SEC v. Tobin Smith; and NBT Group Inc., No. LR-23504, District of Columbia (Mar. 29, 2016) — Press Release
raw: Tobin Smith, et al.
Tobin Smith, et al., No. 1:16-cv-00587 (Mar. 29, 2016)
Former TV commentator Tobin Smith and his company NBT Group Inc
Former TV commentator Tobin Smith and his company NBT Group Inc. settled SEC charges for orchestrating a fraudulent penny stock promotion scheme targeting IceWEB Inc., a data storage firm. The pair received $330,000 in cash and stock to promote IceWEB through misleading emails, blogs, and articles, while concealing that their compensation included over $250,000 in incentive fees tied to rising share prices and falsely claiming Smith had personally used and discovered the company. Their promotional materials contained false assertions about IceWEB’s technology, customer base, and valuation potential, despite knowing the company’s poor financial condition. Smith and NBT agreed to pay $165,900 in disgorgement, $16,893 in interest, and a $75,000 penalty, and are barred from future penny stock promotions, without admitting or denying the allegations. The SEC charged them with violations of Section 17(b) of the Securities Act and Section 10(b) and Rule 10b-5 of the Exchange Act.
Former TV commentator Tobin Smith and his company NBT Group Inc. settled SEC charges for orchestrating a fraudulent penny stock promotion scheme targeting IceWEB Inc., a data storage firm. The pair received $330,000 in cash and stock to promote IceWEB through misleading emails, blogs, and articles, while concealing that their compensation included over $250,000 in incentive fees tied to rising share prices and falsely claiming Smith had personally used and discovered the company. Their promotional materials contained false assertions about IceWEB’s technology, customer base, and valuation potential, despite knowing the company’s poor financial condition. Smith and NBT agreed to pay $165,900 in disgorgement, $16,893 in interest, and a $75,000 penalty, and are barred from future penny stock promotions, without admitting or denying the allegations. The SEC charged them with violations of Section 17(b) of the Securities Act and Section 10(b) and Rule 10b-5 of the Exchange Act. Former TV commentator Tobin Smith and his company NBT Group Inc. settled SEC charges for orchestrating a fraudulent penny stock promotion scheme targeting IceWEB Inc., a data storage company. The pair received $330,000 in cash and stock to promote IceWEB through misleading emails, blogs, and articles, while concealing that their compensation included over $250,000 in incentive fees tied to rising share prices and falsely claiming Smith had personally used and discovered the company. Their promotional materials contained false assertions about IceWEB’s technology, customer base, and valuation potential, despite knowing the company’s poor financial condition and lack of credible buyers. Smith and NBT agreed to pay $165,900 in disgorgement, $16,893 in interest, and a $75,000 penalty, and were barred from future involvement in penny stock promotions, without admitting or denying the allegations. The SEC charged them with violations of Section 17(b) of the Securities Act and Section 10(b) and Rule 10b-5 of the Exchange Act.
Exhibits & Attached Documents (1)
Extracted insights
- $200.00M $200 million $100M–$1B
- $330K $330,000 $100K–$1M
- $250K $250,000 $100K–$1M
- $166K $165,900 $100K–$1M
- $75K $75,000 $10K–$100K
- $17K $16,893 $10K–$100K
- company nbt group inc.
- person tobin smith
- Tobin Smith settled charges fraudulently promoting a penny stock to investors
- NBT Group Inc. settled charges fraudulently promoting a penny stock to investors
- SEC alleged Tobin Smith and NBT Group Inc. were paid to prepare and disseminate e-mails and online blogs
- Tobin Smith settled charges fraudulently promoting a penny stock to investors
- NBT Group Inc. settled charges fraudulently promoting a penny stock to investors
- SEC alleged Tobin Smith and NBT Group Inc. were paid to prepare and disseminate e-mails and online blogs
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 23504 / March 29, 2016 Securities and Exchange Commission v. Tobin Smith, et al., Civil Action No. 1:16-cv-00587 (U.S. District Court for the District of Columbia) Former Tv Commentator Settles Penny Stock Fraud Charges The Securities and Exchange Commission today announced that a former market analyst and TV news commentator has agreed to settle charges that he and his company fraudulently promoted a penny stock to investors. The SEC alleges that Tobin Smith and NBT Group Inc. were paid to prepare and disseminate e-mails, online blogs, articles, and other communications touting the stock of IceWEB Inc., a data storage company. Smith and NBT did not fully disclose their compensation to investors, who did not have the benefit of knowing that part of their pay was tied to a sustained increase in IceWEB's share price. The promotional material also contained false and misleading statements intended to artificially increase the trading volume and share price of IceWEB's stock. Smith and NBT agreed to be barred from involvement in any future penny stock offerings and must pay disgorgement of $165,900 plus $16,893 in interest. Smith also must pay a $75,000 penalty. According to the SEC's complaint filed in U.S. District Court for the District of Columbia: Smith entered into two separate agreements on NBT's behalf to promote IceWEB and its stock in exchange for $330,000 in cash and IceWEB stock. NBT could earn incentive fees of more than $250,000 if the marketing campaigns succeeded in increasing share price. Smith and NBT only disclosed some of their compensation and never informed investors that they would earn incentive fees if the stock price increased above a certain amount. Smith and NBT falsely stated in communications to subscribers that Smith discovered IceWEB when he was "searching for a solution" to his own company's "rapidly growing cloud data storage problem." In fact, Smith only "found" IceWEB after he was retained to promote the company. He did not actually use IceWEB for NBT data storage. Smith and NBT also falsely touted that IceWEB "provides the cheapest storage box and more important the lowest cost/highest performance solution to" public and private data storage centers including "Amazon cloud drive, Dropbox, Evernote, iCloud, Microsoft SkyDrive, Google Drive, SugarSync" and Facebook. Smith did not know whether any of these companies were actually IceWEB customers. Smith touted he could "easily make the case" for "10X Return â" $200 million valuation" on IceWEB given "what has been already paid for its competitors." But Smith made these projections despite being well aware of IceWEB's poor financial condition and knowing no company that was contemplating a purchase of IceWEB. The SEC's complaint charges Smith and NBT with violating the anti-touting and anti-fraud provisions of Section 17(b) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Smith and NBT neither admitted nor denied the allegations in the settlement, which is subject to court approval. The SEC's investigation was conducted by Yolanda Ochoa and Finola H. Manvelian and trial counsel are John Berry and Karen Matteson in the Los Angeles office. The SEC appreciates the assistance of the Financial Industry Regulatory Authority. # # # SEC Investor Alert: Fraudulent Stock Promotions SEC Complaint
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 23504 / March 29, 2016 Securities and Exchange Commission v. Tobin Smith, et al., Civil Action No. 1:16-cv-00587 (U.S. District Court for the District of Columbia) Former Tv Commentator Settles Penny Stock Fraud Charges The Securities and Exchange Commission today announced that a former market analyst and TV news commentator has agreed to settle charges that he and his company fraudulently promoted a penny stock to investors. The SEC alleges that Tobin Smith and NBT Group Inc. were paid to prepare and disseminate e-mails, online blogs, articles, and other communications touting the stock of IceWEB Inc., a data storage company. Smith and NBT did not fully disclose their compensation to investors, who did not have the benefit of knowing that part of their pay was tied to a sustained increase in IceWEB's share price. The promotional material also contained false and misleading statements intended to artificially increase the trading volume and share price of IceWEB's stock. Smith and NBT agreed to be barred from involvement in any future penny stock offerings and must pay disgorgement of $165,900 plus $16,893 in interest. Smith also must pay a $75,000 penalty. According to the SEC's complaint filed in U.S. District Court for the District of Columbia: Smith entered into two separate agreements on NBT's behalf to promote IceWEB and its stock in exchange for $330,000 in cash and IceWEB stock. NBT could earn incentive fees of more than $250,000 if the marketing campaigns succeeded in increasing share price. Smith and NBT only disclosed some of their compensation and never informed investors that they would earn incentive fees if the stock price increased above a certain amount. Smith and NBT falsely stated in communications to subscribers that Smith discovered IceWEB when he was "searching for a solution" to his own company's "rapidly growing cloud data storage problem." In fact, Smith only "found" IceWEB after he was retained to promote the company. He did not actually use IceWEB for NBT data storage. Smith and NBT also falsely touted that IceWEB "provides the cheapest storage box and more important the lowest cost/highest performance solution to" public and private data storage centers including "Amazon cloud drive, Dropbox, Evernote, iCloud, Microsoft SkyDrive, Google Drive, SugarSync" and Facebook. Smith did not know whether any of these companies were actually IceWEB customers. Smith touted he could "easily make the case" for "10X Return â" $200 million valuation" on IceWEB given "what has been already paid for its competitors." But Smith made these projections despite being well aware of IceWEB's poor financial condition and knowing no company that was contemplating a purchase of IceWEB. The SEC's complaint charges Smith and NBT with violating the anti-touting and anti-fraud provisions of Section 17(b) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Smith and NBT neither admitted nor denied the allegations in the settlement, which is subject to court approval. The SEC's investigation was conducted by Yolanda Ochoa and Finola H. Manvelian and trial counsel are John Berry and Karen Matteson in the Los Angeles office. The SEC appreciates the assistance of the Financial Industry Regulatory Authority. # # # SEC Investor Alert: Fraudulent Stock Promotions SEC Complaint