SEC v. Steve A. Smith, Jr.; and Xtreme Fighting Championships, Inc., No. 1:24-cv-24802, Eastern District of New York (Dec. 10, 2024) — Complaint

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CIVIL ACTION NO. 1:24cv24802

SECURITIES AND EXCHANGE
COMMISSION,

   Plaintiff,

            v.

STEVE A. SMITH, JR. AND XTREME
FIGHTING CHAMPIONSHIPS, INC.

                                    Defendants.

            COMPLAINT
            JURY            TRIAL            DEMANDED
 Plaintiff, Securities and Exchange Commission (the “Commission”), alleges the
following against defendants Steve A. Smith, Jr. (“Smith”) and Xtreme Fighting Championships,
Inc. (“Xtreme Fighting”) (together, “Defendants”):
SUMMARY
1. From approximately January 2020 through at least April 2022, Smith and Xtreme
Fighting engaged in a fraudulent scheme to illegally sell large amounts of Xtreme Fighting stock
to the investing public.  In January 2020, Smith acquired control of Xtreme Fighting and became
its chief executive officer.  Xtreme Fighting was a small company with stock traded in the over-
the-counter securities market.  Smith immediately began a fraudulent scheme to sell Xtreme
Fighting’s stock.  The stock sales were illegal because Smith and Xtreme Fighting’s in-house
counsel, who has since died, controlled the stock and sold it in transactions that were neither
registered with the Commission nor exempt from registration.  Smith and the in-house counsel

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hid their control of the stock to avoid legal limits on sales by insiders.  The scheme generated
over $5 million in illegal proceeds, of which Xtreme Fighting received at least $436,000.
2. To further the scheme, in April 2022, Smith and Xtreme Fighting publicly filed an
annual report on Commission Form 10-K falsely stating that Xtreme Fighting’s financial
statements were audited by an independent registered public accounting firm.  Public companies
that file annual reports with the Commission on Form 10-K are required to include audited
financial statements.  Smith made the false filing because Xtreme Fighting’s annual report had
been delinquent.  This delinquency had caused Xtreme Fighting’s stock to move to a more
restricted portion of the over-the-counter securities market, designated for companies that do not
make current information publicly available.  Despite warnings from Xtreme Fighting’s auditing
firm that the audited financial statements were not complete or close to being complete, Smith
proceeded with filing the Form 10-K with the purpose and effect of removing Xtreme Fighting
stock from the more restrictive area of the market.
VIOLATIONS
3. By virtue of the conduct alleged herein, Smith and Xtreme Fighting violated
Sections 5(a), 5(c), 17(a)(1), and 17(a)(3) of the Securities Act of 1933 (“Securities Act”) [15
U.S.C. §§ 77e(a), 77e(c), 77q(a)(1), and 77q(a)(3)], and Section 10(b) of the Securities Exchange
Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rules 10b-5(a), (b), and (c) thereunder
[17 C.F.R. §§ 240.10b-5(a)-(c)].  Xtreme Fighting further violated Section 17(a)(2) of the
Securities Act [15 U.S.C. § 77q(a)(2)] and Smith aided and abetted that violation.
NATURE OF THE PROCEEDING AND RELIEF SOUGHT
4. The Commission brings this action pursuant to the authority conferred upon it by
Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Section 21(d)(1) of the Exchange

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Act [15 U.S.C. § 78u(d)(1)].
5. The Commission seeks: (i) against Defendants, permanent injunctions, enjoining
them from engaging in the transactions, acts, practices, and courses of business alleged in this
Complaint, including enjoining them from committing or engaging in specified actions or
activities relevant to violations charged herein; (ii) against Defendants, disgorgement of all ill-
gotten gains from the unlawful conduct set forth in this Complaint, together with prejudgment
interest, under Sections 21(d)(5) and (7) of the Exchange Act [15 U.S.C. §§ 78u(d)(5) and (7)];
(iii) against Defendants, civil 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) against Smith,
an order barring him from participating in any offering of a penny stock, pursuant to Section
20(g) of the Securities Act [15 U.S.C. § 77t(g)] and/or Section 21(d)(6) of the Exchange Act [15
U.S.C. § 78u(d)(6)]; (v) against Smith, an order enjoining him from directly or indirectly
participating in the issuance, purchase, offer or sale of any security, provided that such injunction
shall not prevent him from purchasing or selling securities listed on a national exchange for his
own personal accounts; (vi) against Smith, an order barring him from acting as an officer or
director of any public company, pursuant to Section 20(e) of the Securities Act [15 U.S.C. §
77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)]; and (vii) such other
relief as the Court may deem appropriate.
JURISDICTION AND VENUE
6. This Court has jurisdiction over this action pursuant to Sections 20(d)(1) and
22(a) of the Securities Act [15 U.S.C. §§ 77t(d)(1) and 77v(a)] and Sections 21(d), 21(e), and 27
of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), 78aa].  Venue lies 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

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U.S.C. § 78aa].  Smith is a resident of this district, and Xtreme Fighting has maintained its
principal place of business in this district.
7. In connection with the transactions, acts, practices, and courses of business
alleged in this Complaint, Defendants, directly or indirectly, singly or in concert, made use of the
means or instrumentalities of transportation or communication in interstate commerce, or the
mails.
DEFENDANTS
8. Smith, age 50, is a resident of Miami, Florida.  In a public filing made with the
Commission on or about January 24, 2020, Xtreme Fighting—then known as Duke Mountain
Resources, Inc. (“Duke Mountain”)—announced Smith’s election to its board of directors and
appointment as its president and CEO.  Thereafter, Smith signed annual, quarterly, and other
periodic reports that Xtreme Fighting filed with the Commission.
9. Xtreme Fighting is a Nevada corporation headquartered in Miramar Beach,
Florida.  During the period relevant to this Complaint, Xtreme Fighting’s common stock was
quoted on OTC Link operated by OTC Markets Group, Inc. (“OTC Markets”) under the ticker
symbol “XFCI.”  Xtreme Fighting was known as Duke Mountain until July 2020, and was
previously quoted on OTC Link with the symbol “DKMR.”  Xtreme Fighting describes itself as
a sports entertainment and media company that produces, promotes, and broadcasts mixed
martial arts fighting events.  During the period relevant to this complaint, Xtreme Fighting filed
periodic reports with the Commission, including annual reports on Form 10-K, quarterly reports
on Form 10-Q, and other interim reports on Form 8-K.  Those reports were available to the
investing public via the Commission’s public website.

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RELEVANT INDIVIDUALS AND ENTITIES
10. Christopher K. Davies (“Davies”) was a close friend of Smith.  Davies died in
September 2022.  Davies was licensed as an attorney in Illinois until his suspension in 2015.  In
April 2018, the Commission filed a civil action alleging securities fraud against Davies in the
United States District Court for the Eastern District of New York.  SEC v. Christopher K.
Davies, et al., No. 18-cv-2323 (E.D.N.Y., filed April 18, 2018).  The Commission alleged that
Davies fraudulently controlled a penny stock company from behind the scenes and made false
statements about its business plans and operations so he could illegally obtain millions of shares,
which he planned to profit on by selling into the securities markets.  The court entered a default
judgment against Davies on February 23, 2022.  In a criminal action involving related conduct,
Davies was indicted in the Eastern District of New York on August 30, 2018.  U.S. v. Davies,
No. 18-cr-479 (E.D.N.Y.).  Davies pleaded guilty on May 28, 2019 to one count of conspiracy to
commit securities fraud, in violation of 17 U.S.C. § 78j(b).  On March 2, 2022, the Commission
issued an order suspending Davies from appearing or practicing before the Commission.  Davies
therefore could not legally prepare Commission filings such as Xtreme Fighting’s annual reports
on Form 10-K.  Davies, however, acted as “counsel” for Xtreme Fighting, by using a
pseudonym, “Jim Barnes.”  Xtreme Fighting identified “Barnes” as company counsel in a public
filing signed by Smith.  Smith knew that Davies used the “Barnes” pseudonym.
11. Emerald Coast Investments, Inc. (“Emerald Coast”) was a Florida corporation
with a mailing address at Smith’s residence.  Emerald Coast’s corporate filings listed Smith as an
officer and director, and an Xtreme Fighting public filing described Smith as “principal” of
Emerald Coast.  Smith and Davies used Emerald Coast as a front company or nominee to
illegally sell shares of Duke Mountain and Xtreme Fighting stock.

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12. Eastern Dutch Enterprises, Ltd. (“Eastern Dutch”) was a corporation
purportedly incorporated in St. Kitts and Nevis.  Davies and Smith used Eastern Dutch as a front
company or nominee to sell shares of Xtreme Fighting in the public market.  A person with
whom Davies had a close personal relationship (“Individual A”), was the purported CEO of
Eastern Dutch.  In reality, Davies controlled Eastern Dutch and directed Individual A’s activities,
including trading in brokerage accounts and wiring trading proceeds to bank accounts that
Davies controlled.
13. Marlin Media, Inc. (“Marlin Media”) was a corporation purportedly
incorporated in St. Kitts and Nevis.  Davies and Smith used Marlin Media as a front company or
nominee to sell shares of Xtreme Fighting in the public market.  Another person with whom
Davies had a close personal relationship (“Individual B”) was the purported CEO of Marlin
Media.  Davies controlled Marlin Media and directed Individual B’s activities, including trading
and wiring trading proceeds.
14. Valor Capital was incorporated in the Cayman Islands in 2017.  Valor Capital
registered as a broker-dealer with the Cayman Islands Monetary Authority by no later than
January 2020.
15. Joseph A. Padilla is an individual charged by the Commission in June 2023,
alleging that he illegally sold stock of several microcap companies, including Xtreme Fighting.
SEC v. Padilla, 23-cv-11331-RGS (D. Mass. filed June 13, 2023).  The Commission’s complaint
included allegations that Padilla engaged in a fraudulent scheme for individuals who paid Padilla
to arrange illegal stock sales.  The complaint alleged that those individuals hid their identities
through offshore accounts at Valor Capital in different names that Padilla arranged, which the
complaint described as “Padilla Nominees.”  The Commission and Padilla reached a settlement,

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and the court entered a consent judgment on November 8, 2024.  The U.S. Attorney’s Office for
the District of Massachusetts indicted Padilla on March 21, 2023 for conduct partially related to
the Commission’s action.  Padilla pled guilty on August 3, 2023 to securities fraud for conduct
relating to two companies, not Xtreme Fighting.  U.S. v. Padilla, 23-cr-10075-RGS, ECF No.
136 (D. Mass.).  As part of an agreed-upon statement of facts, Padilla admitted that Valor Capital
was a Cayman Islands broker with which he had “a close, unofficial association.”
BACKGROUND
16. Xtreme Fighting stock was traded at all relevant times in the over-the-counter
penny stock market.  A “penny stock” generally refers to stock of companies with low market
capitalizations and stock that trades at less than $5 per share.  As described below, Smith
illegally sold “restricted stock” that was restricted because it was originally issued by Xtreme
Fighting (or its predecessor, Duke Mountain) in a private transaction that was not registered with
the Commission.  The stock certificates for restricted shares include a legend indicating that they
are restricted, and that legend must be removed by the stock issuer’s transfer agent before the
stock can be legally resold to the public.  Smith’s scheme involved having Xtreme Fighting’s
transfer agent remove restrictive legends from stock shares on false pretenses.
17. Absent an exemption under the federal securities laws and rules, restricted stock
cannot legally be offered or sold to the public unless a securities registration statement has been
filed with the Commission (for an offer) or is in effect (for a sale).  Such registration statements
are often filed with the Commission on Form S-1 and are often referred to as “S-1 registration
statements.”  S-1 registration statements contain important information about an issuer’s business
operations, financial condition, results of operation, risk factors, and management.  They also

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disclose any person or group who is the beneficial owner of more than 5% of the company’s
securities.
18. An “affiliate” of an issuer is a person or entity, like Smith and Davies, who
directly or indirectly through one or more intermediaries, controls, is controlled by, or is under
common control with, such issuer (i.e., a control person).  “Control” means the power to direct
the management and policies of the company in question.  Affiliates include officers, directors,
and controlling shareholders, as well as any person who is under “common control” with, or has
common control of, an issuer.
19. Smith and Xtreme Fighting’s scheme involved a fraudulent effort to use a safe
harbor provided by Rule 144 under the Securities Act [17 C.F.R. § 240.144] for holders of
restricted stock to sell shares to the public in unregistered transactions.  Rule 144 requires the
holder of restricted stock to hold the shares for a minimum period of time before reselling them.
It also includes a volume limitation on resales by affiliates, like Smith or Davies, which limits
them to selling only small amounts of stock at any one time in unregistered transactions.  Smith
engaged in fraudulent conduct to make it appear that Emerald Coast had held Duke
Mountain/Xtreme Fighting shares for the requisite holding period.  Further, Smith sold shares of
Duke Mountain/Xtreme Fighting, through Emerald Coast, in an amount that exceeded the
volume limitation.  Smith also facilitated illegal sales by Davies in excess of the volume
limitation.
20. A “transfer agent” is a company which, among other things, issues and cancels
certificates of a company’s stock to reflect changes in ownership.  Many companies that have
publicly traded securities use transfer agents to keep track of the individuals and entities that own
their stock.  Transfer agents routinely keep track of whether shares are restricted from resale.
 

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Before removing restrictive legends from stock, transfer agents often require an opinion letter
from an attorney representing that shares are eligible for public resale pursuant to an exemption
from registration.
21. OTC Markets is a stock quotation service that facilitates over-the-counter trading
of shares in small companies that are not listed on national securities exchanges (like NASDAQ
or the New York Stock Exchange).  OTC Markets operates OTC Link (previously known as
“Pink Sheets”) to provide price quotes on stock traded in the over-the-counter market.  Xtreme
Fighting’s stock was quoted on OTC Link with the symbol “XFCI” or “DKMR” as it was
previously known.
22. From January 2020 through January 2022, Smith caused or recklessly allowed
Xtreme Fighting to issue millions of shares of stock for the purpose of public distribution, in
transactions that were not registered with the Commission.  The stock should have been
restricted and ineligible for public resale unless there was a valid exemption to registration,
which there was not.  Smith and Davies, however, arranged for Xtreme Fighting to issue the
stock to Emerald Coast, Eastern Dutch, and Marlin Media—entities purportedly unaffiliated with
Xtreme Fighting but, in reality, controlled by Smith and/or Davies.  The issuance of stock to
purportedly unaffiliated entities created a false appearance that the stock was exempt from
registration and eligible for public resale.
23. The illegal sales of stock arranged by Smith and Davies took place while Xtreme
Fighting was actively promoting its brand through a series of press releases.  The press releases
included announcements of upcoming mixed martial arts fights and deals to broadcast fights on
well-known television networks.  During the period of the scheme, Xtreme Fighting issued
dozens of press releases.

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SMITH’S ACQUISITION OF
XTREME FIGHTING AND ILLEGAL SALES OF ITS STOCK
24. As of November 2019, Xtreme Fighting’s predecessor company, Duke Mountain,
described itself as a mineral exploration company that in 2014 had ceased operations and was
“currently a non-operating shell company.”  Duke Mountain described its business purpose, as of
its annual report for 2019, to be “to serve as a vehicle to effect a merger, exchange of capital
stock, asset acquisition, or other business combination.”
25. On or about January 24, 2020, Duke Mountain publicly reported the resignation
of the individual who had served as Chief Executive Officer, Chief Financial Officer, and
Director of the company.  Duke Mountain announced Smith’s election as a member of its board
of directors and his appointment as President and CEO.  Duke Mountain also announced that its
majority shareholder had sold a controlling interest in the company to Smith.
26. In a quarterly report for the quarter ended March 31, 2020, filed with the
Commission on May 21, 2020, Duke Mountain announced that on January 30, 2020, it had
entered into a Securities Purchase Agreement to acquire 800,000,000 shares of Xtreme Fighting.
In a quarterly report for the quarter ended June 30, 2020, filed with the Commission on August
26, 2020, Duke Mountain announced that it had acquired the rights to “Xtreme Fighting
Championships, Inc., the largest independent mixed martial arts organization in the world” and
changed its name to Xtreme Fighting Championships, Inc.
27. On or about January 14, 2020, Duke Mountain issued 20 million shares of stock
to Emerald Coast.  Ten days later, on or about the same day that Duke Mountain announced
Smith’s takeover, Emerald Coast sold or purported to sell,
 for unspecified “value received,”
15 million of its 20 million shares to Valor Capital in the Cayman Islands.  Smith acted on behalf
of Emerald Coast for its transfer of the 15 million shares to Valor Capital.  The shares should

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have remained restricted and unavailable for public resale because they were controlled by
Smith, who, by the time of the transfer, was an affiliate of Duke Mountain.  Emerald Coast’s
transfer of 15 million shares to Valor Capital, at Smith’s direction, was part of an illegal
distribution of stock to the public.
28. Emerald Coast transferred the 15 million Duke Mountain shares to Valor Capital
after Duke Mountain’s transfer agent removed restrictive legends from the stock.  The transfer
agent removed the legends after receiving fraudulent information.  The transfer agent records
included a December 18, 2019 letter to the transfer agent from an attorney purportedly
representing Emerald Coast, opining that the 20 million shares could be sold without restriction.
The December 18, 2019 letter was fabricated.  It was not authored by the attorney whose
letterhead and signature appeared upon it, and the letterhead included a phone number unrelated
to the attorney.  Davies likely authored the fabricated opinion letter, and Smith knew or was
reckless in not knowing that Davies prepared such a letter—in September 2021 Davies copied
Smith on an email exchange involving Davies’s preparation of an opinion letter relating to a
different company’s stock, but on the same attorney’s letterhead.
29. According to the fabricated December 18, 2019 attorney opinion letter, Duke
Mountain issued the 20 million shares to Emerald Coast to reduce the outstanding balance on
convertible debt issued in 2012 to Emerald Coast by a subsidiary of Duke Mountain.  The letter
attached a December 10, 2019 “Share Purchase Agreement and Assignment and Assumption of
Debt,” according to which Duke Mountain purportedly acquired the subsidiary and assumed its
debt to Emerald Coast.  Smith signed the agreement as president of Duke Mountain, even though
he purportedly did not become a Duke Mountain officer until more than a month later.  “Jim
Barnes,” which Smith knew to be a pseudonym for Davies, signed for Emerald Coast.  Emerald

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Coast’s purported acquisition of Duke Mountain stock through the conversion of debt dating to
2012 created a false appearance that Emerald Coast had acquired stock that was eligible for
resale in the public markets.
30. After Emerald Coast transferred 15 million Duke Mountain shares to Valor
Capital, Valor Capital deposited the shares in an account of a Padilla Nominee.  The Padilla
Nominee account immediately sold some of the shares in the public market and transferred other
shares to other customer accounts.  Between January 2020 and September 2020, various
accounts at Valor Capital sold 9 million of the 15 million shares in the public markets.
31. The timing of the deposit and sales at Valor Capital corresponded to press
releases issued by Duke Mountain.  On February 4, 2020, Duke Mountain issued a press release
titled “XFC IS BACK.”  Duke Mountain announced its “latest investment into the sports
entertainment market of mixed martial arts as the lead investor of Xtreme Fighting
Championships, Inc.”  The release quoted Smith as saying “I am excited to announce that we are
bringing the XFC back this year! . . . .  [W]e have made many strategic changes that have created
a new vision and stability for XFC that will enable the organization to rise to the pinnacle of
combat sports.”  On February 25, 2020, Duke Mountain issued another press release, again with
quotes from Smith, and announced that Xtreme Fighting had secured broadcast contracts to
televise its events.  An account at Valor Capital sold 20,000 shares on February 7, 2020 and
another 20,000 shares on February 21, 2020, relative to overall market trading volume for Duke
Mountain shares of 55,988 and 36,700 shares on those respective dates.
32. In 2021, Smith and Xtreme Fighting attempted to paper over the illegal sale of
15 million shares via Valor Capital.  In a description of related party transactions in Xtreme
Fighting’s annual report for fiscal year 2020, publicly filed with the Commission on or about

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September 20, 2021 and signed by Smith, Xtreme Fighting described Duke Mountain’s
purported assumption of Emerald Coast debt in January 2020.  The annual report now described
Smith as “principal” of Emerald Coast and claimed that Emerald Coast had forgiven the debt that
Duke Mountain owed to it.  The annual report also stated that during 2020 Emerald Coast had
been issued 27,000,000 shares “for services.”  In fact, the only shares issued to Emerald Coast in
2020 were the 20 million shares issued in January 2020 and another 7 million issued in October
2020.  The statements in the annual report were false because Xtreme Fighting (then Duke
Mountain) had issued the 20 million shares in purported conversion of existing debt, not “for
services” rendered, and Emerald Coast had not forgiven the debt.  It had instead purportedly
converted the debt as a basis to sell 15 million shares of resulting stock to the public via Valor
Capital.
PROCEEDS TO XTREME FIGHTING FROM ILLEGAL STOCK SALES
33. Smith and Davies later arranged for Xtreme Fighting to issue shares to Eastern
Dutch and Marlin Media, which were entities that Davies secretly controlled.  Davies arranged
for Individual A and Individual B to act as nominal president or CEO of Eastern Dutch and
Marlin Media.  Eastern Dutch and Marlin Media deposited and sold over 32 million shares of
Xtreme Fighting stock between September 2020 and February 2022, and received over
$5.4 million in illegal proceeds.  Davies controlled and directed Individual A’s and Individual
B’s activities, including trading Xtreme Fighting stock and transferring proceeds from the stock
sales to Davies and Xtreme Fighting.
34. In October 2020, Xtreme Fighting issued 7 million shares each to Emerald Coast
and Eastern Dutch.  Smith, in his capacity as CEO of Xtreme Fighting, signed a letter to Xtreme
Fighting’s transfer agent on Xtreme Fighting letterhead falsely stating that neither Emerald Coast

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nor Eastern Dutch was an affiliate of Xtreme Fighting.  Smith’s letter further represented that the
shares were “free-trading,” i.e., unrestricted and available for resale in the public securities
markets.  The shares, however, should have remained restricted because they were controlled by
Smith and Davies.  Smith’s letter also falsely stated that “[t]here is no agreement or any other
arrangement” between or among Xtreme Fighting, Emerald Coast, and/or Eastern Dutch “to
remit any portion of the proceeds from the resale of the Shares” to Xtreme Fighting.
35. In January 2021, Emerald Coast transferred another approximately 7 million
shares to Eastern Dutch.  Xtreme Fighting’s transfer agent issued the stock to Eastern Dutch
without a restrictive legend after receiving another letter on Xtreme Fighting letterhead, again
signed by Smith in his capacity as CEO of Xtreme Fighting, falsely representing that the shares
were “free-trading.”  The shares, however, should have remained restricted because they were
controlled by Smith and Davies.
36. Eastern Dutch, acting at Davies’s direction, deposited 7 million shares on or about
October 27, 2020 and 7 million shares on or about January 14, 2021 at another Cayman Islands
broker-dealer (the “Second Cayman Broker-Dealer”).  For the deposits, Eastern Dutch provided
the Second Cayman Broker-Dealer with a letter to Xtreme Fighting’s transfer agent on Xtreme
Fighting letterhead, signed by Smith in his capacity as CEO of Xtreme Fighting.  The letter
falsely stated that neither Emerald Coast nor Eastern Dutch was an affiliate of Xtreme Fighting.
The letter also falsely stated that “[t]here is no agreement or any other arrangement between
[Xtreme Fighting] and [Emerald Coast] or the other nonaffiliated parties to remit any portion of
the proceeds from the resale of the Shares to [Xtreme Fighting].”
37. Immediately after depositing the shares in October 2020 and January 2021,
Eastern Dutch, acting at Davies’s direction, began selling them via the Second Cayman Broker-

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Dealer in the public securities markets.  Between October 27, 2020 and January 22, 2021,
Eastern Dutch sold over 12.7 million shares of Xtreme Fighting stock, for proceeds of over
$1.7 million.  On or about January 22, 2021, Eastern Dutch, again acting at Davies’s direction,
sent $336,000 of the stock sale proceeds to Xtreme Fighting.
38. In March 2021, Xtreme Fighting issued 10 million purportedly “free-trading”
shares of Xtreme Fighting stock to Marlin Media.  The transfer agent issued the stock to Marlin
Media without restrictive legend after receiving a letter on Xtreme Fighting letterhead, signed by
Smith in his capacity as CEO of Xtreme Fighting, dated February 2, 2021.  According to the
letter, Marlin Media purportedly acquired the 10 million shares from Emerald Coast.  The letter
falsely represented that neither Emerald Coast nor Marlin Media was an affiliate of Xtreme
Fighting.  The shares should have been restricted because they were controlled by Smith and
Davies.  Smith’s letter falsely represented that “[t]here is no agreement or any other arrangement
between [Xtreme Fighting], [Emerald Coast] or Marlin Media, Inc. and there has never been any
agreement or arrangement to remit any portion of the proceeds from the resale of the Shares to
[Xtreme Fighting].”
39. Marlin Media, acting at Davies’s direction, deposited the 10 million shares on or
about April 6, 2021 at the Second Cayman Broker-Dealer and, in connection with the deposit,
provided the broker-dealer with a copy of Smith’s February 2, 2021 letter.
40. Immediately after depositing the shares, Marlin Media, acting at Davies’s
direction, began selling them in the public securities markets.  Between April 7, 2021 and May
10, 2021, Marlin Media sold over 5.4 million shares of Xtreme Fighting stock for proceeds of
over $536,000.  On or about May 10, 2021, Marlin Media, acting at Davies’s direction, sent
$100,000 of the sales proceeds to Xtreme Fighting.

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ILLEGAL SALES VIA A PADILLA NOMINEE AND
SMITH’S FILING OF A FRAUDULENT ANNUAL REPORT
41. On January 12, 2022, Xtreme Fighting issued 10 million shares each to four
entities secretly controlled by Davies, including Marlin Media.  The transfer agent issued the
stock after receiving a letter on Xtreme Fighting letterhead, signed by Smith, representing that
the stock derived from a conversion of debt owed to Emerald Coast.  Smith’s letter falsely
represented that Emerald Coast, Marlin Media, and the other entities controlled by Davies were
not affiliates of Xtreme Fighting.  Smith again represented falsely that the shares were “free
trading.”  In March 2022, Marlin Media, sold, or purported to sell, its 10 million shares to Smith
Corona S.A. de C.V. (“Smith Corona”), which was a Padilla client or a Padilla Nominee with an
account at Valor Capital.
42. Smith and Davies orchestrated the delivery of Xtreme Fighting shares to Smith
Corona but took steps to distance themselves from the transaction.  They delivered the shares to
Smith Corona to share in Smith Corona’s trading proceeds and/or to maintain an active market in
Xtreme Fighting stock.  On Friday, March 4, 2022, Smith emailed Xtreme Fighting’s transfer
agent to say that he approved of the transfer from Marlin Media to Smith Corona.  After the
transfer agent responded to Smith with a list of required documentation, Smith forwarded the
email to Davies and Individual B, writing “[w]e need to get this sorted out today/Monday so we
can get these shares moved.”
43. On Monday, March 7, 2022, Smith received an email from someone acting on
behalf of Smith Corona, instructing Smith on the documentation that would be necessary for the
transfer agent to transfer shares from Marlin Media to Smith Corona.  The sender of the email
wrote to Smith that if Marlin Media did not have an email address, they could use a Smith
Corona address to contact the transfer agent.  Smith forwarded the message to a “Jim Barnes”

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email address for Davies, who sent it to Individual B with instructions to complete the paperwork
and send it to Xtreme Fighting’s transfer agent.  Davies wrote to Individual B, “Please BCC
Steve and Me. Must copy us under BCC so no one sees us.”
44. Also on March 7, 2022, Smith wrote to Davies, “Need the name and address of
the broker for Smith Corona.  Send it to [Individual B] so she can complete the Stock Power.”
The “Stock Power” was a reference to a transfer agent form, ultimately signed by Individual B,
authorizing the transfer of shares from Marlin Media to Smith Corona.
45. The transfer agent ultimately moved the 10 million shares from Marlin Media to
Smith Corona on March 11, 2022, after receiving documentation signed by Individual B.
46. On April 19, 2022, OTC Markets recategorized Xtreme Fighting’s stock to a more
restrictive trading level after Xtreme Fighting failed to file a timely annual report.  Xtreme
Fighting was delinquent in filing its annual report on Commission Form 10-K because its 2021
financial statements had not been audited by an independent registered public accounting firm.
Public companies that file annual reports with the Commission on Form 10-K are required to
include audited financial statements.
47. OTC Markets uses market designations and informational “flags” associated with
risks of particular securities.  The “Pink Current” designation is applied to issuers that are current
with reporting obligations.  The “Pink Limited Information” designation is applied to issuers that
are delinquent in reporting obligations, and OTC Markets applies a “yield” sign icon next to such
securities on its website.  On April 19, 2022, OTC Markets changed Xtreme Fighting’s
designation to Expert Market, which is a more restrictive tier of the over-the-counter market for
stock of companies that do not make current information publicly available.

18
 
48. On or about April 13, 2022, Smith emailed Xtreme Fighting’s audit firm
regarding the filing of Xtreme Fighting’s annual report on Commission Form 10-K and said,
“[o]bviously we need this filed by the Friday deadline.”  Smith copied Davies, acting as “Jim
Barnes,” who represented himself to the auditor as Xtreme Fighting’s counsel.  Davies, acting as
“Barnes,” replied to Smith’s email and said to the auditor, “[W]e need to file before a yield sign
is placed on our stock symbol. Which could happen if we do not file our 10K on Monday or
Tuesday.”
49. On or about April 13, 2022, a representative from the audit firm emailed Smith a
list of items required for the audit, such as financial information and supporting documentation.
The representative wrote, “I need documentation. . . . We also need to do confirmations and the
like.  Confirmations take weeks to get back at best. . . . Staff has to be able to get through all of
this before you can file.”
50. Ignoring the auditor, Smith signed and caused to be filed Xtreme Fighting’s 2021
Form 10-K on or about April 21, 2022, two days after Xtreme Fighting was moved to the Expert
Market because of its delinquent filing.  The Form 10-K stated that Xtreme Fighting had
appointed the new auditor to perform audit services for fiscal year 2021, purported to include
“audited” financial statements for the 2020 and 2021 fiscal years, and referred to “[t]he report of
our independent registered public accounting firms that accompanies our audited consolidated
financial statements for the year ended December 31, 2021.”  These statements were false
because the new auditor had not completed an audit of Xtreme Fighting’s financial statements
for 2021.
51. Smith publicly posted on social media about the Form 10-K on April 20, 2022,
writing, “XFCI is filing its audited 10k now with the SEC, it should appear tomorrow.”  In a

19
 
second post that day, he said, “Now that the heavy lifting of SEC audited financials is handled,
we can again focus on the fight business of XFC.”  These statements were false because Xtreme
Fighting’s financials had not been audited.
52. After Smith and Xtreme Fighting filed the Form 10-K, OTC Markets upgraded its
designation of Xtreme Fighting to Pink Current on April 22, 2022, thus removing the market
restriction that Smith and Davies had wanted to avoid.
53. The day after the filing, Xtreme Fighting’s auditor resigned.  In a letter to Smith,
the auditor made clear that it had not even started the 2021 audit.  The auditor told Smith that it
had “specifically responded to you that you did not have our permission or authorization to file
the 10K but you filed this disregarding our expressly not granting permission to file.”
54. The letter from the auditor to Smith also stated that the auditor had learned that
“Jim Barnes” was Davies using a false name, and expressed concern that Xtreme Fighting’s
counsel “in actuality is a person that has been suspended from involvement in public reporting
entities by the SEC.”  Smith, however, persisted with the “Barnes” ruse after Davies died in
September 2022.  Smith signed a current report on Form 8-K, filed with the Commission in April
2023, announcing the departure and appointments of certain officers and noting that “Jim
Barnes” had died.
55. On or about April 27, 2022, Valor Capital deposited into the account of
Bangatron SA de CV, another Padilla client or Padilla Nominee, the 10 million shares that
Marlin Media had transferred to Smith Corona, and the account began selling the shares in the
public securities markets on May 6, 2022.
56. On May 10, 2022, Xtreme Fighting filed an amended 2021 Form 10-K that it said
was “soley [sic] for the purpose of (i) reflecting that our financial statements are unaudited and

20
 
(ii) correct [sic] some typo mistakes.”  In the amended version, financial statements that in the
original version were marked as “audited” were changed to “unaudited.”
FIRST CLAIM FOR RELIEF
FRAUD IN THE OFFER OR SALE OF SECURITIES

Violations of Sections 17(a)(1) and (3) of the Securities Act
(Smith and Xtreme Fighting)

57. Paragraphs 1 through 56 above are re-alleged and incorporated by reference as if
fully set forth herein.
58. By reason of the conduct described above, the Defendants, directly or indirectly,
in connection with the offer or sale of securities, by the use of the means or instrumentalities of
interstate commerce or of the mails, directly or indirectly, acting intentionally, knowingly,
recklessly, or negligently (i) employed devices, schemes, or artifices to defraud; and (ii) engaged
in transactions, practices, or courses of business which operated or would operate as a fraud or
deceit upon any persons, including purchasers or sellers of the securities.
59. By reason of the conduct described above, the Defendants violated Securities Act
Sections 17(a)(1) and (3) [15 U.S.C. §§ 77q(a)(1) and (3)] and will continue to violate those
sections unless enjoined.
SECOND CLAIM FOR RELIEF
FRAUD IN THE OFFER OR SALE OF SECURITIES

Violations of Section 17(a)(2) of the Securities Act
(Xtreme Fighting)
60. Paragraphs 1 through 56 above are re-alleged and incorporated by reference as if
fully set forth herein.
61. By reason of the conduct described above, Xtreme Fighting, directly or indirectly,
in connection with the offer or sale of securities, by the use of the means or instrumentalities of
interstate commerce or of the mails, directly or indirectly, acting intentionally, knowingly,

21
 
recklessly, or negligently obtained money or property by means of untrue statements of material
fact or by omitting to state material facts necessary in order to make statements made, in the light
of the circumstances under which they were made, not misleading.
62. By reason of the conduct described above, Xtreme Fighting violated Securities
Act Section 17(a)(2) [15 U.S.C. § 77q(a)(2)] and will continue to violate that section unless
enjoined.
THIRD CLAIM FOR RELIEF
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES

Violations of Section 10(b) of the Exchange Act and Rules 10b-5(a), (b), and (c) thereunder
(Smith and Xtreme Fighting)

63. Paragraphs 1 through 56 above are re-alleged and incorporated by reference as if
fully set forth herein.
64. By reason of the conduct described above, the Defendants, directly or indirectly,
in connection with the purchase or sale of securities, by the use of the means or instrumentalities
of interstate commerce or of the mails, or of any facility of any national securities exchange,
intentionally, knowingly or recklessly, (i) employed devices, schemes, or artifices to defraud; (ii)
made untrue statements of material fact or omitted to state material facts necessary in order to
make the statements made, in light of the circumstances under which they were made, not
misleading; and (iii) engaged in acts, practices, or courses of business which operated or would
operate as a fraud or deceit upon any persons, including purchasers or sellers of the securities.
65. By reason of the conduct described above, the Defendants violated Exchange Act
Section 10(b) [15 U.S.C. § 78j(b)] and Rules 10b-5(a), (b), and (c) [17 C.F.R. §§ 240.10b-5(a),
(b), and (c)] thereunder and will continue to violate that section and those rules unless enjoined.

22
 
FOURTH CLAIM FOR RELIEF
UNREGISTERED OFFERINGS OF SECURITIES

Violations of Sections 5(a) and 5(c) of the Securities Act
(Smith and Xtreme Fighting)

66. Paragraphs 1 through 56 above are re-alleged and incorporated by reference as if
fully set forth herein.
67. By reason of the conduct described above, Defendants, directly or indirectly:
(i) made use of the means or instruments of transportation or communication in interstate
commerce or of the mails to sell, through the use or medium of a prospectus or otherwise,
securities as to which no registration statement has been in effect and for which no exemption
from registration has been available; and/or (ii) made use of the means or instruments of
transportation or communication in interstate commerce or of the mails to offer to sell, through
the use or medium of a prospectus or otherwise, securities as to which no registration statement
has been filed.
68. As a result, Defendants violated Sections 5(a) and (c) of the Securities Act
[15 U.S.C. §§ 77e(a) and (c)] and will continue to violate those sections unless enjoined.
FIFTH CLAIM FOR RELIEF
AIDING AND ABETTING

Section 15(b) of the Securities Act [15 U.S.C. § 77o(b)]
(Smith)
69. Paragraphs 1 through 56 above are re-alleged and incorporated by reference as if
fully set forth herein.
70. By reason of the conduct described above, Smith knowingly or recklessly
provided substantial assistance to Xtreme Fighting in its violations of Section 17(a)(2) of the
Securities Act [15 U.S.C. § 77q(a)(2)].  Smith therefore violated Section 17(a)(2) and will
continue to violate that section unless enjoined.

23
 
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court find that the
Defendants committed the violations alleged, and:
I.
Enter a Final Judgment permanently restraining and enjoining Defendants, as well as
their agents, servants, employees, attorneys, and other persons in active concert or participation
with them, from directly or indirectly engaging in the conduct described above, or in conduct of
similar purpose and effect, in violation of Section 17(a) of the Securities Act [15 U.S.C. §
77q(a)] and Section 10(b) of the Exchange Act [15 U.S.C. §§78j(b)], and Rule 10b-5 thereunder
[17 C.F.R. §240.10b-5];
II.
 Enter a Final Judgment permanently enjoining Defendants from violating, directly or
indirectly, Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§77e(a) and (c)];
III.
Enter a Final Judgment ordering Defendants to disgorge their ill-gotten gains and pay
prejudgment interest thereon pursuant to Sections 21(d)(5) and (7) of the Exchange Act [15
U.S.C. §§ 78u(d)(5) and (7)];
IV.
Enter a Final Judgment imposing civil money penalties upon Defendants 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)];

24
 
V.
Enter a Final Judgment prohibiting Smith from participating in any offering of a penny
stock, pursuant to Section 20(g) of the Securities Act [15 U.S.C. §77t(g)] and Section 21(d)(6) of
the Exchange Act [15 U.S.C. §78u(d)(6)];
VI.
 Enter a Final Judgment barring Smith, pursuant to Section 20(e) of the Securities Act [15
U.S.C. § 77t(d)], and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)], from
serving as an officer or director of any company that has a class of securities registered with the
Commission pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l], or that is required to
file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)];
VII.
Enter a Final Judgment barring Smith from directly or indirectly participating in the
issuance, purchase, offer, or sale of any security, provided that such injunction shall not prevent
Smith from purchasing or selling securities listed on a national exchange for his own personal
accounts;
VIII.
Grant such other and further relief as this Court deems just and proper; and
IX.
Further, the Commission respectfully requests that the Court retain jurisdiction over this
action in order to implement and carry out the terms of all orders and decrees that it may enter, or
to entertain any suitable application or motion by the Commission for additional relief within the
jurisdiction of this Court.

25
 
JURY DEMAND
The Commission hereby demands a jury trial on any and all issues in this action so
triable.
DATED: December 9, 2024                            Respectfully submitted,

/s/             Michael             C.             Moran
Michael C. Moran
Senior Trial Counsel
S.D. Fla. Special Bar No. A5503288
Direct Dial: (617) 573-8931
Email: [email protected]

Kathleen B. Shields
Senior Trial Counsel
S.D. Fla. Special Bar No. A5503290
Direct Dial: (617) 573-8904
Email: [email protected]

William J. Durkin
Counsel
S.D. Fla. Special Bar No. A5503289
Direct Dial: (617) 573-8937
Email: [email protected]

ATTORNEYS FOR PLAINTIFF
SECURITIES AND EXCHANGE
COMMISSION
Boston Regional Office
33 Arch St., 24th Floor
Boston, MA 02110
Telephone: (617) 573-8900
Fax: (617) 573-4590

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF FLORIDA 

 
CIVIL ACTION NO. 1:24cv24802 

 

 
SECURITIES AND EXCHANGE 
COMMISSION, 
    
   Plaintiff, 
 
 v. 
 
STEVE A. SMITH, JR. AND XTREME 
FIGHTING CHAMPIONSHIPS, INC. 
 
   Defendants. 
 

 
 
         
 COMPLAINT 
 JURY TRIAL DEMANDED 

 Plaintiff, Securities and Exchange Commission (the “Commission”), alleges the 

following against defendants Steve A. Smith, Jr. (“Smith”) and Xtreme Fighting Championships, 

Inc. (“Xtreme Fighting”) (together, “Defendants”): 

SUMMARY 

1. From approximately January 2020 through at least April 2022, Smith and Xtreme 

Fighting engaged in a fraudulent scheme to illegally sell large amounts of Xtreme Fighting stock 

to the investing public.  In January 2020, Smith acquired control of Xtreme Fighting and became 

its chief executive officer.  Xtreme Fighting was a small company with stock traded in the over-

the-counter securities market.  Smith immediately began a fraudulent scheme to sell Xtreme 

Fighting’s stock.  The stock sales were illegal because Smith and Xtreme Fighting’s in-house 

counsel, who has since died, controlled the stock and sold it in transactions that were neither 

registered with the Commission nor exempt from registration.  Smith and the in-house counsel 

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hid their control of the stock to avoid legal limits on sales by insiders.  The scheme generated 

over $5 million in illegal proceeds, of which Xtreme Fighting received at least $436,000.       

2. To further the scheme, in April 2022, Smith and Xtreme Fighting publicly filed an 

annual report on Commission Form 10-K falsely stating that Xtreme Fighting’s financial 

statements were audited by an independent registered public accounting firm.  Public companies 

that file annual reports with the Commission on Form 10-K are required to include audited 

financial statements.  Smith made the false filing because Xtreme Fighting’s annual report had 

been delinquent.  This delinquency had caused Xtreme Fighting’s stock to move to a more 

restricted portion of the over-the-counter securities market, designated for companies that do not 

make current information publicly available.  Despite warnings from Xtreme Fighting’s auditing 

firm that the audited financial statements were not complete or close to being complete, Smith 

proceeded with filing the Form 10-K with the purpose and effect of removing Xtreme Fighting 

stock from the more restrictive area of the market.  

VIOLATIONS 

3. By virtue of the conduct alleged herein, Smith and Xtreme Fighting violated 

Sections 5(a), 5(c), 17(a)(1), and 17(a)(3) of the Securities Act of 1933 (“Securities Act”) [15 

U.S.C. §§ 77e(a), 77e(c), 77q(a)(1), and 77q(a)(3)], and Section 10(b) of the Securities Exchange 

Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rules 10b-5(a), (b), and (c) thereunder 

[17 C.F.R. §§ 240.10b-5(a)-(c)].  Xtreme Fighting further violated Section 17(a)(2) of the 

Securities Act [15 U.S.C. § 77q(a)(2)] and Smith aided and abetted that violation.     

NATURE OF THE PROCEEDING AND RELIEF SOUGHT 

4. The Commission brings this action pursuant to the authority conferred upon it by 

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

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Act [15 U.S.C. § 78u(d)(1)]. 

5. The Commission seeks: (i) against Defendants, permanent injunctions, enjoining 

them from engaging in the transactions, acts, practices, and courses of business alleged in this 

Complaint, including enjoining them from committing or engaging in specified actions or 

activities relevant to violations charged herein; (ii) against Defendants, disgorgement of all ill-

gotten gains from the unlawful conduct set forth in this Complaint, together with prejudgment 

interest, under Sections 21(d)(5) and (7) of the Exchange Act [15 U.S.C. §§ 78u(d)(5) and (7)]; 

(iii) against Defendants, civil 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) against Smith, 

an order barring him from participating in any offering of a penny stock, pursuant to Section 

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

U.S.C. § 78u(d)(6)]; (v) against Smith, an order enjoining him from directly or indirectly 

participating in the issuance, purchase, offer or sale of any security, provided that such injunction 

shall not prevent him from purchasing or selling securities listed on a national exchange for his 

own personal accounts; (vi) against Smith, an order barring him from acting as an officer or 

director of any public company, pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 

77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)]; and (vii) such other 

relief as the Court may deem appropriate.     

JURISDICTION AND VENUE 

6. This Court has jurisdiction over this action pursuant to Sections 20(d)(1) and 

22(a) of the Securities Act [15 U.S.C. §§ 77t(d)(1) and 77v(a)] and Sections 21(d), 21(e), and 27 

of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), 78aa].  Venue lies 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 

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4 
 

U.S.C. § 78aa].  Smith is a resident of this district, and Xtreme Fighting has maintained its 

principal place of business in this district.      

7. In connection with the transactions, acts, practices, and courses of business 

alleged in this Complaint, Defendants, directly or indirectly, singly or in concert, made use of the 

means or instrumentalities of transportation or communication in interstate commerce, or the 

mails.   

DEFENDANTS 

8. Smith, age 50, is a resident of Miami, Florida.  In a public filing made with the 

Commission on or about January 24, 2020, Xtreme Fighting—then known as Duke Mountain 

Resources, Inc. (“Duke Mountain”)—announced Smith’s election to its board of directors and 

appointment as its president and CEO.  Thereafter, Smith signed annual, quarterly, and other 

periodic reports that Xtreme Fighting filed with the Commission. 

9. Xtreme Fighting is a Nevada corporation headquartered in Miramar Beach, 

Florida.  During the period relevant to this Complaint, Xtreme Fighting’s common stock was 

quoted on OTC Link operated by OTC Markets Group, Inc. (“OTC Markets”) under the ticker 

symbol “XFCI.”  Xtreme Fighting was known as Duke Mountain until July 2020, and was 

previously quoted on OTC Link with the symbol “DKMR.”  Xtreme Fighting describes itself as 

a sports entertainment and media company that produces, promotes, and broadcasts mixed 

martial arts fighting events.  During the period relevant to this complaint, Xtreme Fighting filed 

periodic reports with the Commission, including annual reports on Form 10-K, quarterly reports 

on Form 10-Q, and other interim reports on Form 8-K.  Those reports were available to the 

investing public via the Commission’s public website. 

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5 
 

RELEVANT INDIVIDUALS AND ENTITIES 

10. Christopher K. Davies (“Davies”) was a close friend of Smith.  Davies died in 

September 2022.  Davies was licensed as an attorney in Illinois until his suspension in 2015.  In 

April 2018, the Commission filed a civil action alleging securities fraud against Davies in the 

United States District Court for the Eastern District of New York.  SEC v. Christopher K. 

Davies, et al., No. 18-cv-2323 (E.D.N.Y., filed April 18, 2018).  The Commission alleged that 

Davies fraudulently controlled a penny stock company from behind the scenes and made false 

statements about its business plans and operations so he could illegally obtain millions of shares, 

which he planned to profit on by selling into the securities markets.  The court entered a default 

judgment against Davies on February 23, 2022.  In a criminal action involving related conduct, 

Davies was indicted in the Eastern District of New York on August 30, 2018.  U.S. v. Davies, 

No. 18-cr-479 (E.D.N.Y.).  Davies pleaded guilty on May 28, 2019 to one count of conspiracy to 

commit securities fraud, in violation of 17 U.S.C. § 78j(b).  On March 2, 2022, the Commission 

issued an order suspending Davies from appearing or practicing before the Commission.  Davies 

therefore could not legally prepare Commission filings such as Xtreme Fighting’s annual reports 

on Form 10-K.  Davies, however, acted as “counsel” for Xtreme Fighting, by using a 

pseudonym, “Jim Barnes.”  Xtreme Fighting identified “Barnes” as company counsel in a public 

filing signed by Smith.  Smith knew that Davies used the “Barnes” pseudonym.   

11. Emerald Coast Investments, Inc. (“Emerald Coast”) was a Florida corporation 

with a mailing address at Smith’s residence.  Emerald Coast’s corporate filings listed Smith as an 

officer and director, and an Xtreme Fighting public filing described Smith as “principal” of 

Emerald Coast.  Smith and Davies used Emerald Coast as a front company or nominee to 

illegally sell shares of Duke Mountain and Xtreme Fighting stock.     

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6 
 

12. Eastern Dutch Enterprises, Ltd. (“Eastern Dutch”) was a corporation 

purportedly incorporated in St. Kitts and Nevis.  Davies and Smith used Eastern Dutch as a front 

company or nominee to sell shares of Xtreme Fighting in the public market.  A person with 

whom Davies had a close personal relationship (“Individual A”), was the purported CEO of 

Eastern Dutch.  In reality, Davies controlled Eastern Dutch and directed Individual A’s activities, 

including trading in brokerage accounts and wiring trading proceeds to bank accounts that 

Davies controlled. 

13. Marlin Media, Inc. (“Marlin Media”) was a corporation purportedly 

incorporated in St. Kitts and Nevis.  Davies and Smith used Marlin Media as a front company or 

nominee to sell shares of Xtreme Fighting in the public market.  Another person with whom 

Davies had a close personal relationship (“Individual B”) was the purported CEO of Marlin 

Media.  Davies controlled Marlin Media and directed Individual B’s activities, including trading 

and wiring trading proceeds. 

14. Valor Capital was incorporated in the Cayman Islands in 2017.  Valor Capital 

registered as a broker-dealer with the Cayman Islands Monetary Authority by no later than 

January 2020.   

15. Joseph A. Padilla is an individual charged by the Commission in June 2023, 

alleging that he illegally sold stock of several microcap companies, including Xtreme Fighting.  

SEC v. Padilla, 23-cv-11331-RGS (D. Mass. filed June 13, 2023).  The Commission’s complaint 

included allegations that Padilla engaged in a fraudulent scheme for individuals who paid Padilla 

to arrange illegal stock sales.  The complaint alleged that those individuals hid their identities 

through offshore accounts at Valor Capital in different names that Padilla arranged, which the 

complaint described as “Padilla Nominees.”  The Commission and Padilla reached a settlement, 

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7 
 

and the court entered a consent judgment on November 8, 2024.  The U.S. Attorney’s Office for 

the District of Massachusetts indicted Padilla on March 21, 2023 for conduct partially related to 

the Commission’s action.  Padilla pled guilty on August 3, 2023 to securities fraud for conduct 

relating to two companies, not Xtreme Fighting.  U.S. v. Padilla, 23-cr-10075-RGS, ECF No. 

136 (D. Mass.).  As part of an agreed-upon statement of facts, Padilla admitted that Valor Capital 

was a Cayman Islands broker with which he had “a close, unofficial association.”   

BACKGROUND 

16. Xtreme Fighting stock was traded at all relevant times in the over-the-counter 

penny stock market.  A “penny stock” generally refers to stock of companies with low market 

capitalizations and stock that trades at less than $5 per share.  As described below, Smith 

illegally sold “restricted stock” that was restricted because it was originally issued by Xtreme 

Fighting (or its predecessor, Duke Mountain) in a private transaction that was not registered with 

the Commission.  The stock certificates for restricted shares include a legend indicating that they 

are restricted, and that legend must be removed by the stock issuer’s transfer agent before the 

stock can be legally resold to the public.  Smith’s scheme involved having Xtreme Fighting’s 

transfer agent remove restrictive legends from stock shares on false pretenses.     

17. Absent an exemption under the federal securities laws and rules, restricted stock 

cannot legally be offered or sold to the public unless a securities registration statement has been 

filed with the Commission (for an offer) or is in effect (for a sale).  Such registration statements 

are often filed with the Commission on Form S-1 and are often referred to as “S-1 registration 

statements.”  S-1 registration statements contain important information about an issuer’s business 

operations, financial condition, results of operation, risk factors, and management.  They also 

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8 
 

disclose any person or group who is the beneficial owner of more than 5% of the company’s 

securities.   

18. An “affiliate” of an issuer is a person or entity, like Smith and Davies, who 

directly or indirectly through one or more intermediaries, controls, is controlled by, or is under 

common control with, such issuer (i.e., a control person).  “Control” means the power to direct 

the management and policies of the company in question.  Affiliates include officers, directors, 

and controlling shareholders, as well as any person who is under “common control” with, or has 

common control of, an issuer.       

19. Smith and Xtreme Fighting’s scheme involved a fraudulent effort to use a safe 

harbor provided by Rule 144 under the Securities Act [17 C.F.R. § 240.144] for holders of 

restricted stock to sell shares to the public in unregistered transactions.  Rule 144 requires the 

holder of restricted stock to hold the shares for a minimum period of time before reselling them.  

It also includes a volume limitation on resales by affiliates, like Smith or Davies, which limits 

them to selling only small amounts of stock at any one time in unregistered transactions.  Smith 

engaged in fraudulent conduct to make it appear that Emerald Coast had held Duke 

Mountain/Xtreme Fighting shares for the requisite holding period.  Further, Smith sold shares of 

Duke Mountain/Xtreme Fighting, through Emerald Coast, in an amount that exceeded the 

volume limitation.  Smith also facilitated illegal sales by Davies in excess of the volume 

limitation.  

20. A “transfer agent” is a company which, among other things, issues and cancels 

certificates of a company’s stock to reflect changes in ownership.  Many companies that have 

publicly traded securities use transfer agents to keep track of the individuals and entities that own 

their stock.  Transfer agents routinely keep track of whether shares are restricted from resale. 

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9 
 

Before removing restrictive legends from stock, transfer agents often require an opinion letter 

from an attorney representing that shares are eligible for public resale pursuant to an exemption 

from registration.   

21. OTC Markets is a stock quotation service that facilitates over-the-counter trading 

of shares in small companies that are not listed on national securities exchanges (like NASDAQ 

or the New York Stock Exchange).  OTC Markets operates OTC Link (previously known as 

“Pink Sheets”) to provide price quotes on stock traded in the over-the-counter market.  Xtreme 

Fighting’s stock was quoted on OTC Link with the symbol “XFCI” or “DKMR” as it was 

previously known. 

22. From January 2020 through January 2022, Smith caused or recklessly allowed 

Xtreme Fighting to issue millions of shares of stock for the purpose of public distribution, in 

transactions that were not registered with the Commission.  The stock should have been 

restricted and ineligible for public resale unless there was a valid exemption to registration, 

which there was not.  Smith and Davies, however, arranged for Xtreme Fighting to issue the 

stock to Emerald Coast, Eastern Dutch, and Marlin Media—entities purportedly unaffiliated with 

Xtreme Fighting but, in reality, controlled by Smith and/or Davies.  The issuance of stock to 

purportedly unaffiliated entities created a false appearance that the stock was exempt from 

registration and eligible for public resale.   

23. The illegal sales of stock arranged by Smith and Davies took place while Xtreme 

Fighting was actively promoting its brand through a series of press releases.  The press releases 

included announcements of upcoming mixed martial arts fights and deals to broadcast fights on 

well-known television networks.  During the period of the scheme, Xtreme Fighting issued 

dozens of press releases.         

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SMITH’S ACQUISITION OF  
XTREME FIGHTING AND ILLEGAL SALES OF ITS STOCK 

24. As of November 2019, Xtreme Fighting’s predecessor company, Duke Mountain, 

described itself as a mineral exploration company that in 2014 had ceased operations and was 

“currently a non-operating shell company.”  Duke Mountain described its business purpose, as of 

its annual report for 2019, to be “to serve as a vehicle to effect a merger, exchange of capital 

stock, asset acquisition, or other business combination.” 

25. On or about January 24, 2020, Duke Mountain publicly reported the resignation 

of the individual who had served as Chief Executive Officer, Chief Financial Officer, and 

Director of the company.  Duke Mountain announced Smith’s election as a member of its board 

of directors and his appointment as President and CEO.  Duke Mountain also announced that its 

majority shareholder had sold a controlling interest in the company to Smith. 

26. In a quarterly report for the quarter ended March 31, 2020, filed with the 

Commission on May 21, 2020, Duke Mountain announced that on January 30, 2020, it had 

entered into a Securities Purchase Agreement to acquire 800,000,000 shares of Xtreme Fighting.  

In a quarterly report for the quarter ended June 30, 2020, filed with the Commission on August 

26, 2020, Duke Mountain announced that it had acquired the rights to “Xtreme Fighting 

Championships, Inc., the largest independent mixed martial arts organization in the world” and 

changed its name to Xtreme Fighting Championships, Inc.   

27. On or about January 14, 2020, Duke Mountain issued 20 million shares of stock 

to Emerald Coast.  Ten days later, on or about the same day that Duke Mountain announced 

Smith’s takeover, Emerald Coast sold or purported to sell, for unspecified “value received,” 

15 million of its 20 million shares to Valor Capital in the Cayman Islands.  Smith acted on behalf 

of Emerald Coast for its transfer of the 15 million shares to Valor Capital.  The shares should 

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have remained restricted and unavailable for public resale because they were controlled by 

Smith, who, by the time of the transfer, was an affiliate of Duke Mountain.  Emerald Coast’s 

transfer of 15 million shares to Valor Capital, at Smith’s direction, was part of an illegal 

distribution of stock to the public.       

28. Emerald Coast transferred the 15 million Duke Mountain shares to Valor Capital 

after Duke Mountain’s transfer agent removed restrictive legends from the stock.  The transfer 

agent removed the legends after receiving fraudulent information.  The transfer agent records 

included a December 18, 2019 letter to the transfer agent from an attorney purportedly 

representing Emerald Coast, opining that the 20 million shares could be sold without restriction.  

The December 18, 2019 letter was fabricated.  It was not authored by the attorney whose 

letterhead and signature appeared upon it, and the letterhead included a phone number unrelated 

to the attorney.  Davies likely authored the fabricated opinion letter, and Smith knew or was 

reckless in not knowing that Davies prepared such a letter—in September 2021 Davies copied 

Smith on an email exchange involving Davies’s preparation of an opinion letter relating to a 

different company’s stock, but on the same attorney’s letterhead.  

29. According to the fabricated December 18, 2019 attorney opinion letter, Duke 

Mountain issued the 20 million shares to Emerald Coast to reduce the outstanding balance on 

convertible debt issued in 2012 to Emerald Coast by a subsidiary of Duke Mountain.  The letter 

attached a December 10, 2019 “Share Purchase Agreement and Assignment and Assumption of 

Debt,” according to which Duke Mountain purportedly acquired the subsidiary and assumed its 

debt to Emerald Coast.  Smith signed the agreement as president of Duke Mountain, even though 

he purportedly did not become a Duke Mountain officer until more than a month later.  “Jim 

Barnes,” which Smith knew to be a pseudonym for Davies, signed for Emerald Coast.  Emerald 

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Coast’s purported acquisition of Duke Mountain stock through the conversion of debt dating to 

2012 created a false appearance that Emerald Coast had acquired stock that was eligible for 

resale in the public markets.   

30. After Emerald Coast transferred 15 million Duke Mountain shares to Valor 

Capital, Valor Capital deposited the shares in an account of a Padilla Nominee.  The Padilla 

Nominee account immediately sold some of the shares in the public market and transferred other 

shares to other customer accounts.  Between January 2020 and September 2020, various 

accounts at Valor Capital sold 9 million of the 15 million shares in the public markets.     

31. The timing of the deposit and sales at Valor Capital corresponded to press 

releases issued by Duke Mountain.  On February 4, 2020, Duke Mountain issued a press release 

titled “XFC IS BACK.”  Duke Mountain announced its “latest investment into the sports 

entertainment market of mixed martial arts as the lead investor of Xtreme Fighting 

Championships, Inc.”  The release quoted Smith as saying “I am excited to announce that we are 

bringing the XFC back this year! . . . .  [W]e have made many strategic changes that have created 

a new vision and stability for XFC that will enable the organization to rise to the pinnacle of 

combat sports.”  On February 25, 2020, Duke Mountain issued another press release, again with 

quotes from Smith, and announced that Xtreme Fighting had secured broadcast contracts to 

televise its events.  An account at Valor Capital sold 20,000 shares on February 7, 2020 and 

another 20,000 shares on February 21, 2020, relative to overall market trading volume for Duke 

Mountain shares of 55,988 and 36,700 shares on those respective dates.   

32. In 2021, Smith and Xtreme Fighting attempted to paper over the illegal sale of 

15 million shares via Valor Capital.  In a description of related party transactions in Xtreme 

Fighting’s annual report for fiscal year 2020, publicly filed with the Commission on or about 

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September 20, 2021 and signed by Smith, Xtreme Fighting described Duke Mountain’s 

purported assumption of Emerald Coast debt in January 2020.  The annual report now described 

Smith as “principal” of Emerald Coast and claimed that Emerald Coast had forgiven the debt that 

Duke Mountain owed to it.  The annual report also stated that during 2020 Emerald Coast had 

been issued 27,000,000 shares “for services.”  In fact, the only shares issued to Emerald Coast in 

2020 were the 20 million shares issued in January 2020 and another 7 million issued in October 

2020.  The statements in the annual report were false because Xtreme Fighting (then Duke 

Mountain) had issued the 20 million shares in purported conversion of existing debt, not “for 

services” rendered, and Emerald Coast had not forgiven the debt.  It had instead purportedly 

converted the debt as a basis to sell 15 million shares of resulting stock to the public via Valor 

Capital.   

PROCEEDS TO XTREME FIGHTING FROM ILLEGAL STOCK SALES 

33. Smith and Davies later arranged for Xtreme Fighting to issue shares to Eastern 

Dutch and Marlin Media, which were entities that Davies secretly controlled.  Davies arranged 

for Individual A and Individual B to act as nominal president or CEO of Eastern Dutch and 

Marlin Media.  Eastern Dutch and Marlin Media deposited and sold over 32 million shares of 

Xtreme Fighting stock between September 2020 and February 2022, and received over 

$5.4 million in illegal proceeds.  Davies controlled and directed Individual A’s and Individual 

B’s activities, including trading Xtreme Fighting stock and transferring proceeds from the stock 

sales to Davies and Xtreme Fighting.   

34. In October 2020, Xtreme Fighting issued 7 million shares each to Emerald Coast 

and Eastern Dutch.  Smith, in his capacity as CEO of Xtreme Fighting, signed a letter to Xtreme 

Fighting’s transfer agent on Xtreme Fighting letterhead falsely stating that neither Emerald Coast 

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nor Eastern Dutch was an affiliate of Xtreme Fighting.  Smith’s letter further represented that the 

shares were “free-trading,” i.e., unrestricted and available for resale in the public securities 

markets.  The shares, however, should have remained restricted because they were controlled by 

Smith and Davies.  Smith’s letter also falsely stated that “[t]here is no agreement or any other 

arrangement” between or among Xtreme Fighting, Emerald Coast, and/or Eastern Dutch “to 

remit any portion of the proceeds from the resale of the Shares” to Xtreme Fighting.    

35. In January 2021, Emerald Coast transferred another approximately 7 million 

shares to Eastern Dutch.  Xtreme Fighting’s transfer agent issued the stock to Eastern Dutch 

without a restrictive legend after receiving another letter on Xtreme Fighting letterhead, again 

signed by Smith in his capacity as CEO of Xtreme Fighting, falsely representing that the shares 

were “free-trading.”  The shares, however, should have remained restricted because they were 

controlled by Smith and Davies.  

36. Eastern Dutch, acting at Davies’s direction, deposited 7 million shares on or about 

October 27, 2020 and 7 million shares on or about January 14, 2021 at another Cayman Islands 

broker-dealer (the “Second Cayman Broker-Dealer”).  For the deposits, Eastern Dutch provided 

the Second Cayman Broker-Dealer with a letter to Xtreme Fighting’s transfer agent on Xtreme 

Fighting letterhead, signed by Smith in his capacity as CEO of Xtreme Fighting.  The letter 

falsely stated that neither Emerald Coast nor Eastern Dutch was an affiliate of Xtreme Fighting.  

The letter also falsely stated that “[t]here is no agreement or any other arrangement between 

[Xtreme Fighting] and [Emerald Coast] or the other nonaffiliated parties to remit any portion of 

the proceeds from the resale of the Shares to [Xtreme Fighting].”   

37. Immediately after depositing the shares in October 2020 and January 2021, 

Eastern Dutch, acting at Davies’s direction, began selling them via the Second Cayman Broker-

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Dealer in the public securities markets.  Between October 27, 2020 and January 22, 2021, 

Eastern Dutch sold over 12.7 million shares of Xtreme Fighting stock, for proceeds of over 

$1.7 million.  On or about January 22, 2021, Eastern Dutch, again acting at Davies’s direction, 

sent $336,000 of the stock sale proceeds to Xtreme Fighting. 

38. In March 2021, Xtreme Fighting issued 10 million purportedly “free-trading” 

shares of Xtreme Fighting stock to Marlin Media.  The transfer agent issued the stock to Marlin 

Media without restrictive legend after receiving a letter on Xtreme Fighting letterhead, signed by 

Smith in his capacity as CEO of Xtreme Fighting, dated February 2, 2021.  According to the 

letter, Marlin Media purportedly acquired the 10 million shares from Emerald Coast.  The letter 

falsely represented that neither Emerald Coast nor Marlin Media was an affiliate of Xtreme 

Fighting.  The shares should have been restricted because they were controlled by Smith and 

Davies.  Smith’s letter falsely represented that “[t]here is no agreement or any other arrangement 

between [Xtreme Fighting], [Emerald Coast] or Marlin Media, Inc. and there has never been any 

agreement or arrangement to remit any portion of the proceeds from the resale of the Shares to 

[Xtreme Fighting].”  

39. Marlin Media, acting at Davies’s direction, deposited the 10 million shares on or 

about April 6, 2021 at the Second Cayman Broker-Dealer and, in connection with the deposit, 

provided the broker-dealer with a copy of Smith’s February 2, 2021 letter.   

40. Immediately after depositing the shares, Marlin Media, acting at Davies’s 

direction, began selling them in the public securities markets.  Between April 7, 2021 and May 

10, 2021, Marlin Media sold over 5.4 million shares of Xtreme Fighting stock for proceeds of 

over $536,000.  On or about May 10, 2021, Marlin Media, acting at Davies’s direction, sent 

$100,000 of the sales proceeds to Xtreme Fighting. 

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ILLEGAL SALES VIA A PADILLA NOMINEE AND  
SMITH’S FILING OF A FRAUDULENT ANNUAL REPORT  

41. On January 12, 2022, Xtreme Fighting issued 10 million shares each to four 

entities secretly controlled by Davies, including Marlin Media.  The transfer agent issued the 

stock after receiving a letter on Xtreme Fighting letterhead, signed by Smith, representing that 

the stock derived from a conversion of debt owed to Emerald Coast.  Smith’s letter falsely 

represented that Emerald Coast, Marlin Media, and the other entities controlled by Davies were 

not affiliates of Xtreme Fighting.  Smith again represented falsely that the shares were “free 

trading.”  In March 2022, Marlin Media, sold, or purported to sell, its 10 million shares to Smith 

Corona S.A. de C.V. (“Smith Corona”), which was a Padilla client or a Padilla Nominee with an 

account at Valor Capital.   

42. Smith and Davies orchestrated the delivery of Xtreme Fighting shares to Smith 

Corona but took steps to distance themselves from the transaction.  They delivered the shares to 

Smith Corona to share in Smith Corona’s trading proceeds and/or to maintain an active market in 

Xtreme Fighting stock.  On Friday, March 4, 2022, Smith emailed Xtreme Fighting’s transfer 

agent to say that he approved of the transfer from Marlin Media to Smith Corona.  After the 

transfer agent responded to Smith with a list of required documentation, Smith forwarded the 

email to Davies and Individual B, writing “[w]e need to get this sorted out today/Monday so we 

can get these shares moved.”   

43. On Monday, March 7, 2022, Smith received an email from someone acting on 

behalf of Smith Corona, instructing Smith on the documentation that would be necessary for the 

transfer agent to transfer shares from Marlin Media to Smith Corona.  The sender of the email 

wrote to Smith that if Marlin Media did not have an email address, they could use a Smith 

Corona address to contact the transfer agent.  Smith forwarded the message to a “Jim Barnes” 

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email address for Davies, who sent it to Individual B with instructions to complete the paperwork 

and send it to Xtreme Fighting’s transfer agent.  Davies wrote to Individual B, “Please BCC 

Steve and Me. Must copy us under BCC so no one sees us.”   

44. Also on March 7, 2022, Smith wrote to Davies, “Need the name and address of 

the broker for Smith Corona.  Send it to [Individual B] so she can complete the Stock Power.”  

The “Stock Power” was a reference to a transfer agent form, ultimately signed by Individual B, 

authorizing the transfer of shares from Marlin Media to Smith Corona.   

45. The transfer agent ultimately moved the 10 million shares from Marlin Media to 

Smith Corona on March 11, 2022, after receiving documentation signed by Individual B.   

46. On April 19, 2022, OTC Markets recategorized Xtreme Fighting’s stock to a more 

restrictive trading level after Xtreme Fighting failed to file a timely annual report.  Xtreme 

Fighting was delinquent in filing its annual report on Commission Form 10-K because its 2021 

financial statements had not been audited by an independent registered public accounting firm.  

Public companies that file annual reports with the Commission on Form 10-K are required to 

include audited financial statements.   

47. OTC Markets uses market designations and informational “flags” associated with 

risks of particular securities.  The “Pink Current” designation is applied to issuers that are current 

with reporting obligations.  The “Pink Limited Information” designation is applied to issuers that 

are delinquent in reporting obligations, and OTC Markets applies a “yield” sign icon next to such 

securities on its website.  On April 19, 2022, OTC Markets changed Xtreme Fighting’s 

designation to Expert Market, which is a more restrictive tier of the over-the-counter market for 

stock of companies that do not make current information publicly available.    

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48. On or about April 13, 2022, Smith emailed Xtreme Fighting’s audit firm 

regarding the filing of Xtreme Fighting’s annual report on Commission Form 10-K and said, 

“[o]bviously we need this filed by the Friday deadline.”  Smith copied Davies, acting as “Jim 

Barnes,” who represented himself to the auditor as Xtreme Fighting’s counsel.  Davies, acting as 

“Barnes,” replied to Smith’s email and said to the auditor, “[W]e need to file before a yield sign 

is placed on our stock symbol. Which could happen if we do not file our 10K on Monday or 

Tuesday.”   

49. On or about April 13, 2022, a representative from the audit firm emailed Smith a 

list of items required for the audit, such as financial information and supporting documentation.  

The representative wrote, “I need documentation. . . . We also need to do confirmations and the 

like.  Confirmations take weeks to get back at best. . . . Staff has to be able to get through all of 

this before you can file.”   

50. Ignoring the auditor, Smith signed and caused to be filed Xtreme Fighting’s 2021 

Form 10-K on or about April 21, 2022, two days after Xtreme Fighting was moved to the Expert 

Market because of its delinquent filing.  The Form 10-K stated that Xtreme Fighting had 

appointed the new auditor to perform audit services for fiscal year 2021, purported to include 

“audited” financial statements for the 2020 and 2021 fiscal years, and referred to “[t]he report of 

our independent registered public accounting firms that accompanies our audited consolidated 

financial statements for the year ended December 31, 2021.”  These statements were false 

because the new auditor had not completed an audit of Xtreme Fighting’s financial statements 

for 2021.   

51. Smith publicly posted on social media about the Form 10-K on April 20, 2022, 

writing, “XFCI is filing its audited 10k now with the SEC, it should appear tomorrow.”  In a 

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second post that day, he said, “Now that the heavy lifting of SEC audited financials is handled, 

we can again focus on the fight business of XFC.”  These statements were false because Xtreme 

Fighting’s financials had not been audited.   

52. After Smith and Xtreme Fighting filed the Form 10-K, OTC Markets upgraded its 

designation of Xtreme Fighting to Pink Current on April 22, 2022, thus removing the market 

restriction that Smith and Davies had wanted to avoid. 

53. The day after the filing, Xtreme Fighting’s auditor resigned.  In a letter to Smith, 

the auditor made clear that it had not even started the 2021 audit.  The auditor told Smith that it 

had “specifically responded to you that you did not have our permission or authorization to file 

the 10K but you filed this disregarding our expressly not granting permission to file.” 

54. The letter from the auditor to Smith also stated that the auditor had learned that 

“Jim Barnes” was Davies using a false name, and expressed concern that Xtreme Fighting’s 

counsel “in actuality is a person that has been suspended from involvement in public reporting 

entities by the SEC.”  Smith, however, persisted with the “Barnes” ruse after Davies died in 

September 2022.  Smith signed a current report on Form 8-K, filed with the Commission in April 

2023, announcing the departure and appointments of certain officers and noting that “Jim 

Barnes” had died.   

55. On or about April 27, 2022, Valor Capital deposited into the account of 

Bangatron SA de CV, another Padilla client or Padilla Nominee, the 10 million shares that 

Marlin Media had transferred to Smith Corona, and the account began selling the shares in the 

public securities markets on May 6, 2022.       

56. On May 10, 2022, Xtreme Fighting filed an amended 2021 Form 10-K that it said 

was “soley [sic] for the purpose of (i) reflecting that our financial statements are unaudited and 

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(ii) correct [sic] some typo mistakes.”  In the amended version, financial statements that in the 

original version were marked as “audited” were changed to “unaudited.”   

FIRST CLAIM FOR RELIEF 
FRAUD IN THE OFFER OR SALE OF SECURITIES 

 
Violations of Sections 17(a)(1) and (3) of the Securities Act  

(Smith and Xtreme Fighting) 
 

57. Paragraphs 1 through 56 above are re-alleged and incorporated by reference as if 

fully set forth herein. 

58. By reason of the conduct described above, the Defendants, directly or indirectly, 

in connection with the offer or sale of securities, by the use of the means or instrumentalities of 

interstate commerce or of the mails, directly or indirectly, acting intentionally, knowingly, 

recklessly, or negligently (i) employed devices, schemes, or artifices to defraud; and (ii) engaged 

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

deceit upon any persons, including purchasers or sellers of the securities. 

59. By reason of the conduct described above, the Defendants violated Securities Act 

Sections 17(a)(1) and (3) [15 U.S.C. §§ 77q(a)(1) and (3)] and will continue to violate those 

sections unless enjoined. 

SECOND CLAIM FOR RELIEF 
FRAUD IN THE OFFER OR SALE OF SECURITIES 

 
Violations of Section 17(a)(2) of the Securities Act 

(Xtreme Fighting) 

60. Paragraphs 1 through 56 above are re-alleged and incorporated by reference as if 

fully set forth herein. 

61. By reason of the conduct described above, Xtreme Fighting, directly or indirectly, 

in connection with the offer or sale of securities, by the use of the means or instrumentalities of 

interstate commerce or of the mails, directly or indirectly, acting intentionally, knowingly, 

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recklessly, or negligently obtained money or property by means of untrue statements of material 

fact or by omitting to state material facts necessary in order to make statements made, in the light 

of the circumstances under which they were made, not misleading. 

62. By reason of the conduct described above, Xtreme Fighting violated Securities 

Act Section 17(a)(2) [15 U.S.C. § 77q(a)(2)] and will continue to violate that section unless 

enjoined. 

THIRD CLAIM FOR RELIEF 
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES 

 
Violations of Section 10(b) of the Exchange Act and Rules 10b-5(a), (b), and (c) thereunder  

(Smith and Xtreme Fighting) 
 

63. Paragraphs 1 through 56 above are re-alleged and incorporated by reference as if 

fully set forth herein. 

64. By reason of the conduct described above, the Defendants, directly or indirectly, 

in connection with the purchase or sale of securities, by the use of the means or instrumentalities 

of interstate commerce or of the mails, or of any facility of any national securities exchange, 

intentionally, knowingly or recklessly, (i) employed devices, schemes, or artifices to defraud; (ii) 

made untrue statements of material fact or omitted to state material facts necessary in order to 

make the statements made, in light of the circumstances under which they were made, not 

misleading; and (iii) engaged in acts, practices, or courses of business which operated or would 

operate as a fraud or deceit upon any persons, including purchasers or sellers of the securities. 

65. By reason of the conduct described above, the Defendants violated Exchange Act 

Section 10(b) [15 U.S.C. § 78j(b)] and Rules 10b-5(a), (b), and (c) [17 C.F.R. §§ 240.10b-5(a), 

(b), and (c)] thereunder and will continue to violate that section and those rules unless enjoined. 

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FOURTH CLAIM FOR RELIEF 
UNREGISTERED OFFERINGS OF SECURITIES 

 
Violations of Sections 5(a) and 5(c) of the Securities Act 

(Smith and Xtreme Fighting) 
 

66. Paragraphs 1 through 56 above are re-alleged and incorporated by reference as if 

fully set forth herein. 

67. By reason of the conduct described above, Defendants, directly or indirectly:  

(i) made use of the means or instruments of transportation or communication in interstate 

commerce or of the mails to sell, through the use or medium of a prospectus or otherwise, 

securities as to which no registration statement has been in effect and for which no exemption 

from registration has been available; and/or (ii) made use of the means or instruments of 

transportation or communication in interstate commerce or of the mails to offer to sell, through 

the use or medium of a prospectus or otherwise, securities as to which no registration statement 

has been filed. 

68. As a result, Defendants violated Sections 5(a) and (c) of the Securities Act 

[15 U.S.C. §§ 77e(a) and (c)] and will continue to violate those sections unless enjoined.  

FIFTH CLAIM FOR RELIEF 
AIDING AND ABETTING 

 
Section 15(b) of the Securities Act [15 U.S.C. § 77o(b)] 

(Smith) 

69. Paragraphs 1 through 56 above are re-alleged and incorporated by reference as if 

fully set forth herein. 

70. By reason of the conduct described above, Smith knowingly or recklessly 

provided substantial assistance to Xtreme Fighting in its violations of Section 17(a)(2) of the 

Securities Act [15 U.S.C. § 77q(a)(2)].  Smith therefore violated Section 17(a)(2) and will 

continue to violate that section unless enjoined. 

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PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court find that the 

Defendants committed the violations alleged, and: 

I. 

Enter a Final Judgment permanently restraining and enjoining Defendants, as well as 

their agents, servants, employees, attorneys, and other persons in active concert or participation 

with them, from directly or indirectly engaging in the conduct described above, or in conduct of 

similar purpose and effect, in violation of Section 17(a) of the Securities Act [15 U.S.C. § 

77q(a)] and Section 10(b) of the Exchange Act [15 U.S.C. §§78j(b)], and Rule 10b-5 thereunder 

[17 C.F.R. §240.10b-5]; 

II. 

 Enter a Final Judgment permanently enjoining Defendants from violating, directly or 

indirectly, Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§77e(a) and (c)]; 

III. 

Enter a Final Judgment ordering Defendants to disgorge their ill-gotten gains and pay 

prejudgment interest thereon pursuant to Sections 21(d)(5) and (7) of the Exchange Act [15 

U.S.C. §§ 78u(d)(5) and (7)]; 

IV. 

Enter a Final Judgment imposing civil money penalties upon Defendants 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)];  

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V. 

Enter a Final Judgment prohibiting Smith from participating in any offering of a penny 

stock, pursuant to Section 20(g) of the Securities Act [15 U.S.C. §77t(g)] and Section 21(d)(6) of 

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

VI. 

 Enter a Final Judgment barring Smith, pursuant to Section 20(e) of the Securities Act [15 

U.S.C. § 77t(d)], and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)], from 

serving as an officer or director of any company that has a class of securities registered with the 

Commission pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l], or that is required to 

file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)]; 

VII. 

Enter a Final Judgment barring Smith from directly or indirectly participating in the 

issuance, purchase, offer, or sale of any security, provided that such injunction shall not prevent 

Smith from purchasing or selling securities listed on a national exchange for his own personal 

accounts; 

VIII. 

Grant such other and further relief as this Court deems just and proper; and 

IX. 

Further, the Commission respectfully requests that the Court retain jurisdiction over this 

action in order to implement and carry out the terms of all orders and decrees that it may enter, or 

to entertain any suitable application or motion by the Commission for additional relief within the 

jurisdiction of this Court. 

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JURY DEMAND 

The Commission hereby demands a jury trial on any and all issues in this action so 

triable.   

DATED: December 9, 2024                            Respectfully submitted, 
 
/s/ Michael C. Moran      

Michael C. Moran  
Senior Trial Counsel 
S.D. Fla. Special Bar No. A5503288 
Direct Dial: (617) 573-8931 
Email: [email protected] 
 
Kathleen B. Shields 
Senior Trial Counsel 
S.D. Fla. Special Bar No. A5503290 
Direct Dial: (617) 573-8904 
Email: [email protected] 
 
William J. Durkin 
Counsel 
S.D. Fla. Special Bar No. A5503289 
Direct Dial: (617) 573-8937 
Email: [email protected] 
 
ATTORNEYS FOR PLAINTIFF  
SECURITIES AND EXCHANGE 
COMMISSION  
Boston Regional Office  
33 Arch St., 24th Floor  
Boston, MA 02110  
Telephone: (617) 573-8900 
Fax: (617) 573-4590  

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