SEC v. Joseph A. Padilla, No. LR-26234, District of Massachusetts (Feb. 3, 2025) — Press Release
raw: Joseph A. Padilla, et al.
Joseph A. Padilla, et al., No. 1:23-cv-11331 (Feb. 3, 2025)
summary
Joseph A. Padilla obtained a final judgment for a microcap stock fraud scheme involving offshore account concealment and market manipulation, resulting in a $3.1 million disgorgement.
paragraph
Joseph A. Padilla was found liable for a microcap fraud scheme that involved concealing major shareholders' identities through offshore accounts and manipulating stock prices. He was charged with violating the Securities Act of 1933 and the Securities Exchange Act of 1934. The final judgment requires him to pay $3,139,685 in disgorgement and $20,975 in interest, offset by a $3 million criminal case payment.
narrative
The SEC obtained a final judgment against Joseph A. Padilla for a fraudulent microcap stock scheme that utilized offshore brokerage accounts to hide the identities of dominant market participants. Padilla manipulated stock prices using his own accounts and those of family and friends, timing sales to coincide with promotional news announcements. He also enlisted a registered broker-dealer trader to facilitate the scheme. The judgment mandates $3,139,685 in disgorgement and $20,975 in interest, offset by a $3 million payment from a related criminal case. Padilla is permanently barred from penny stock offerings and is enjoined from most security issuances except for personal trading on national exchanges. This follows previous consent judgments against co-defendant Kevin Dills and four relief defendants.
Classified pump-and-dump(confidence 100%). EDGAR detection: forms S-8/S-1/424B/8-K· recall 69% / precision 12%. detection rule →
Statutes
Sections 5 and 17(a) of the Securities ActSections 5 and 17(a) of the Securities ActSection 10(b) of the Securities Exchange ActRule 10b-5
Parties
Securities and Exchange CommissionJoseph A. PadillaKevin C. DillsLife Sciences Journeys, Inc.Judge Donald L CabellArlene SandovalCarlos HernandezBright Star International, Inc.Ashley RobinsonJamie Quick
Keywords
padillastocksecurities exchangesecuritiesjoseph padillacommissionexchange commissionexchangejosephlitigationagainstschemestock salesalleges padillapadilla consented
Extracted insights
Dollar amounts 3
- $3.14M $3,139,685 $1M–$10M
- $3.00M $3 million $1M–$10M
- $21K $20,975 $10K–$100K
Entities 2
- agency Securities and Exchange Commission
- person stock sales
Triples 11
- Securities And Exchange Commission obtained judgment against defendant Joseph a. Padilla in a microcap fraud scheme
- Joseph a. Padilla enabled illegal stock sales by people who secretly held enough stock to dominate market for small publicly-traded companies
- Joseph a. Padilla hid identities of individuals by selling stock through offshore brokerage accounts he controlled under false names
- Joseph a. Padilla traded in his own and family/friends' brokerage accounts to manipulate stock prices
- Joseph a. Padilla enlisted a stock trader at a registered broker-dealer firm to facilitate stock trading
- Stock sales coincided with stock promotions or news announcements intended to gain investor interest
- Joseph a. Padilla consented to disgorgement $3,139,685 and prejudgment interest of $20,975 offset by $3 million from criminal case
- Joseph a. Padilla consented to injunction from violating Sections 5 and 17(a) of Securities Act of 1933 and Section 10(b) of Securities Exchange Act of 1934 and Rule 10b-5
- Judgment barred Joseph a. Padilla from participating in offering of penny stock
- Judgment enjoined Joseph a. Padilla from participating in issuance, purchase, offer, or sale of any security except for personal trades on national exchanges
- Securities And Exchange Commission obtained consent judgments against defendant Kevin Dills and four relief defendants
Extracted body text (2,569c)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26234 / February 3, 2025 Securities and Exchange Commission v. Joseph A. Padilla, et al., No. 1:23-cv-11331 (D. Mass. filed June 13, 2023) SEC Obtains Judgment Against Defendant in Microcap Fraud Scheme On January 21, 2025, the Securities and Exchange Commission obtained a final judgment against defendant Joseph A. Padilla in an action filed in 2023 alleging a fraudulent microcap stock selling scheme. According to the Commission’s complaint, filed in the United States District Court for the District of Massachusetts, Padilla knowingly enabled illegal stock sales by people who secretly held enough of the stock of various small publicly-traded companies to dominate the market for their stock. The complaint alleges that Padilla hid those individuals’ identities by selling stock for them through offshore brokerage accounts that he controlled, but that he opened in different names. The complaint further alleges that Padilla traded in his own brokerage account and accounts of family and friends to manipulate stock prices in support of the scheme. Padilla also allegedly enlisted a stock trader at a registered broker-dealer firm to facilitate stock trading as part of the scheme. According to the complaint, the stock sales coincided with stock promotions or news announcements intended to gain investor interest. Padilla consented to a final judgment holding him liable for disgorgement of $3,139,685 and prejudgment interest of $20,975, offset by $3 million that the Court ordered Padilla to pay in a related criminal case. Padilla also consented to the judgment permanently enjoining him from violating Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The judgment also permanently barred Padilla from participating in an offering of penny stock and permanently enjoined Padilla from participating in the issuance, purchase, offer, or sale of any security other than purchasing or selling securities listed on a national securities exchange for his own personal accounts. The Commission previously obtained consent judgments against defendant Kevin Dills and four relief defendants. The Commission’s case remains pending against two relief defendants. The litigation is being handled by Michael Moran, Kathleen Shields, Ryan Murphy, and Amy Gwiazda in the Boston Regional Office. For additional information, see Litigation Release No. 25745 (June 14, 2023) and Litigation Release No. 25952 (March 20, 2024).
OCR text (2,569c · html-text · 99% conf)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26234 / February 3, 2025 Securities and Exchange Commission v. Joseph A. Padilla, et al., No. 1:23-cv-11331 (D. Mass. filed June 13, 2023) SEC Obtains Judgment Against Defendant in Microcap Fraud Scheme On January 21, 2025, the Securities and Exchange Commission obtained a final judgment against defendant Joseph A. Padilla in an action filed in 2023 alleging a fraudulent microcap stock selling scheme. According to the Commission’s complaint, filed in the United States District Court for the District of Massachusetts, Padilla knowingly enabled illegal stock sales by people who secretly held enough of the stock of various small publicly-traded companies to dominate the market for their stock. The complaint alleges that Padilla hid those individuals’ identities by selling stock for them through offshore brokerage accounts that he controlled, but that he opened in different names. The complaint further alleges that Padilla traded in his own brokerage account and accounts of family and friends to manipulate stock prices in support of the scheme. Padilla also allegedly enlisted a stock trader at a registered broker-dealer firm to facilitate stock trading as part of the scheme. According to the complaint, the stock sales coincided with stock promotions or news announcements intended to gain investor interest. Padilla consented to a final judgment holding him liable for disgorgement of $3,139,685 and prejudgment interest of $20,975, offset by $3 million that the Court ordered Padilla to pay in a related criminal case. Padilla also consented to the judgment permanently enjoining him from violating Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The judgment also permanently barred Padilla from participating in an offering of penny stock and permanently enjoined Padilla from participating in the issuance, purchase, offer, or sale of any security other than purchasing or selling securities listed on a national securities exchange for his own personal accounts. The Commission previously obtained consent judgments against defendant Kevin Dills and four relief defendants. The Commission’s case remains pending against two relief defendants. The litigation is being handled by Michael Moran, Kathleen Shields, Ryan Murphy, and Amy Gwiazda in the Boston Regional Office. For additional information, see Litigation Release No. 25745 (June 14, 2023) and Litigation Release No. 25952 (March 20, 2024).