the opportunity to defraud the investors out
of
additional funds.
Brian Quigley even told one
investor that the fictitious "James Morris,"
with
whom Brian Quigley was
supposedly working to invest the investor's funds,
had died in a
motorcycle accident
and therefore could not be
contacted about the investment.
18.
In
his
criminal guilty plea, William
Quigley admitted that from January 2003
through November 30,
2012, he (i) engaged with two
other individuals in a scheme to defraud
investors by inducing
them
to
transfer funds for the purported
purchase of securities; (ii) opened
several accounts into
which such investor funds
were transferred; and (iii) the investor funds
were not used to purchase
securities but were instead either transferred to
his
co-conspirators
in
the
Philippines or kept by him for his
personal use.
The
Early
Years of the Scheme
19.
From as
early
as
2003 and until at least as late as the end
of August 2012, Michael
Quigley
repeatedly lied to investors ire emails and telephones calls.
He initially held himself out
as a successful
broker at the fictitious firm
"Southwest Private Equity." By December
2004,
Michael
Quigley told investors that he had moved to a new firm
called "Advantages Securities
Group" as a
"Personal Broker." While "at" the Southwest and Advantages
firms, he purported
to
sell investors shares
in private companies, claiming
that the
investors
would soon get large
returns
when the companies went public. Those shares
included warrants for the purchase of
D

additional shares. These companies never went public, and there is no evidence that an initial
public offering was
actually contemplated or feasible.
2006-2012
20. By 2006, Michael Quigley told investors that he had moved to a new brokerage
firm called
"Trident
Partners
Investment Group," purportedly an NASD-registered brokerage
firm,
supposedly located in
Jericho,
New York. No such firm was registered with FINRA or
incorporated in any state; however, the name is confusingly similar to the name of William
Quigley's actual employer at the time,
Trident.
Defendants thereafter directed investors to send
funds to various
brokerage
accounts,
including three
accounts
that were opened and
controlled
by William
Quigley within the Eastern District of New York and from which the investors'
money was misappropriated by
the Quigleys in various ways.
21. While claiming to
be at "Trident
Partners Investment Group," Michael
Quigley
and his fictitious
associate "James Morris" lied to investors about the supposed imminence of the
previously promised public offerings of at least one penny stock start-up company and conned
the investors
into purportedly exercising their warrants in the soon-to-be-public company,
thereby
extracting additional bogus fees from the investors. As described in more detail below,
Michael Quigley and Brian
Quigley
also fraudulently persuaded investors to send them funds for
a wide range of other
phony investments, including blue-chip
companies,
well known mutual
funds and a
little known publicly traded penny stock company.
22. Michael Quigley further deceived
investors by
sending them fake brokerage
statements showing that the
supposedly
purchased securities were held in individual brokerage
accounts housed at
"Trident Partners Investment
Group,"
and that the
balances were
purportedly
growing. In
the phony account statements, Michael Quigley also falsely
represented to
investors
7

that their accounts
were
protected by
the Securities Investor Protection
Corporation, and that the
firm
was a member of the National
Association of Securities Dealers.
Accounts Set Up by Defendants' Brother
William Quigley
23. As part
of Defendants' scheme to defraud investors,
Defendants instructed
investors
to wire their
investment
funds
to U.S. bank and
brokerage
accounts that
William
Quigley created within the
Eastern District of
New
York for this
purpose. These
accounts
were
used
by
Defendants to
obtain, furuiel, dissipate, and otherwise steal investor funds,
and the
accounts had no
purpose other than to further their
fraudulent scheme.
24. One of these three accounts was
kept at Trident, as a "house account" in
the name
of
Funding Group, Inc.
("House Account"). Asa "house account," the activity in
the account
was
reviewed only by William
Quigley and not by the registered representatives
at
Trident.
The
other two
accounts, one in the name of Funding Group
Inc. ("Funding Group Account") and the
other in the name of Trident Partners
Investment Club ("TPIC Account"),
were
opened
at
a New
York
-based discount brokerage firm using post office
box addresses located in the Eastern
District of New
York.
Defendants' Use of the Three Accounts
to Obtain and Steal Investor Funds
25.
Hundreds of thousands of dollars of investor funds
were deposited in the three
accounts
described above. A
significant portion of the investor fiznds were subsequently
transferred to Brian
Quigley
and
Michael Quigley in the Philippines, much
of
it via
electronic
transfers,
including
from the Funding Group Account and the House
Account.
26.
Defendants instructed investors to wire funds to all
three of the subject
accounts
supposedly for the purchase of securities, but
no
investments
were ever made. Instead, all of the
money
deposited into these
three
accounts was
almost immediately wired out to a bank in the

Philippines,
otherwise
diverted
for the benefit of other Quigley
family members or else quickly
withdrawn in small amounts
(almost always in increments of $500) from ATM machines in the
vicinity of
William Quigley's home and
office
in
the Eastern District of New York.
Defendants'
Specific Misrepresentations to Four Investors
27. The information
set forth below details the misrepresentations
and other
fraudulent means through which
Defendants induced at least four of
their investor
victims to
wire money to the accounts set
up
by
William Quigley, from which
the money was then
misappropriated.
Investor A
28.
Investor A
lost
a
total of $230,000
to
Defendants' schemes.
The
following are
examples
of deceptions employed by
Michael Quigley
to
defraud Investor A from 2003-2012. In
each instance, as
described below, Investor A sent funds to
one of the three accounts that
William Quigley set up to
further
Defendants'
scheme.
29. In
June
2006,
Michael Quigley persuaded
Investor
A to
open up a new brokerage
account at the fictitious
"Trident Partners Investment Group." From June through December,
2006, Investor A sent $10,000
to the TPIC Account after Michael Quigley told Investor A that
these funds were
going
to
be used to buy bonds. Michael Quigley never intended to buy bonds
with the funds
and instead simply stole Investor A's money.
In January
2007,
Michael Quigley
emailed a phony account
statement
to
Investor
A from
Trident
Partners
Investment Group,
reflecting
his
fictitious bond holdings as well as $500 of
fictitious interest on the bonds. The
phony account
statement falsely stated that Trident Partners Investment Group was a "Member
NASD, SIPC,
MSRB." Michael Quigley also falsely told
Investor
A in emails that this
investment
was
"safe" and "completely insured" and that the bonds were
being converted into a

"FDIC
Insured Certificate of Deposit."
30.
In mid-2007, Michael Quigley fraudulently induced Investor A to exercise phony
warrants in
asoon-to-be-public company, which had common stock priced below $5 per share at
the time, that Michael Quigley
had
previously
purported
to
sell
to
him. Among other
things,
Michael
Quigley emailed a letter to Investor A,
supposedly
from the president of Trident
Partners
Investment Group, describing the warrant exercise opportunity as a "limited offer" and
"no
risk." From September 2007 through January 2008,
Investor
A
wired more
than $25,000 to
the TPIC Account for
these
warrants.
Michael
Quigley
never intended to obtain or exercise
warrants
for Investor A and instead simply stole the investor's money.
31.
In late
2009,
Michael Quigley pitched Investor A on a phony investment
in funds
and, on his
instructions, Investor A sent $4,983 to the House Account, which William Quigley
had just opened at
Trident. From February
through Apri12009,
Investor A sent about $15,000
more to the
House Account for the phony fund purchase that Michael Quigley had fraudulently
pitched to
him.
Michael
Quigley never intended to
invest
Investor A's
money in
funds and
instead
simply stole the investor's money.
32.
In May 2010, William Quigley emailed Michael Quigley information describing a
fund and
stated in the email, "Should be an easy
sell."
On the following day, Michael Quigley
began
to pitch Investor A on a
phony investment
in
a
similarly-named
fund.
From May through
October, 2010,
Investor A sent three wires totaling more than $27,200 for this phony
fund
investment to the
House
Account.
Michael Quigley
never intended to
invest
Investor A's money
in any such
fund and, once again, simply stole the investor's money. Michael Quigley continued
to defraud
Investor A in this manner through at least August 30, 2012.
33.
On November 25, 2010, Michael Quigley emailed Investor A
with
"exciting
10

news"
that two
employees of asoon-to-be-public company
were willing to buy his shares.
He
told
Investor A that he needed to
send a "transfer re
registration fee of $12,678 ...
ASAP."
These
statements were false. On
November 30, 2010, Investor A
wired this money to the House
Account.
34. From
February 2011 through at least
August 30,
2012,
Michael Quigley
fraudulently
induced Investor A to wire another $82,000 to
the Funding Group
Account
by
making further
misrepresentations about additional supposed
investments, which
were also
phony and
which funds were also
misappropriated.
35. Investor A
received another phony "Trident Partners
Investment Group"
account
statement in August
2012, which stated that the
broker
was
"Michael J. Quigley" and
showed a
"total
asset value" of
$486,694, including a CD, fund shares
and other purported investments
described
above. Investor A did not really
own any of these securities, as
Michael Quigley and
his
brother William Quigley
had simply stolen all of the money
that Investor A wired to
the
accounts set up by
William Quigley. Nevertheless,
on August 12,
2012, Michael Quigley
directed, via email,
Investor A to wire an additional $18,139
to the Funding Group
Account for
additional fictitious
investments. On August 26, 2012,
Michael Quigley emailed Investor A
additional wire
instructions for Investor A to use to
transfer these additional funds to
the Funding
Group
Account
for
additional fictitious investments.
Investor A's transfer of
the funds occurred
on
August
30,
2012. Michael
Quigley
also
stole those funds, which were
steadily withdrawn in
increments
of approximately $1,000
throughout September
2012.
The
Funding Group Account
was regularly accessed
online from the Philippines
throughout this period.
11

Investor B
36.
Investor B lost $72,000
to Defendants'
fraudulent
schemes. From 2003 through
2012,
Michael
Quigley purported
to sell to Investor B shares of soon-to-be-public
companies,
including at least
one company
with common stock priced below $5 per share. A portion
of
Investor B's funds were wired to the accounts controlled by William
Quigley. In
August
2007,
Investor B sent about $5,000 to the TPIC Account; in May and
September of 2010, Investor B
wired about $4,700 to the House Account. Investor B made these
transfers
after Michael
Quigley
falsely told him
that the
funds would be used to purchase shares of soon-to-be-public
companies.
All
of Investor B's funds were then
misappropriated by Defendants.
Investor C
37.
Investor C lost at least
$50,000 as a
result
of Defendants' fraudulent schemes.
During the
relevant time period,
Investor C's main Quigley-related contact was an
individual he
knew
as "James
Morris" of the fictitious Trident
Partners Investment Group. Described below
are some examples of
the
ruses used by "Morris" to get Investor C
to
send money
for phony
securities investments to an account managed
by
William Quigley,
through which it was then
misappropriated.
38. In 2006, "Morris" initially ingratiated himself
to
Investor
C by claiming he could
help Investor C
recover
money he had lost in an earlier scam. "Morris" later told
Investor C that
he had
located some of the "lost"
shares Investor C thought he had purchased and, in
June 2006,
persuaded
Investor C to
send $4,980 to the TPIC Account for "registration fees"
related to the
reissuance of these fictitious shares. The
statements
made
by "Morris" were false and Investor
C's money was stolen by the Quigleys.
39.
In late
November 2006, "Morris" fraudulently offered Investor
C the opportunity
12

to have a
purported "Wealth Management account"
at
Trident Partners Investment
Group,
and
told Investor C that "Morris"
would need
$50,000 to fund the
account.
These statements made by
"Morris" were false. In December 2006, Investor C sent more than $25,000 to the TPIC
Account for this purpose, and "Morris" then falsely told Investor C that the funds were used
to
purchase shares
of publicly traded companies. In
fact,
Investor
C's
money
was, once again,
stolen by the
Quigleys.
40.
In July
2007,
"Morris" fraudulently induced Investor
C
to
wire $13,300 to
the
TPIC
Account to exercise fake soon-to-be-public company
warrants
that "Morris" had
purportedly sold to
him
earlier. In
fact, Investor
C's money was, once again, stolen by the
Quigleys.
41. "James Morris" also sent Investor C a fake Trident Partners Investment Group
account statement -- the same phony firm from which Investor A received (via Michael Quigley)
an account
statement
identifying
Michael
Quigley as the
broker --
listing "James Morris" as
Investor
C's
broker and listing the account number of one of the accounts set up
by
William
Quigley to carry
out the scheme.
42.
In
August
2010,
Investor
C requested a distribution from this account. "Morris"
told
him that
he
would have to pay $7,000 to liquidate
holdings. Investor C sent this amount to
the Funding Group Account. Investor C never received a penny from
his
"account" and never
heard from "Morris" again.
Investor D
43.
Investor D lost about
$530,000,
beginning
in 2003, to Defendants' fraudulent
scheme.
44. In 2010, the same so-called "James Morris" and Brian
Quigley fraudulently
13

solicited Investor
D to make a purported $100,000
investment in
a company
quoted on the Over-
the-Counter ("OTC")
markets. In a March 2010 email that "Morris" sent to
Investor D, Brian
Quigley is said to have
identified
this
purported investment opportunity, using a
slightly
different
variation of the company's name. A February 2010
email
written
by Brian Quigley and copied to
Michael
Quigley had attached information about this OTC company and stated
that "[t]his
should
answer product specific questions." Investor D sent his $100,000 for an
investment in the
OTC
company to the Funding Group
Account.
During this time,
the market price of the OTC
company was approximately $1.90
per share
and
remained below $5 throughout the
relevant
time.
45.
None of Investor D's money was ever invested, and most of it was
immediately
wired out of the
Funding Group Account to a bank in the Philippines. Much of the rest was
withdrawn in small amounts from ATMs
iri close proximity
to
William Quigley's office at
Trident in Long
Island. During this same period, William Quigley wired about $42,000 in
small
increments from various Western
Union
locations
in Long
Island to
the Philippines, frequently
specifying
Michael Quigley or Brian Quigley as the recipient of such funds.
46.
In fa112010, "Morris" sent Investor D documents purporting to evidence Investor
D's
investment in the OTC company, including
a
phony stock certificate and an unexecuted
promissory note. Realizing that the promissory
note
was
not
signed,
Investor D contacted the
actual company named in the
stock certificate and
was
informed by the company's CEO that the
stock certificate was bogus (it had a
forged signature
and
identified the wrong transfer agent).
The CEO also
told Investor D that the company had never received any of the monies Investor D
thought
he had invested. After Investor D complained to "Morris," Investor
D
received a bogus
letter from the "Senior Risk Officer of
the
Funding Group,"
apologizing and falsely telling
14

Investor D that the
Funding
Group
was replacing his investment
with 6,000 shares of an equity
fund.
47. Investor D made one further
purported investment as a result of
Defendants'
scheme, sending another $14,000 to the
Funding Group account in
February 2011. Investor D
sent
this
money in response
to an email from "Morris" falsely
representing that Investor D
could
sell his shares in
asoon-to-be-public
company (with common
stock priced below $5 per share)
for a total of $952,196, but first
needed to pay a $14,000 "transfer
fee." He never heard from
"Morris" again. In an effort to find
"Morris," Investor D reached out
to Brian Quigley in early
2011. In May 2011, Brian Quigley emailed Investor D
in furtherance of the
scheme, lying as
follows:
"Regarding Mr.
Morris, I am sorry to inform you
that we have heard that [he]
was
killed in a motorcycle accident some months ago. We are
actually looking for an
address where
we could send our condolences. When we
find one, we will send it
to you as well." Investor D
never
received the $952,196 or any other return on
his purported
"investments."
All
of his funds
were stolen by the
Quigleys.
48.
Based on the
foregoing, including the fact that
"James Morris"
directed investors
to
send
funds to the
same
accounts to which Michael Quigley
and Brian Quigley
directed
investors
to send
funds, "James Morris" actually was, on
information and belief, an
alias used by
either Michael Quigley or Brian Quigley,
or by both of them and/or
by another individual
with
whom Defendants acted in concert to
perpetrate the fraudulent scheme
described above.
49. Based on the foregoing,
Defendants were, at the time
of the misconduct
alleged
above,
participating
in the
offering of penny
stocks, as
such
stocks are
defined
in
Section
3(a)(51) of the Exchange Act
and
Rule
3a51-1 thereunder, by
virtue of Defendants having
engaged in activities for purposes of
the purported issuance or
trading, and/or inducing or
15

attempting to
induce the purported
purchase or sale of, a penny stock.
FIRST CLAIM FOR RELIEF
Violations
of Section 17(a) of the Securities Act
(Both Defendants)
50.
The Commission realleges
and incorporates by reference herein each and every
allegation
contained in paragraphs 1
through
49.
51.
Defendants,
directly or indirectly, singly or in concert, in the offer or sale of
securities and by the
use
of
the means of instruments of transportation or
communication in
interstate
commerce, knowingly, recklessly, or
negligently have: (a) employed devices, schemes,
or artifices to
defraud; (b) obtained money
or property
by
means of untrue statements of a
material fact or omissions of a
material fact necessary in order to make the statement made, in
light of the
circumstances under which they
were made, not misleading; and/or (c) engaged in
transactions, practices, or courses
of business which operated or would operate as a fraud or
deceit upon
the purchaser.
52. By reason of
the foregoing, Defendants, directly or
indirectly,
singly or in
concert,
have
violated, and unless
enjoined will again violate, Section 17(a) of the Securities Act [15
U.S.C. § 77q(a)].
SECOND CLAIM FOR RELIEF
Violations of
Section
10(b)
of the Exchange Act and Rule lOb-5
(Both Defendants)
53. The Commission realleges
and incorporates by reference herein each and every
allegation
contained in
paragraphs
1 through 49.
54.
Defendants,
directly or indirectly, singly or in concert,
in connection with the
purchase or
sale of
securities
and by the use of the means
or instrumentalities of interstate
16

commerce
or of
the mails,
or of the facilities of a national securities
exchange, knowingly or
recklessly have: (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
statement made, in light of the circumstances under which
they were made, not misleading;
and/or
(c)
engaged in
acts,
practices, or courses of business
which operated or would operate as a
fraud
or deceit upon other persons.
55. By reason of the foregoing, Defendants,
directly or indirectly, singly or in concert,
have violated, and unless enjoined
will again violate, Section 10(b) of the Exchange
Act
[15
U.S.C. § 78j(b)] and
Rule lOb-5 thereunder [17 C.F.R. § 240.1Ob-5].
PRAYER
FOR
RELIEF
WHEREFORE, the Commission
respectfully requests a Final Judgment:
I.
Permanently enjoining both Defendants from
committing the violations of the
federal
securities laws alleged
in this Complaint;
II.
Ordering Michael
Quigley
to
disgorge
the
ill-gotten gains he obtained as a result of
the
violations alleged
in
this
Complaint,
and
ordering him to pay prejudgment interest
thereon;
III.
Ordering Michael Quigley 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)];
IV.
Prohibiting
both Defendants from participating in an offering of penny
stock pursuant
to
Section 20(g)(1) of the Securities Act [15 U.S.C. § 77t(g)(1)] and
Section 21(d)(6)(A) of the
17

Exchange Act [15 U.S.C. §
78u(d)(6)(A)]; and
V.
Granting such other and further
relief as the Court may deem
just
and
proper.
JURY DEMAND
Pursuant to Rule 38 of the Federal Rules
of Civil Procedure,
the
Commission demands
trial by jury in this
action of all issues so triable.
Dated: New
York, New York
August
10,
2017
Respeft y submit
Andrew M. Calamari
Regional Director
Attorney
for Plaintiff
SECURITIES
AND EXCHANGE COMMISSION
Howard A. Fischer, Senior Trial Counsel
New York Regional
Office
200 Vesey
Street, Suite 400
New
York, New York 10281-1022
(212)
336-0589
(Fischer)
Email:
[email protected]
Of Counsel:
Sanjay Wadhwa
George N.
Stepaniuk
Michael Paley
Chevon
Walker
18

Andrew M. Calamari
REGIONAL DIRECTOR
Attorney for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
200 Vesey Street, Suite 400
New York, NY 10281-1022
(212) 336-0589 (Howard A. Fischer, Senior Trial Counsel)
Email: [email protected]

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

-against-

MICHAEL QUIGLEY and BRIAN QUIGLEY,

Defendants.

Civil No.

ECF CASE

COMPLAINT AND JURY
DEMAND

Plaintiff Securities and Exchange Commission ("Commission") alleges the following

against defendants Michael Quigley and Brian Quigley ("Defendants"):

SUMMARY OF ALLEGATIONS

1. This case involves a fraudulent securities offering scheme conducted by

defendants Michael Quigley and Brian Quigley, together with their brother, William Quigley.

2. Defendants solicited investors to invest in various securities, including well-

known "blue chip" issuers as well as investment funds and one or more penny stock "start-up"

companies that supposedly were on the verge of going public. Michael Quigley and Brian

Quigley never purchased any of the offered securities for the investors, and the claims of

imminent public offerings were lies. All of the investors' funds, totaling at least $855,000, were

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misappropriated by the Quigleys.

3. As part of the scheme, Defendants instructed several investors to wire their

investment funds to various bank and brokerage accounts, including U.S. bank and brokerage

accounts that William Quigley set up. Defendants issued phony brokerage statements to certain

investors purportedly showing that they had growing account balances. When investors tried to

liquidate the securities they had been led to believe they owned, Defendants made one excuse

after another as to why their funds, which had already been stolen, could not be returned to them.

VIOLATIONS

4. By virtue of the conduct alleged herein, Defendants, directly or indirectly, singly

or in concert, violated Section 17(a) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. §

77q(a)], Section 10(b) of the Exchange Act of 1934 ("Exchange Act") [15 U.S.C. § 78j(b)] and

Rule lOb-5 thereunder [17 C.F:R. § 240.1 Ob-5]. Unless Defendants are permanently restrained

and enjoined, they will again engage in the acts, practices, transactions and courses of business

set forth in this Complaint and in acts, practices, transactions and courses of business of similar

type and object.

5. For these violations, the Commission seeks a final judgment against Michael

Quigley ordering permanent injunctive relief, disgorgement with prejudgment interest, civil

monetary penalties, a penny stock bar and such other relief as the Court deems just and proper,

and a final judgment against Brian Quigley ordering permanent injunctive relief, a penny stock

bar and such other relief as the Court deems just and proper.

2

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JURISDICTION AND VENUE

6. The Commission brings this action pursuant to authority conferred by Sections

20(b), 20(d), and 20(g)(1) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), and 77t(g)(1)], and

Sections 21(d)(1), 21(d)(3), and 21(d)(6)(A) of the Exchange Act [15 U.S.C. §§ 78u(d)(1),

78u(d)(3), and 78u(d)(6)(A)].

7. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d),

20(g), 22(a), and 22(c) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), 77t(g), 77v(a), 77v(c)];

and Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].

8. Venue is proper in this 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]. Many of the acts,

practices, events, transactions, communications, courses of business and other matters alleged

herein occurred in the Eastern District of New York, including the misappropriation of investor

funds from accounts opened by William Quigley for the purpose of receiving and then funneling

investor funds to Defendants and himself.

9. In connection with the conduct alleged in this Complaint, Michael Quigley and

Brian Quigley, directly or indirectly, singly or in concert, have made use of the means or

instruments of transportation or communication in, and the means or instrumentalities of,

interstate commerce, or of the mails.

DEFENDANTS

10. Michael Quigley is 47 years old. He was a registered representative associated

with a registered broker-dealer from April 1999 through November 2002, and held Series 7 and

Series 661icenses. He resided in the Philippines during the relevant period and, upon information

and belief, may still reside there.

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11. Brian Quigley is 44 years old. After living in the Philippines for several years,

Brian Quigley returned to the United States in 2017 and, upon information and belief, is

currently living in East Windsor, New Jersey. He was a registered representative associated with

a registered broker-dealer from July 1995 through April 1999, and, during that time, he had

reportable disclosures involving allegations of conversion, unsuitable investments, and churning.

RELEVANT INDIVIDUALS AND ENTITIES

12. William Quigley was Director of Compliance of Trident Partners Ltd. ("Trident"),

a registered broker-dealer in Long Island, New York, from June 2004 through September 2005

and again from October 2007 until September 2014. At all relevant times, he was a resident of

Seaford, New York. William Quigley is Defendants' older brother. On May 28, 2015, the

Commission instituted administrative and cease-and-desist proceedings pursuant to Section 8A

of the Securities Act and Sections 15(b) and 21 C of the Exchange Act against William Quigley

("William Quigley AP"), based on many of the same allegations contained herein. On March 24,

2016, in a parallel criminal action filed in the Eastern District of New York by the United States

Attorney's Office for the Eastern District of New York, William Quigley pleaded guilty to a

charge of Conspiracy to Commit Wire Fraud, 18 U.S.C. § 1349, based on conduct alleged in the

William Quigley AP. On October 26, 2016, William Quigley was sentenced to 6 months of

incarceration and 3 years of supervised release with 12 months of home confinement, and was

ordered to forfeit $356,891. United States v. William Michael Quigley, 15-CR-258 (JMA). On

March 24, 2017, the Commission entered, with William Quigley's consent, an order (1) directing

William Quigley to cease and desist from committing or causing the violations found in the

order; (2) imposing securities industry associational and penny stock bars; and (3) requiring

disgorgement in the amount of $356,891, deemed satisfied by the forfeiture order in the criminal

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case. In the Matter of William Quigley, Securities Act Release No. 10327, 2017 WL 1103692

(March 24, 2017).

13. Trident is abroker-dealer registered with the Commission since 1996. Trident's

principal place of business is located in Woodbury, New York. Trident terminated William

Quigley as its Director of Compliance in September 2014.

DEFENDANTS' FRAUDULENT CONDU

Qverview of the Scheme

14. From at least 2003 through the latter part of 2012, Michael Quigley and Brian

Quigley repeatedly duped at least four unsophisticated foreign individuals, including elderly

individuals, into sending funds to various U.S. bank and brokerage accounts for purported

investments in the securities of publicly traded companies, investment funds and private start-up

companies supposedly slated to go public. Defendants claimed to be associated with numerous

non-existent entities, including fictional broker-dealers, and claimed to have various colleagues

at these firms (using phony names such as James Morris) who appear to have been invented by

them as well. Defendants never invested or purchased securities with any of the investors' funds.

Instead, Defendants and their brother William Quigley simply stole the funds.

15. Michael Quigley and Brian Quigley used virtually every trick in the book to

defraud investors, including sending phony account statements; using a fake firm name similar to

the name of an existing firm; making up numerous phony excuses for their failure to return

funds; manufacturing stock certificates; falsely claiming on various occasions to be helping the

investor recover previous losses; requiring payment of bogus transfer agent fees purportedly to

obtain the investors' stock certificates; and other scams. Indeed, Brian Quigley and Michael

Quigley repeatedly managed to extract funds from at least four investors for over a decade, by

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creating new stories and schemes.

16. Michael Quigley and Brian Quigley often persuaded investors to deposit their

funds into brokerage accounts set up and controlled by William Quigley. Upon deposit, the funds

were not invested, but stolen by the Quigleys.

17. When the investors tried to get their money back, Michael Quigley and Brian

Quigley made up various excuses and often used the opportunity to defraud the investors out of

additional funds. Brian Quigley even told one investor that the fictitious "James Morris," with

whom Brian Quigley was supposedly working to invest the investor's funds, had died in a

motorcycle accident and therefore could not be contacted about the investment.

18. In his criminal guilty plea, William Quigley admitted that from January 2003

through November 30, 2012, he (i) engaged with two other individuals in a scheme to defraud

investors by inducing them to transfer funds for the purported purchase of securities; (ii) opened

several accounts into which such investor funds were transferred; and (iii) the investor funds

were not used to purchase securities but were instead either transferred to his co-conspirators in

the Philippines or kept by him for his personal use.

The Early Years of the Scheme

19. From as early as 2003 and until at least as late as the end of August 2012, Michael

Quigley repeatedly lied to investors ire emails and telephones calls. He initially held himself out

as a successful broker at the fictitious firm "Southwest Private Equity." By December 2004,

Michael Quigley told investors that he had moved to a new firm called "Advantages Securities

Group" as a "Personal Broker." While "at" the Southwest and Advantages firms, he purported to

sell investors shares in private companies, claiming that the investors would soon get large

returns when the companies went public. Those shares included warrants for the purchase of

D

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additional shares. These companies never went public, and there is no evidence that an initial

public offering was actually contemplated or feasible.

2006-2012

20. By 2006, Michael Quigley told investors that he had moved to a new brokerage

firm called "Trident Partners Investment Group," purportedly an NASD-registered brokerage

firm, supposedly located in Jericho, New York. No such firm was registered with FINRA or

incorporated in any state; however, the name is confusingly similar to the name of William

Quigley's actual employer at the time, Trident. Defendants thereafter directed investors to send

funds to various brokerage accounts, including three accounts that were opened and controlled

by William Quigley within the Eastern District of New York and from which the investors'

money was misappropriated by the Quigleys in various ways.

21. While claiming to be at "Trident Partners Investment Group," Michael Quigley

and his fictitious associate "James Morris" lied to investors about the supposed imminence of the

previously promised public offerings of at least one penny stock start-up company and conned

the investors into purportedly exercising their warrants in the soon-to-be-public company,

thereby extracting additional bogus fees from the investors. As described in more detail below,

Michael Quigley and Brian Quigley also fraudulently persuaded investors to send them funds for

a wide range of other phony investments, including blue-chip companies, well known mutual

funds and a little known publicly traded penny stock company.

22. Michael Quigley further deceived investors by sending them fake brokerage

statements showing that the supposedly purchased securities were held in individual brokerage

accounts housed at "Trident Partners Investment Group," and that the balances were purportedly

growing. In the phony account statements, Michael Quigley also falsely represented to investors

7

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that their accounts were protected by the Securities Investor Protection Corporation, and that the

firm was a member of the National Association of Securities Dealers.

Accounts Set Up by Defendants' Brother William Quigley

23. As part of Defendants' scheme to defraud investors, Defendants instructed

investors to wire their investment funds to U.S. bank and brokerage accounts that William

Quigley created within the Eastern District of New York for this purpose. These accounts were

used by Defendants to obtain, furuiel, dissipate, and otherwise steal investor funds, and the

accounts had no purpose other than to further their fraudulent scheme.

24. One of these three accounts was kept at Trident, as a "house account" in the name

of Funding Group, Inc. ("House Account"). Asa "house account," the activity in the account

was reviewed only by William Quigley and not by the registered representatives at Trident. The

other two accounts, one in the name of Funding Group Inc. ("Funding Group Account") and the

other in the name of Trident Partners Investment Club ("TPIC Account"), were opened at a New

York-based discount brokerage firm using post office box addresses located in the Eastern

District of New York.

Defendants' Use of the Three Accounts to Obtain and Steal Investor Funds

25. Hundreds of thousands of dollars of investor funds were deposited in the three

accounts described above. A significant portion of the investor fiznds were subsequently

transferred to Brian Quigley and Michael Quigley in the Philippines, much of it via electronic

transfers, including from the Funding Group Account and the House Account.

26. Defendants instructed investors to wire funds to all three of the subject accounts

supposedly for the purchase of securities, but no investments were ever made. Instead, all of the

money deposited into these three accounts was almost immediately wired out to a bank in the

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Philippines, otherwise diverted for the benefit of other Quigley family members or else quickly

withdrawn in small amounts (almost always in increments of $500) from ATM machines in the

vicinity of William Quigley's home and office in the Eastern District of New York.

Defendants' Specific Misrepresentations to Four Investors

27. The information set forth below details the misrepresentations and other

fraudulent means through which Defendants induced at least four of their investor victims to

wire money to the accounts set up by William Quigley, from which the money was then

misappropriated.

Investor A

28. Investor A lost a total of $230,000 to Defendants' schemes. The following are

examples of deceptions employed by Michael Quigley to defraud Investor A from 2003-2012. In

each instance, as described below, Investor A sent funds to one of the three accounts that

William Quigley set up to further Defendants' scheme.

29. In June 2006, Michael Quigley persuaded Investor A to open up a new brokerage

account at the fictitious "Trident Partners Investment Group." From June through December,

2006, Investor A sent $10,000 to the TPIC Account after Michael Quigley told Investor A that

these funds were going to be used to buy bonds. Michael Quigley never intended to buy bonds

with the funds and instead simply stole Investor A's money. In January 2007, Michael Quigley

emailed a phony account statement to Investor A from Trident Partners Investment Group,

reflecting his fictitious bond holdings as well as $500 of fictitious interest on the bonds. The

phony account statement falsely stated that Trident Partners Investment Group was a "Member

NASD, SIPC, MSRB." Michael Quigley also falsely told Investor A in emails that this

investment was "safe" and "completely insured" and that the bonds were being converted into a

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"FDIC Insured Certificate of Deposit."

30. In mid-2007, Michael Quigley fraudulently induced Investor A to exercise phony

warrants in asoon-to-be-public company, which had common stock priced below $5 per share at

the time, that Michael Quigley had previously purported to sell to him. Among other things,

Michael Quigley emailed a letter to Investor A, supposedly from the president of Trident

Partners Investment Group, describing the warrant exercise opportunity as a "limited offer" and

"no risk." From September 2007 through January 2008, Investor A wired more than $25,000 to

the TPIC Account for these warrants. Michael Quigley never intended to obtain or exercise

warrants for Investor A and instead simply stole the investor's money.

31. In late 2009, Michael Quigley pitched Investor A on a phony investment in funds

and, on his instructions, Investor A sent $4,983 to the House Account, which William Quigley

had just opened at Trident. From February through Apri12009, Investor A sent about $15,000

more to the House Account for the phony fund purchase that Michael Quigley had fraudulently

pitched to him. Michael Quigley never intended to invest Investor A's money in funds and

instead simply stole the investor's money.

32. In May 2010, William Quigley emailed Michael Quigley information describing a

fund and stated in the email, "Should be an easy sell." On the following day, Michael Quigley

began to pitch Investor A on a phony investment in a similarly-named fund. From May through

October, 2010, Investor A sent three wires totaling more than $27,200 for this phony fund

investment to the House Account. Michael Quigley never intended to invest Investor A's money

in any such fund and, once again, simply stole the investor's money. Michael Quigley continued

to defraud Investor A in this manner through at least August 30, 2012.

33. On November 25, 2010, Michael Quigley emailed Investor A with "exciting

10

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news" that two employees of asoon-to-be-public company were willing to buy his shares. He

told Investor A that he needed to send a "transfer re registration fee of $12,678 ... ASAP."

These statements were false. On November 30, 2010, Investor A wired this money to the House

Account.

34. From February 2011 through at least August 30, 2012, Michael Quigley

fraudulently induced Investor A to wire another $82,000 to the Funding Group Account by

making further misrepresentations about additional supposed investments, which were also

phony and which funds were also misappropriated.

35. Investor A received another phony "Trident Partners Investment Group" account

statement in August 2012, which stated that the broker was "Michael J. Quigley" and showed a

"total asset value" of $486,694, including a CD, fund shares and other purported investments

described above. Investor A did not really own any of these securities, as Michael Quigley and

his brother William Quigley had simply stolen all of the money that Investor A wired to the

accounts set up by William Quigley. Nevertheless, on August 12, 2012, Michael Quigley

directed, via email, Investor A to wire an additional $18,139 to the Funding Group Account for

additional fictitious investments. On August 26, 2012, Michael Quigley emailed Investor A

additional wire instructions for Investor A to use to transfer these additional funds to the Funding

Group Account for additional fictitious investments. Investor A's transfer of the funds occurred

on August 30, 2012. Michael Quigley also stole those funds, which were steadily withdrawn in

increments of approximately $1,000 throughout September 2012. The Funding Group Account

was regularly accessed online from the Philippines throughout this period.

11

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Investor B

36. Investor B lost $72,000 to Defendants' fraudulent schemes. From 2003 through

2012, Michael Quigley purported to sell to Investor B shares of soon-to-be-public companies,

including at least one company with common stock priced below $5 per share. A portion of

Investor B's funds were wired to the accounts controlled by William Quigley. In August 2007,

Investor B sent about $5,000 to the TPIC Account; in May and September of 2010, Investor B

wired about $4,700 to the House Account. Investor B made these transfers after Michael Quigley

falsely told him that the funds would be used to purchase shares of soon-to-be-public companies.

All of Investor B's funds were then misappropriated by Defendants.

Investor C

37. Investor C lost at least $50,000 as a result of Defendants' fraudulent schemes.

During the relevant time period, Investor C's main Quigley-related contact was an individual he

knew as "James Morris" of the fictitious Trident Partners Investment Group. Described below

are some examples of the ruses used by "Morris" to get Investor C to send money for phony

securities investments to an account managed by William Quigley, through which it was then

misappropriated.

38. In 2006, "Morris" initially ingratiated himself to Investor C by claiming he could

help Investor C recover money he had lost in an earlier scam. "Morris" later told Investor C that

he had located some of the "lost" shares Investor C thought he had purchased and, in June 2006,

persuaded Investor C to send $4,980 to the TPIC Account for "registration fees" related to the

reissuance of these fictitious shares. The statements made by "Morris" were false and Investor

C's money was stolen by the Quigleys.

39. In late November 2006, "Morris" fraudulently offered Investor C the opportunity

12

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to have a purported "Wealth Management account" at Trident Partners Investment Group, and

told Investor C that "Morris" would need $50,000 to fund the account. These statements made by

"Morris" were false. In December 2006, Investor C sent more than $25,000 to the TPIC

Account for this purpose, and "Morris" then falsely told Investor C that the funds were used to

purchase shares of publicly traded companies. In fact, Investor C's money was, once again,

stolen by the Quigleys.

40. In July 2007, "Morris" fraudulently induced Investor C to wire $13,300 to the

TPIC Account to exercise fake soon-to-be-public company warrants that "Morris" had

purportedly sold to him earlier. In fact, Investor C's money was, once again, stolen by the

Quigleys.

41. "James Morris" also sent Investor C a fake Trident Partners Investment Group

account statement -- the same phony firm from which Investor A received (via Michael Quigley)

an account statement identifying Michael Quigley as the broker -- listing "James Morris" as

Investor C's broker and listing the account number of one of the accounts set up by William

Quigley to carry out the scheme.

42. In August 2010, Investor C requested a distribution from this account. "Morris"

told him that he would have to pay $7,000 to liquidate holdings. Investor C sent this amount to

the Funding Group Account. Investor C never received a penny from his "account" and never

heard from "Morris" again.

Investor D

43. Investor D lost about $530,000, beginning in 2003, to Defendants' fraudulent

scheme.

44. In 2010, the same so-called "James Morris" and Brian Quigley fraudulently

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solicited Investor D to make a purported $100,000 investment in a company quoted on the Over-

the-Counter ("OTC") markets. In a March 2010 email that "Morris" sent to Investor D, Brian

Quigley is said to have identified this purported investment opportunity, using a slightly different

variation of the company's name. A February 2010 email written by Brian Quigley and copied to

Michael Quigley had attached information about this OTC company and stated that "[t]his

should answer product specific questions." Investor D sent his $100,000 for an investment in the

OTC company to the Funding Group Account. During this time, the market price of the OTC

company was approximately $1.90 per share and remained below $5 throughout the relevant

time.

45. None of Investor D's money was ever invested, and most of it was immediately

wired out of the Funding Group Account to a bank in the Philippines. Much of the rest was

withdrawn in small amounts from ATMs iri close proximity to William Quigley's office at

Trident in Long Island. During this same period, William Quigley wired about $42,000 in small

increments from various Western Union locations in Long Island to the Philippines, frequently

specifying Michael Quigley or Brian Quigley as the recipient of such funds.

46. In fa112010, "Morris" sent Investor D documents purporting to evidence Investor

D's investment in the OTC company, including a phony stock certificate and an unexecuted

promissory note. Realizing that the promissory note was not signed, Investor D contacted the

actual company named in the stock certificate and was informed by the company's CEO that the

stock certificate was bogus (it had a forged signature and identified the wrong transfer agent).

The CEO also told Investor D that the company had never received any of the monies Investor D

thought he had invested. After Investor D complained to "Morris," Investor D received a bogus

letter from the "Senior Risk Officer of the Funding Group," apologizing and falsely telling

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Investor D that the Funding Group was replacing his investment with 6,000 shares of an equity

fund.

47. Investor D made one further purported investment as a result of Defendants'

scheme, sending another $14,000 to the Funding Group account in February 2011. Investor D

sent this money in response to an email from "Morris" falsely representing that Investor D could

sell his shares in asoon-to-be-public company (with common stock priced below $5 per share)

for a total of $952,196, but first needed to pay a $14,000 "transfer fee." He never heard from

"Morris" again. In an effort to find "Morris," Investor D reached out to Brian Quigley in early

2011. In May 2011, Brian Quigley emailed Investor D in furtherance of the scheme, lying as

follows: "Regarding Mr. Morris, I am sorry to inform you that we have heard that [he] was

killed in a motorcycle accident some months ago. We are actually looking for an address where

we could send our condolences. When we find one, we will send it to you as well." Investor D

never received the $952,196 or any other return on his purported "investments." All of his funds

were stolen by the Quigleys.

48. Based on the foregoing, including the fact that "James Morris" directed investors

to send funds to the same accounts to which Michael Quigley and Brian Quigley directed

investors to send funds, "James Morris" actually was, on information and belief, an alias used by

either Michael Quigley or Brian Quigley, or by both of them and/or by another individual with

whom Defendants acted in concert to perpetrate the fraudulent scheme described above.

49. Based on the foregoing, Defendants were, at the time of the misconduct alleged

above, participating in the offering of penny stocks, as such stocks are defined in Section

3(a)(51) of the Exchange Act and Rule 3a51-1 thereunder, by virtue of Defendants having

engaged in activities for purposes of the purported issuance or trading, and/or inducing or

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attempting to induce the purported purchase or sale of, a penny stock.

FIRST CLAIM FOR RELIEF

Violations of Section 17(a) of the Securities Act
(Both Defendants)

50. The Commission realleges and incorporates by reference herein each and every

allegation contained in paragraphs 1 through 49.

51. Defendants, directly or indirectly, singly or in concert, in the offer or sale of

securities and by the use of the means of instruments of transportation or communication in

interstate commerce, knowingly, recklessly, or negligently have: (a) employed devices, schemes,

or artifices to defraud; (b) obtained money or property by means of untrue statements of a

material fact or omissions of a material fact necessary in order to make the statement made, in

light of the circumstances under which they were made, not misleading; and/or (c) engaged in

transactions, practices, or courses of business which operated or would operate as a fraud or

deceit upon the purchaser.

52. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert,

have violated, and unless enjoined will again violate, Section 17(a) of the Securities Act [15

U.S.C. § 77q(a)].

SECOND CLAIM FOR RELIEF

Violations of Section 10(b) of the Exchange Act and Rule lOb-5
(Both Defendants)

53. The Commission realleges and incorporates by reference herein each and every

allegation contained in paragraphs 1 through 49.

54. Defendants, directly or indirectly, singly or in concert, in connection with the

purchase or sale of securities and by the use of the means or instrumentalities of interstate

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commerce or of the mails, or of the facilities of a national securities exchange, knowingly or

recklessly have: (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

statement made, in light of the circumstances under which they were made, not misleading;

and/or (c) engaged in acts, practices, or courses of business which operated or would operate as a

fraud or deceit upon other persons.

55. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert,

have violated, and unless enjoined will again violate, Section 10(b) of the Exchange Act [15

U.S.C. § 78j(b)] and Rule lOb-5 thereunder [17 C.F.R. § 240.1Ob-5].

PRAYER FOR RELIEF

WHEREFORE, the Commission respectfully requests a Final Judgment:

I.

Permanently enjoining both Defendants from committing the violations of the federal

securities laws alleged in this Complaint;

II.

Ordering Michael Quigley to disgorge the ill-gotten gains he obtained as a result of the

violations alleged in this Complaint, and ordering him to pay prejudgment interest thereon;

III.

Ordering Michael Quigley 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)];

IV.

Prohibiting both Defendants from participating in an offering of penny stock pursuant to

Section 20(g)(1) of the Securities Act [15 U.S.C. § 77t(g)(1)] and Section 21(d)(6)(A) of the

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Exchange Act [15 U.S.C. § 78u(d)(6)(A)]; and

V.

Granting such other and further relief as the Court may deem just and proper.

JURY DEMAND

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the Commission demands

trial by jury in this action of all issues so triable.

Dated: New York, New York
August 10, 2017

Respeft y submit

Andrew M. Calamari
Regional Director
Attorney for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
Howard A. Fischer, Senior Trial Counsel
New York Regional Office
200 Vesey Street, Suite 400
New York, New York 10281-1022
(212) 336-0589 (Fischer)
Email: [email protected]

Of Counsel:
Sanjay Wadhwa
George N. Stepaniuk
Michael Paley
Chevon Walker

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