SEC v. Brad Hare; and Mammoth West Corporation, No. 1:24-cv-12134, Northern District of Illinois (Nov. 25, 2024) — Complaint

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
v.
BRAD HARE and
MAMMOTH WEST CORPORATION,
Defendants.

Civil No. 24-12134

Complaint
Jury Demand

COMPLAINT

Plaintiff Securities and Exchange Commission (the “SEC” or “Commission”) for its Complaint against Defendants Brad Hare (“Hare”) and Mammoth West Corporation d/b/a Mammoth Corporation (“Mammoth”) (collectively “Defendants”) alleges as follows:

SUMMARY

1. From at least April 2018 through early 2024 (the “Relevant Time Period”), Brad Hare and his wholly controlled business entity, Mammoth West Corporation, bought and sold billions of shares of newly issued shares of microcap securities, otherwise known as penny stocks, and generated millions of dollars from those sales. In doing so, the Defendants failed to comply with the SEC’s mandatory dealer registration requirements under the federal securities laws. Mammoth as part of a regular business and through Hare – its controlling principal – engaged in the buying and selling of securities for Mammoth’s own account.

2. Mammoth’s business model, as designed by Hare, included repeatedly purchasing convertible notes, a type of security, from penny stock issuers and penny stock debtholders, converting the notes into stock at a large discount from the prevailing market price, and selling the newly issued shares into the public markets for a substantial profit. Specifically, Mammoth acquired approximately 47 convertible notes during the relevant period and converted notes involving approximately 19 different companies issuing stock.

3. Mammoth, through Hare, gained over $2.5 million dollars in net profits from selling the shares, which consisted of the difference between the costs of acquiring the convertible debt securities and the trading proceeds obtained from converting the debt into shares and then selling the shares into the market. Defendants' illegal activities, which generated significant profits for themselves, diluted the value of shares held by other shareholders.

4. By engaging in a regular business model of buying convertible notes and selling the resulting newly issued shares of microcap stock into the public market, the Defendants operated as unregistered securities dealers.

5. By failing to comply with the dealer registration requirements of the federal securities laws, Mammoth and Hare avoided the regulatory obligations that govern dealer conduct in the marketplace, including submitting to regulatory inspections and oversight, following financial responsibility rules governing brokers and dealers, and maintaining books and records in accordance with applicable regulatory requirements.

6. By virtue of the conduct alleged in this Complaint, Mammoth and Hare have violated Section 15(a)(1) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78o(a)(1)].

7. Unless Mammoth and Hare are restrained and enjoined, they will continue to engage in the acts, practices, transactions, and courses of business set forth in this Complaint, or in acts, practices, transactions, and courses of business of similar type and object.

8. The SEC brings this action seeking injunctive relief, disgorgement with prejudgment interest, civil penalties, and other appropriate and necessary equitable relief, including penny stock bars and an order that Mammoth surrender for cancellation any shares or conversion rights obtained through its convertible notes business which are still held by Mammoth.

JURISDICTION AND VENUE

9. This Court has jurisdiction over this action pursuant to Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].

10. Hare, during the Relevant Time Period, resided in the Northern District of Illinois. Mammoth’s principal place of business is within this district. And certain of the acts, practices, and course of business constituting violations of the federal securities laws alleged herein occurred in this district. Venue therefore is proper in this district pursuant to Section 27 of the Exchange Act [15 U.S.C. § 78aa].

DEFENDANTS

11. Mammoth, doing business as Mammoth Corporation, is a Wyoming corporation created in 2001, with its principal place of business in Lake Zurich, Illinois, in this district. Hare founded Mammoth and is its sole officer and beneficial owner. During the Relevant Period, Mammoth was engaged in the convertible notes business. Mammoth had approximately three other employees working on its behalf during the Relevant Period. Mammoth has never been registered with the Commission in any capacity.

12. Hare, age 55, resides in Johnsburg, Illinois. He is the sole officer and beneficial owner of Mammoth and exercises ultimate decision-making authority over its business. Hare received salary from Mammoth. During the relevant period, Hare was not registered with the Commission in any capacity, including as a broker-dealer, nor associated with any registered entity. Hare was associated with broker-dealers as a registered representative from 1988–1996 and 2015–2017.

FACTUAL ALLEGATIONS

13. Hare has owned, controlled, and funded Mammoth since its inception, including during the Relevant Time Period. In addition, Hare made all investment and trading decisions on behalf of Mammoth, including for all transactions described below.

A. Defendants Bought Convertible Notes from Penny Stock Issuers, Converted Them to Newly Issued Shares of Stock, and Sold Large Volumes of Shares in the Market as Part of their Regular Business

14. During the Relevant Time Period, Hare operated Mammoth, a business in Lake Zurich, Illinois, through which Mammoth regularly purchased convertible notes from penny stock issuers and penny stock debtholders in need of cash.

15. After holding the notes for approximately six to twelve months or acquiring existing notes that had already been held, Hare converted Mammoth’s notes into newly issued shares of stock at a deeply discounted price negotiated in advance of purchase and sold that stock into the market at a profit.

16. Mammoth, through Hare, frequently engaged in convertible note transactions as part of its regular business.

17. Mammoth was a well-known debtholder and lender to penny stock issuers, and Mammoth and Hare held themselves out to the public as being willing to buy convertible notes as part of Mammoth’s regular business operations. The Defendants generated business through industry referrals, advertising on a website, and soliciting business through Hare’s database of business contacts that he had developed over many years.

18. Hare personally negotiated the terms of the convertible notes that Mammoth purchased directly from penny stock issuers. As a result of Hare's negotiations, Mammoth generally received very favorable terms. On behalf of Mammoth, Hare signed the securities purchase agreements by which Mammoth acquired the convertible notes.

19. The terms negotiated by Hare typically included: (a) a nine-month to two-year maturity date; (b) principal amounts between $6,000 and $2,200,000; (c) interest rates around 18% in the event of default; and (d) steep prepayment penalties.

20. The convertible notes acquired by Mammoth, through Hare, also included a term allowing the conversion of debt into shares at a significant discount to the prevailing market price, which was central to the success of the business plan.

21. The term typically allowed Mammoth, in its sole discretion, to convert the debt into the issuer's common stock at a market-adjustable price of 40% to 50% of the lowest trading price of the stock in the 10 to 90 days preceding each conversion. This term, which gave Mammoth a spread or markup on the stock that it sold, is a common attribute of a securities dealer.

22. Mammoth, through Hare, also typically negotiated an "original issue discount" when it purchased a note. This discount entitled Mammoth to acquire a note for a price less than the face value of the note but to convert the note to stock based on the face value of the note. The amount of the original issue discount varied but was typically 5% to 10% of the total note amount.

B. Defendants' Activities as Unregistered Dealers Yielded Significant Profits

23. The newly issued stock that Mammoth received through the conversion process was restricted. SEC Rule 144 enables non-affiliates to acquire restricted stock directly from the issuer in a private transaction and to resell it into the market after observing a holding period, among other requirements. [See 17 C.F.R. § 210.144]. Mammoth often began the conversion process soon after the Rule 144 holding period for the notes expired, or, in the event that Mammoth had purchased a note for which the holding period had already expired, soon after acquisition of the note. Hare submitted the conversion notices to the issuers himself or through employees of Mammoth who acted at Hare’s direction.

24. Mammoth generally converted the notes in several increments because the notes’ terms typically restricted Mammoth from owning more than 4.9% or 9.9% of an issuer’s outstanding shares.

25. Mammoth, through Hare, obtained billions of shares of stock directly from issuers through repeated note conversions and not from purchases in the secondary market. These shares were newly issued, and the sales of the shares into the market significantly increased both the amount of shares in the hands of the public and the issuers’ outstanding unrestricted share totals. Selling large quantities of newly issued shares into the market is a common attribute of a securities dealer.

26. Hare personally, or through Mammoth employees acting at his direction, arranged for the converted stock to be transferred electronically to Mammoth’s brokerage accounts. As part of this process, Hare obtained attorney opinion letters to assure Mammoth’s brokerage firms that the converted stock was no longer restricted and could be resold to the public.

27. Once the shares were deposited into Mammoth’s brokerage accounts, Mammoth, through Hare, typically began selling the shares as rapidly as the market would bear without depressing the issuer’s stock price, usually within a few days or weeks of conversion. Hare did so to lock in Mammoth’s profits.

28. Between April 1, 2018 and January 2024, Mammoth, through Hare, submitted nearly 100 conversion notices and sold over 11 billion newly issued shares of common stock into the public markets.

29. Mammoth’s profits from the sale of newly issued shares are attributable primarily to the discount Mammoth received on the converted stock, rather than from any appreciation in the share price.

30. Mammoth, through Hare, often reaped significant profits on its convertible note transactions within a short period of time. For example, on January 18, 2019, Mammoth, through Hare, purchased a convertible promissory note for $150,000 from a debtholder of penny stock Issuer 1. The promissory note had a face value principal amount of $157,062.

31. Pursuant to the transaction, Mammoth, through Hare (i) entered into an agreement with Issuer 1 to restate the convertible promissory note in Mammoth’s name; and (ii) obtained an attorney opinion letter opining that the Rule 144 period had expired, and that Mammoth could begin converting the note into shares immediately.

32. On or about January 22, 2019, February 1, 2019, February 11, 2019, and March 1, 2019, Mammoth, through Hare, submitted conversion notices to its broker-dealer and Issuer 1’s transfer agent to effectuate the conversion of the note into over 1.4 billion shares of Issuer 1.

33. The shares were obtained at a significant discount because the terms of the note entitled Mammoth to obtain shares at 50% of the lowest trading price of Issuer 1’s shares over the preceding year. After the shares were acquired and deposited, Mammoth sold them almost immediately. Between January 30, 2019, and March 13, 2019, Mammoth, through Hare, sold 1.4 billion shares of Issuer 1, reaping trading proceeds of over $336,000.

34. Defendants' convertible notes business was lucrative. Specifically, Mammoth generated over $2.5 million dollars in net trading profits from the post-conversion sale of the newly issued shares, and Mammoth transferred hundreds of thousands of dollars in salary to Hare as the sole officer and beneficial owner of the company.

C. Defendants Bought and Sold Penny Stocks

35. Virtually all of the stock Defendants bought and sold were penny stocks that did not meet any of the exceptions from the definition of a "penny stock," as defined by Exchange Act 3(a)(51) and Exchange Act Rule 3a51-1. [15 U.S.C. Section 78c(a)(51); 17 C.F.R. Section 240.3a51-1].

36. Defendants therefore participated in the offering of penny stock to investors by acting as securities dealers engaged in the buying and selling of penny stocks.

D. Defendants Violated the Federal Securities Laws by Acting as Unregistered Dealers

37. Any person engaged in the business of buying and selling securities for such person's account (through a broker or otherwise) as part of a regular business must register with the Securities and Exchange Commission. During the Relevant Time Period, Mammoth, through Hare, was engaged in the business of buying and selling securities for its own account and was not registered with the SEC.

38. Defendants used means or instrumentalities of interstate commerce to buy and sell securities as part of their regular business. For example, Defendants placed trades on national securities exchanges through a broker and communicated with the borrower companies and brokers using national telephone and other electronic communications networks.

39. During the Relevant Time Period, neither Mammoth nor its founder Hare was registered with the SEC as a dealer.

40. During the Relevant Period, Hare was not associated with a dealer registered with the SEC.

41. A broker-dealer who seeks to register with the Commission must file an application on a form called Form BD. To register as a dealer, the applicant must meet the statutory requirements to engage in a business that involves high professional standards.

42. Registration with the Commission requires the dealer to provide important information about its business, including but not limited to the names of the direct and indirect owners and executive officers of the business, certain arrangements with other persons or entities, the identities of those who control the business, the states in which the dealer does business, past criminal or regulatory actions against the dealer or any affiliated person that controls the business, and financial information, including bankruptcy history.

43. Registration also requires the dealer to join a self-regulatory organization, or a national security exchange, which assists the Commission in regulating the activities of registered dealers. Finally, registered dealers are subject to inspection by Commission staff and the Financial Industry Regulatory Authority (“FINRA”) to monitor compliance with the securities laws.

THIS ACTION IS TIMELY FILED

44. Defendants agreed to toll any statute of limitations applicable to the claims alleged herein during the period from April 1, 2023, to the present.

CLAIM FOR RELIEF

Violations of Section 15(a)(1) of the Exchange Act [15 U.S.C. §78o(a)]
(Against All Defendants)

45. The SEC re-alleges and incorporates by reference the allegations set forth in paragraphs 1 through 44 above.

46. By engaging in the conduct described above, Defendants made use of the mails or other means or instrumentalities of interstate commerce to effect transactions in, to induce, and to attempt to induce, the purchase and sale of, securities as part of a regular business while not registered with the Commission as broker-dealers, and while Defendants were not associated with an entity registered with the Commission as a broker-dealer.

47. By reason of the conduct described above, Defendants violated, and unless enjoined will likely again violate, Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)].

48. A violation of Section 15(a)(1) does not require proof of scienter.

RELIEF REQUESTED

WHEREFORE, the Commission respectfully requests that this Court:

A. Enter a permanent injunction restraining each of the Defendants, their officers, agents, servants, employees, attorneys and those persons in active concert or participation with Defendants who receive actual notice of the Order, by personal service or otherwise, and each of them from, directly or indirectly, engaging in the transactions, acts, practices, or courses of business described above, or in conduct of similar purport and object, in violation of Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)].

B. Order Defendants to disgorge ill-gotten gains and/or unjust enrichment received directly or indirectly, with pre-judgment interest thereon, as a result of the violations alleged herein, pursuant to Exchange Act Sections 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(5) and 78u(d)(7)].

C. Impose appropriate civil penalties upon Defendants pursuant to Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)].

D. Issue an Order restraining and enjoining Defendants from participating in the offering of any penny stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of any penny stock, under Exchange Act Section 21(d)(6) [15 U.S.C. § 78u(d)(6)].

E. Order Mammoth to surrender for cancellation its remaining stock, unexercised warrants, and conversion rights obtained in connection with Mammoth’s convertible notes business that are still held by Mammoth.

F. Retain jurisdiction over this action in accordance with the principles of equity and the Federal Rules of Civil Procedure to implement and carry out the terms of all orders and decrees that may be entered.

G. Grant such orders for further relief as the Court deems just and proper.

JURY DEMAND

The Commission hereby demands a trial by jury,

DATED: November 25, 2024

Respectfully submitted,

By: /s/ James M. Carlson
James M. Carlson (IL Bar No. 6269506)
P. Davis Oliver (DC Bar No 490620)

SECURITIES AND EXCHANGE COMMISSION
100 F Street, NE
Washington, D.C. 20549
Tel: (202) 766-0263

11

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Email: [email protected]
[email protected]

Attorneys for Plaintiff

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The ILND 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. (See instructions on next page of this form.)
I. (a) PLAINTIFFS
U.S. Securities and Exchange Commission
(b) County of Residence of First Listed Plaintiff
(Except in U.S. plaintiff cases)
(c) Attorneys (firm name, address, and telephone number)
P. Davis Oliver and James Carlson
Securities and Exchange Commission, 100 F St NE Washington, DC 20549
DEFENDANTS
Brad Hare
Mammoth West Corporation
County of Residence of First Listed Defendant McHenry County
(In U.S. plaintiff cases only)
Note: In land condemnation cases, use the location of the tract of land involved.
Attorneys (If Known)
James D. Sallah, Esq.
II. BASIS OF JURISDICTION (Check one box, only.)
1 U.S. Government Plaintiff
(U.S. Government not a party.)
2 U.S. Government Defendant
(Diversity
(Indicate citizenship of parties in Item III.)
III. CITIZENSHIP OF PRINCIPAL PARTIES (For Diversity Cases Only.)
( Check one box, only for plaintiff and one box for defendant.)
PTF DEF
PTF DEF
Citizen of This State ☐ 1 ☐ 1 Incorporated or Principal Place of Business in This State ☐ 4 ☐ 4
Citizen of Another State ☐ 2 ☐ 2 Incorporated and Principal Place of Business in Another State ☐ 5 ☐ 5
Citizen or Subject of a Foreign Country ☐ 3 ☐ 3 Foreign Nation ☐ 6 ☐ 6
IV. NATURE OF SUIT (Check one box, only.)
CONTRACT TORTS PRISONER PETITIONS LABOR OTHER STATUTES
110 Insurance ☐ 310 Airplane ☐ 365 Personal Injury - Product Liability ☐ 510 Motions to Vacate Sentence ☐ 710 Fair Labor Standards Act
120 Marine ☐ 315 Airplane Product Liability ☐ 367 Health Care/ Pharmaceutical Personal Injury Product Liability ☐ 530 General ☐ 720 Labor/Management Relations
130 Miller Act ☐ 320 Assault, Libel & Slander ☐ 368 Asbestos Personal Injury Product Liability ☐ 535 Death Penalty
140 Negotiable Instrument ☐ 330 Federal Employers' Liability ☐ 540 Mandamus & Other ☐ 740 Railway Labor Act
150 Recovery of Overpayment & Enforcement of Judgment ☐ 340 Marine ☐ 345 Marine Product Liability ☐ 369 Other ☐ 751 Family and Medical Leave Act
151 Medicare Act ☐ 350 Motor Vehicle ☐ 355 Motor Vehicle Product Liability ☐ 550 Civil Rights ☐ 790 Other Labor Litigation
152 Recovery of Defaulted Student Loan (Excludes Veterans) ☐ 360 Other Personal Injury ☐ 555 Prison Condition ☐ 791 Employee Retirement Income Security Act
153 Recovery of Veteran's Benefits ☐ 362 Personal Injury - Medical Malpractice ☐ 560 Civil Detainee Conditions of Confinement
160 Stockholders' Suits ☐ 370 Other Fraud ☐ 745 Other Civil Rights ☐ 820 Copyright
190 Other Contract ☐ 371 Truth in Lending ☐ 753 Other Civil Rights ☐ 830 Patent
195 Contract Product Liability ☐ 380 Other Personal ☐ 754 Other Civil Rights ☐ 835 Patent - Abbreviated ☐ 840 Trademark
196 Franchise ☐ 385 Property Damage Product Liability ☐ 845 Telephone Consumer Protection Act (TCPA)
PERSONAL PROPERTY
370 Other Fraud ☐ 835 Patent - Abbreviated ☐ 840 Trademark
371 Truth in Lending ☐ 845 Telephone Consumer Protection Act (TCPA)
380 Other Personal ☐ 850 Securities/Commodities/ Exchange
385 Property Damage Product Liability ☐ 890 Other Statutory Actions
PROPERTY RIGHTS
820 Copyright ☐ 850 Securities/Commodities/ Exchange
830 Patent ☐ 890 Other Statutory Actions
835 Patent - Abbreviated ☐ 891 Agricultural Arts
840 Trademark ☐ 893 Environmental Matters
880 Defend Trade Secrets Act of 2016 (DTSA) ☐ 895 Freedom of Information Act
893 Environmental Matters ☐ 896 Arbitration
895 Freedom of Information Act ☐ 899 Administrative Procedure Act/Review or Appeal of Agency Decision
896 Arbitration ☐ 950 Constitutionality of State Statutes
899 Administrative Procedure Act/Review or Appeal of Agency Decision
SOCIAL SECURITY
861 HIA (1395f)
862 Black Lung (923)
863 DIWC/DIWW (405(g))
864 SSDI Title XVI
865 RSI (405(g))
861 HIA (1395f)
862 Black Lung (923)
863 DIWC/DIWW (405(g))
864 SSDI Title XVI
865 RSI (405(g))
REAL PROPERTY
210 Land Condemnation ☐ 440 Other Civil Rights ☐ 422 Appeal 28 USC 158 ☐ 625 Drug Related Seizure of Property 21 USC 881
220 Foreclosure ☐ 441 Voting ☐ 423 Withdrawal 28 USC 157
230 Rent Lease & Ejection ☐ 442 Employment ☐ 690 Other
240 Torts to Land ☐ 443 Housing/Accommodations ☐ 691 Other
245 Tort Product Liability ☐ 445 Amer. w/ Disabilities- Employment ☐ 692 Other
290 All Other Real Property ☐ 446 Amer. w/Disabilities - Other ☐ 693 Other
245 Tort Product Liability ☐ 446 Amer. w/Disabilities - Other ☐ 693 Other
CIVIL RIGHTS
440 Other Civil Rights
441 Voting
442 Employment
443 Housing/Accommodations
445 Amer. w/ Disabilities- Employment
446 Amer. w/Disabilities - Other
448 Education
BANKRUPTCY
422 Appeal 28 USC 158
423 Withdrawal 28 USC 157
FORFEITURE/PENALTY
625 Drug Related Seizure of Property 21 USC 881
690 Other
691 Other
692 Other
693 Other
IMMIGRATION
462 Naturalization Application
463 Habeas Corpus – Alien Detainee (Prisoner Petition)
465 Other Immigration Actions
SOCIAL SECURITY
861 HIA (1395f)
862 Black Lung (923)
863 DIWC/DIWW (405(g))
864 SSDI Title XVI
865 RSI (405(g))
FEDERAL TAXES
870 Taxes (U.S. Plaintiff or Defendant
871 IRS—Third Party 26 USC 7609
V. ORIGIN (Check one box, only.)
1 Original Proceeding
2 Removed from State Court
3 Remanded from Appellate Court
4 Reinstated or Reopened
5 Transferred from Another District (specify)
6 Multidistrict Litigation - Transfer
7 Multidistrict Litigation - Direct File
VI. CAUSE OF ACTION (Enter U.S. Civil Statute under which you are filing and write a brief statement of cause.)
Section 15(a)(1) of the Securities and Exchange Act of 1934
VII. PREVIOUS BANKRUPTCY MATTERS (For nature of suit 422 and 423, enter the case number and judge for any associated bankruptcy matter previously adjudicated by a judge of this Court. Use a separate attachment if necessary.)
VIII. REQUESTED IN COMPLAINT:
☐ Check if this is a class action under Rule 23, F.R.CV.P.
Demand $
CHECK Yes only if demanded in complaint:
Jury Demand: ☐ Yes ☐ No
IX. RELATED CASE(S) IF ANY (See instructions):
Judge
Case Number
X. Is this a previously dismissed or remanded case?
☐ Yes ☐ No If yes, Case #
Name of Judge
Date: November 25, 2024
Signature of Attorney of Record /s/ James M. Carlson

INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS '44
Authority for Civil Cover Sheet
The ILND 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of Court for each civil complaint filed. The attorney filing a case should complete the form as follows:
I.(a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use (b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the (c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting in this section "(see attachment)".
II. Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions be shown in pleadings. Place an "X" United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here. United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box. Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity cases.)
III. Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this section for each principal party.
IV. Nature of Suit. Place an "X" in the appropriate box. If there are multiple nature of suit codes associated with the case, pick the nature of suit code that is most applicable. Click here for: Nature of Suit Code Descriptions.
V. Origin. Place an "X" in one of the seven boxes.
Original Proceedings. (1) Cases which originate in the United States district courts.
Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441.
Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing date.
Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date.
Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or multidistrict litigation transfers.
Multidistrict Litigation – Transfer. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C.
Multidistrict Litigation – Direct File. (8) Check this box when a multidistrict case is filed in the same district as the Master MDL docket.
PLEASE NOTE THAT THERE IS NOT AN ORIGIN CODE 7. Origin Code 7 was used for historical records and is no longer relevant due to changes in statute.
VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional statutes unless diversity. Example: U.S. Civil Statute: 47 USC 553 Brief Description: Unauthorized reception of cable service
VII. Requested in Complaint. Class Action. Place an "X" in this box if you are filing a class action under Rule 23, F.R.Cv.P.
Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction.
Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded.
VIII. Related Cases. This section of the JS 44 is used to reference related pending cases, if any. If there are related pending cases, insert the docket numbers and the corresponding judge names for such cases.
Date and Attorney Signature. Date and sign the civil cover sheet.

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AO 440 (Rev. 06/12) Summons in a Civil Action
UNITED STATES DISTRICT COURT
for the
Northern District of Illinois
Securities and Exchange Commission
v.
Brad Hare and Mammoth West Corporation
Civil Action No. 24-cv-12134
Defendant(s)
SUMMONS IN A CIVIL ACTION
To: (Defendant's name and address) Brad Hare
2715 Knob Hill Road
Johnsberg, IL 60051
A lawsuit has been filed against you.
Within 21 days after service of this summons on you (not counting the day you received it) — or 60 days if you are the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ. P. 12 (a)(2) or (3) — you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of the Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiff or plaintiff's attorney, whose name and address are:
James M. Carlson
Securities and Exchange Commission
100 F ST. NE
Washington DC 20549
If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint. You also must file your answer or motion with the court.
CLERK OF COURT
Date: 11/25/2024
Signature of Clerk or Deputy Clerk

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AO 440 (Rev. 06/12) Summons in a Civil Action (Page 2)

Civil Action No. 24-cv-12134

PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))

This summons for (name of individual and title, if any) was received by me on (date).

□ I personally served the summons on the individual at (place) on (date); or

□ I left the summons at the individual’s residence or usual place of abode with (name), a person of suitable age and discretion who resides there, on (date), and mailed a copy to the individual’s last known address; or

□ I served the summons on (name of individual), who is designated by law to accept service of process on behalf of (name of organization) on (date); or

□ I returned the summons unexecuted because ; or

□ Other (specify):

My fees are $ for travel and $ for services, for a total of $ 0.00.

I declare under penalty of perjury that this information is true.

Date: ________________

Server’s signature

Printed name and title

Server’s address

Additional information regarding attempted service, etc:

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AO 440 (Rev. 06/12) Summons in a Civil Action

UNITED STATES DISTRICT COURT
for the
Northern District of Illinois

Securities and Exchange Commission

AO 440 (Rev. 06/12) Summons in a Civil Action (Page 2)

Civil Action No. 24-cv-12134

PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))

This summons for (name of individual and title, if any) was received by me on (date).

□ I personally served the summons on the individual at (place) on (date); or

□ I left the summons at the individual’s residence or usual place of abode with (name), a person of suitable age and discretion who resides there, on (date), and mailed a copy to the individual’s last known address; or

□ I served the summons on (name of individual), who is designated by law to accept service of process on behalf of (name of organization) on (date); or

□ I returned the summons unexecuted because; or

□ Other (specify):

My fees are $ for travel and $ for services, for a total of $ 0.00.

I declare under penalty of perjury that this information is true.

Date: ____________________________

Server’s signature

Printed name and title

Server’s address

Additional information regarding attempted service, etc:

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
v.
BRAD HARE and
MAMMOTH WEST CORPORATION,
Defendants.

Civil No. 24-12134

Complaint
Jury Demand

COMPLAINT

Plaintiff Securities and Exchange Commission (the “SEC” or “Commission”) for its Complaint against Defendants Brad Hare (“Hare”) and Mammoth West Corporation d/b/a Mammoth Corporation (“Mammoth”) (collectively “Defendants”) alleges as follows:

SUMMARY

1. From at least April 2018 through early 2024 (the “Relevant Time Period”), Brad Hare and his wholly controlled business entity, Mammoth West Corporation, bought and sold billions of shares of newly issued shares of microcap securities, otherwise known as penny stocks, and generated millions of dollars from those sales. In doing so, the Defendants failed to comply with the SEC’s mandatory dealer registration requirements under the federal securities laws. Mammoth as part of a regular business and through Hare – its controlling principal – engaged in the buying and selling of securities for Mammoth’s own account.

2. Mammoth’s business model, as designed by Hare, included repeatedly purchasing convertible notes, a type of security, from penny stock issuers and penny stock debtholders, converting the notes into stock at a large discount from the prevailing market price, and selling the newly issued shares into the public markets for a substantial profit. Specifically, Mammoth acquired approximately 47 convertible notes during the relevant period and converted notes involving approximately 19 different companies issuing stock.

3. Mammoth, through Hare, gained over $2.5 million dollars in net profits from selling the shares, which consisted of the difference between the costs of acquiring the convertible debt securities and the trading proceeds obtained from converting the debt into shares and then selling the shares into the market. Defendants' illegal activities, which generated significant profits for themselves, diluted the value of shares held by other shareholders.

4. By engaging in a regular business model of buying convertible notes and selling the resulting newly issued shares of microcap stock into the public market, the Defendants operated as unregistered securities dealers.

5. By failing to comply with the dealer registration requirements of the federal securities laws, Mammoth and Hare avoided the regulatory obligations that govern dealer conduct in the marketplace, including submitting to regulatory inspections and oversight, following financial responsibility rules governing brokers and dealers, and maintaining books and records in accordance with applicable regulatory requirements.

6. By virtue of the conduct alleged in this Complaint, Mammoth and Hare have violated Section 15(a)(1) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78o(a)(1)].

7. Unless Mammoth and Hare are restrained and enjoined, they will continue to engage in the acts, practices, transactions, and courses of business set forth in this Complaint, or in acts, practices, transactions, and courses of business of similar type and object.

8. The SEC brings this action seeking injunctive relief, disgorgement with prejudgment interest, civil penalties, and other appropriate and necessary equitable relief, including penny stock bars and an order that Mammoth surrender for cancellation any shares or conversion rights obtained through its convertible notes business which are still held by Mammoth.

JURISDICTION AND VENUE

9. This Court has jurisdiction over this action pursuant to Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].

10. Hare, during the Relevant Time Period, resided in the Northern District of Illinois. Mammoth's principal place of business is within this district. And certain of the acts, practices, and course of business constituting violations of the federal securities laws alleged herein occurred in this district. Venue therefore is proper in this district pursuant to Section 27 of the Exchange Act [15 U.S.C. § 78aa].

DEFENDANTS

11. Mammoth, doing business as Mammoth Corporation, is a Wyoming corporation created in 2001, with its principal place of business in Lake Zurich, Illinois, in this district. Hare founded Mammoth and is its sole officer and beneficial owner. During the Relevant Period, Mammoth was engaged in the convertible notes business. Mammoth had approximately three other employees working on its behalf during the Relevant Period. Mammoth has never been registered with the Commission in any capacity.

12. Hare, age 55, resides in Johnsburg, Illinois. He is the sole officer and beneficial owner of Mammoth and exercises ultimate decision-making authority over its business. Hare received salary from Mammoth. During the relevant period, Hare was not registered with the Commission in any capacity, including as a broker-dealer, nor associated with any registered entity. Hare was associated with broker-dealers as a registered representative from 1988–1996 and 2015–2017.

FACTUAL ALLEGATIONS

13. Hare has owned, controlled, and funded Mammoth since its inception, including during the Relevant Time Period. In addition, Hare made all investment and trading decisions on behalf of Mammoth, including for all transactions described below.

A. Defendants Bought Convertible Notes from Penny Stock Issuers, Converted Them to Newly Issued Shares of Stock, and Sold Large Volumes of Shares in the Market as Part of their Regular Business

14. During the Relevant Time Period, Hare operated Mammoth, a business in Lake Zurich, Illinois, through which Mammoth regularly purchased convertible notes from penny stock issuers and penny stock debtholders in need of cash.

15. After holding the notes for approximately six to twelve months or acquiring existing notes that had already been held, Hare converted Mammoth’s notes into newly issued shares of stock at a deeply discounted price negotiated in advance of purchase and sold that stock into the market at a profit.

16. Mammoth, through Hare, frequently engaged in convertible note transactions as part of its regular business.

17. Mammoth was a well-known debtholder and lender to penny stock issuers, and Mammoth and Hare held themselves out to the public as being willing to buy convertible notes as part of Mammoth’s regular business operations. The Defendants generated business through industry referrals, advertising on a website, and soliciting business through Hare’s database of business contacts that he had developed over many years.

18. Hare personally negotiated the terms of the convertible notes that Mammoth purchased directly from penny stock issuers. As a result of Hare's negotiations, Mammoth generally received very favorable terms. On behalf of Mammoth, Hare signed the securities purchase agreements by which Mammoth acquired the convertible notes.

19. The terms negotiated by Hare typically included: (a) a nine-month to two-year maturity date; (b) principal amounts between $6,000 and $2,200,000; (c) interest rates around 18% in the event of default; and (d) steep prepayment penalties.

20. The convertible notes acquired by Mammoth, through Hare, also included a term allowing the conversion of debt into shares at a significant discount to the prevailing market price, which was central to the success of the business plan.

21. The term typically allowed Mammoth, in its sole discretion, to convert the debt into the issuer's common stock at a market-adjustable price of 40% to 50% of the lowest trading price of the stock in the 10 to 90 days preceding each conversion. This term, which gave Mammoth a spread or markup on the stock that it sold, is a common attribute of a securities dealer.

22. Mammoth, through Hare, also typically negotiated an "original issue discount" when it purchased a note. This discount entitled Mammoth to acquire a note for a price less than the face value of the note but to convert the note to stock based on the face value of the note. The amount of the original issue discount varied but was typically 5% to 10% of the total note amount.

B. Defendants' Activities as Unregistered Dealers Yielded Significant Profits

23. The newly issued stock that Mammoth received through the conversion process was restricted. SEC Rule 144 enables non-affiliates to acquire restricted stock directly from the issuer in a private transaction and to resell it into the market after observing a holding period, among other requirements. [See 17 C.F.R. § 210.144]. Mammoth often began the conversion process soon after the Rule 144 holding period for the notes expired, or, in the event that Mammoth had purchased a note for which the holding period had already expired, soon after acquisition of the note. Hare submitted the conversion notices to the issuers himself or through employees of Mammoth who acted at Hare’s direction.

24. Mammoth generally converted the notes in several increments because the notes’ terms typically restricted Mammoth from owning more than 4.9% or 9.9% of an issuer’s outstanding shares.

25. Mammoth, through Hare, obtained billions of shares of stock directly from issuers through repeated note conversions and not from purchases in the secondary market. These shares were newly issued, and the sales of the shares into the market significantly increased both the amount of shares in the hands of the public and the issuers’ outstanding unrestricted share totals. Selling large quantities of newly issued shares into the market is a common attribute of a securities dealer.

26. Hare personally, or through Mammoth employees acting at his direction, arranged for the converted stock to be transferred electronically to Mammoth’s brokerage accounts. As part of this process, Hare obtained attorney opinion letters to assure Mammoth’s brokerage firms that the converted stock was no longer restricted and could be resold to the public.

27. Once the shares were deposited into Mammoth’s brokerage accounts, Mammoth, through Hare, typically began selling the shares as rapidly as the market would bear without depressing the issuer’s stock price, usually within a few days or weeks of conversion. Hare did so to lock in Mammoth’s profits.

28. Between April 1, 2018 and January 2024, Mammoth, through Hare, submitted nearly 100 conversion notices and sold over 11 billion newly issued shares of common stock into the public markets.

29. Mammoth’s profits from the sale of newly issued shares are attributable primarily to the discount Mammoth received on the converted stock, rather than from any appreciation in the share price.

30. Mammoth, through Hare, often reaped significant profits on its convertible note transactions within a short period of time. For example, on January 18, 2019, Mammoth, through Hare, purchased a convertible promissory note for $150,000 from a debtholder of penny stock Issuer 1. The promissory note had a face value principal amount of $157,062.

31. Pursuant to the transaction, Mammoth, through Hare (i) entered into an agreement with Issuer 1 to restate the convertible promissory note in Mammoth’s name; and (ii) obtained an attorney opinion letter opining that the Rule 144 period had expired, and that Mammoth could begin converting the note into shares immediately.

32. On or about January 22, 2019, February 1, 2019, February 11, 2019, and March 1, 2019, Mammoth, through Hare, submitted conversion notices to its broker-dealer and Issuer 1’s transfer agent to effectuate the conversion of the note into over 1.4 billion shares of Issuer 1.

33. The shares were obtained at a significant discount because the terms of the note entitled Mammoth to obtain shares at 50% of the lowest trading price of Issuer 1’s shares over the preceding year. After the shares were acquired and deposited, Mammoth sold them almost immediately. Between January 30, 2019, and March 13, 2019, Mammoth, through Hare, sold 1.4 billion shares of Issuer 1, reaping trading proceeds of over $336,000.

34. Defendants' convertible notes business was lucrative. Specifically, Mammoth generated over $2.5 million dollars in net trading profits from the post-conversion sale of the newly issued shares, and Mammoth transferred hundreds of thousands of dollars in salary to Hare as the sole officer and beneficial owner of the company.

C. Defendants Bought and Sold Penny Stocks

35. Virtually all of the stock Defendants bought and sold were penny stocks that did not meet any of the exceptions from the definition of a "penny stock," as defined by Exchange Act 3(a)(51) and Exchange Act Rule 3a51-1. [15 U.S.C. Section 78c(a)(51); 17 C.F.R. Section 240.3a51-1].

36. Defendants therefore participated in the offering of penny stock to investors by acting as securities dealers engaged in the buying and selling of penny stocks.

D. Defendants Violated the Federal Securities Laws by Acting as Unregistered Dealers

37. Any person engaged in the business of buying and selling securities for such person's account (through a broker or otherwise) as part of a regular business must register with the Securities and Exchange Commission. During the Relevant Time Period, Mammoth, through Hare, was engaged in the business of buying and selling securities for its own account and was not registered with the SEC.

38. Defendants used means or instrumentalities of interstate commerce to buy and sell securities as part of their regular business. For example, Defendants placed trades on national securities exchanges through a broker and communicated with the borrower companies and brokers using national telephone and other electronic communications networks.

39. During the Relevant Time Period, neither Mammoth nor its founder Hare was registered with the SEC as a dealer.

40. During the Relevant Period, Hare was not associated with a dealer registered with the SEC.

41. A broker-dealer who seeks to register with the Commission must file an application on a form called Form BD. To register as a dealer, the applicant must meet the statutory requirements to engage in a business that involves high professional standards.

42. Registration with the Commission requires the dealer to provide important information about its business, including but not limited to the names of the direct and indirect owners and executive officers of the business, certain arrangements with other persons or entities, the identities of those who control the business, the states in which the dealer does business, past criminal or regulatory actions against the dealer or any affiliated person that controls the business, and financial information, including bankruptcy history.

43. Registration also requires the dealer to join a self-regulatory organization, or a national security exchange, which assists the Commission in regulating the activities of registered dealers. Finally, registered dealers are subject to inspection by Commission staff and the Financial Industry Regulatory Authority (“FINRA”) to monitor compliance with the securities laws.

THIS ACTION IS TIMELY FILED

44. Defendants agreed to toll any statute of limitations applicable to the claims alleged herein during the period from April 1, 2023, to the present.

CLAIM FOR RELIEF

Violations of Section 15(a)(1) of the Exchange Act [15 U.S.C. §78o(a)]
(Against All Defendants)

45. The SEC re-alleges and incorporates by reference the allegations set forth in paragraphs 1 through 44 above.

46. By engaging in the conduct described above, Defendants made use of the mails or other means or instrumentalities of interstate commerce to effect transactions in, to induce, and to attempt to induce, the purchase and sale of, securities as part of a regular business while not registered with the Commission as broker-dealers, and while Defendants were not associated with an entity registered with the Commission as a broker-dealer.

47. By reason of the conduct described above, Defendants violated, and unless enjoined will likely again violate, Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)].

48. A violation of Section 15(a)(1) does not require proof of scienter.

RELIEF REQUESTED

WHEREFORE, the Commission respectfully requests that this Court:

A. Enter a permanent injunction restraining each of the Defendants, their officers, agents, servants, employees, attorneys and those persons in active concert or participation with Defendants who receive actual notice of the Order, by personal service or otherwise, and each of them from, directly or indirectly, engaging in the transactions, acts, practices, or courses of business described above, or in conduct of similar purport and object, in violation of Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)].

B. Order Defendants to disgorge ill-gotten gains and/or unjust enrichment received directly or indirectly, with pre-judgment interest thereon, as a result of the violations alleged herein, pursuant to Exchange Act Sections 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(5) and 78u(d)(7)].

C. Impose appropriate civil penalties upon Defendants pursuant to Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)].

D. Issue an Order restraining and enjoining Defendants from participating in the offering of any penny stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of any penny stock, under Exchange Act Section 21(d)(6) [15 U.S.C. § 78u(d)(6)].

E. Order Mammoth to surrender for cancellation its remaining stock, unexercised warrants, and conversion rights obtained in connection with Mammoth’s convertible notes business that are still held by Mammoth.

F. Retain jurisdiction over this action in accordance with the principles of equity and the Federal Rules of Civil Procedure to implement and carry out the terms of all orders and decrees that may be entered.

G. Grant such orders for further relief as the Court deems just and proper.

JURY DEMAND

The Commission hereby demands a trial by jury,

DATED: November 25, 2024

Respectfully submitted,

By: /s/ James M. Carlson
James M. Carlson (IL Bar No. 6269506)
P. Davis Oliver (DC Bar No 490620)

SECURITIES AND EXCHANGE COMMISSION
100 F Street, NE
Washington, D.C. 20549
Tel: (202) 766-0263

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Case: 1:24-cv-12134 Document #: 1 Filed: 11/25/24 Page 12 of 12 PageID #:12

Email: [email protected]
[email protected]

Attorneys for Plaintiff

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ILND 44 (Rev. 08/23) CASE: 1:24-cv-12134 Document #: 1-1 Filed: 11/25/24 Page 1 of 2 PagID #:13
The ILND 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. (See instructions on next page of this form.)
I. (a) PLAINTIFFS
U.S. Securities and Exchange Commission
(b) County of Residence of First Listed Plaintiff
(Except in U.S. plaintiff cases)
(c) Attorneys (firm name, address, and telephone number)
P. Davis Oliver and James Carlson
Securities and Exchange Commission, 100 F St NE Washington, DC 20549
DEFENDANTS
Brad Hare
Mammoth West Corporation
County of Residence of First Listed Defendant McHenry County
(In U.S. plaintiff cases only)
Note: In land condemnation cases, use the location of the tract of land involved.
Attorneys (If Known)
James D. Sallah, Esq.
II. BASIS OF JURISDICTION (Check one box, only.)
1 U.S. Government Plaintiff
(U.S. Government not a party.)
2 U.S. Government Defendant
(Diversity (Indicate citizenship of parties in Item III.))
III. CITIZENSHIP OF PRINCIPAL PARTIES (For Diversity Cases Only.)
(Check one box, only for plaintiff and one box for defendant.)
PTF DEF
PTF DEF
Citizen of This State ☐ 1 ☐ 1 Incorporated or Principal Place of Business in This State ☐ 4 ☐ 4
Citizen of Another State ☐ 2 ☐ 2 Incorporated and Principal Place of Business in Another State ☐ 5 ☐ 5
Citizen or Subject of a Foreign Country ☐ 3 ☐ 3 Foreign Nation ☐ 6 ☐ 6
IV. NATURE OF SUIT (Check one box, only.)
CONTRACT TORTS PRISONER PETITIONS LABOR OTHER STATUTES
110 Insurance 310 Airplane 510 Motions to Vacate Sentence 710 Fair Labor Standards Act
120 Marine 315 Airplane Product Liability 530 General 720 Labor/Management Relations
130 Miller Act 340 Marine 535 Death Penalty
140 Negotiable Instrument 345 Marine Product Liability 540 Mandamus & Other
150 Recovery of Overpayment 350 Motor Vehicle 550 Civil Rights
& Enforcement of Judgment 355 Motor Vehicle Product 555 Prison Condition
151 Medicare Act 360 Other Personal Injury 560 Civil Detainee Conditions of Confinement
152 Recovery of Defaulted 361 Asbestos Personal 740 Railway Labor Act
Student Loan Liability 751 Family and Medical Leave Act
(Excludes Veterans) 755 Civil Rights
153 Recovery of Veteran's 755 Prison Condition
Benefits 790 Other Labor Litigation
160 Stockholders' Suits 791 Employee Retirement Income Security Act
190 Other Contract 410 Antitrust
195 Contract Product Liability 430 Banks and Banking
196 Franchise 450 Commerce
460 Deportation
470 Racketeer Influenced and Corrupt Organizations
480 Consumer Credit
490 Cable/Sat TV
500 Securities/Commodities/ Exchange
510 False Claims Act
520 Qui Tam (31 USC 3729 (a))
530 Truth in Lending
540 Copyright
550 Consumer Credit
560 Defend Trade Secrets Act of 2016 (DTSA)
570 Telephone Consumer Protection Act (TCPA)
580 Copyright
590 Cable/Sat TV
600 Securities/Commodities/ Exchange
610 False Claims Act
620 Qui Tam (31 USC 3729 (a))
630 Truth in Lending
640 Copyright
650 Patent
660 Patent - Abbreviated New Drug Application
670 Trademark
680 Defend Trade Secrets Act of 2016 (DTSA)
690 Copyright
700 Patent
710 False Claims Act
720 Qui Tam (31 USC 3729 (a))
730 Truth in Lending
740 Copyright
750 Patent
760 False Claims Act
770 Qui Tam (31 USC 3729 (a))
780 Truth in Lending
790 Copyright
800 Patent
810 False Claims Act
820 Copyright
830 Patent
840 Trademark
850 Securities/Commodities/ Exchange
860 False Claims Act
870 Qui Tam (31 USC 3729 (a))
880 Truth in Lending
890 Copyright
900 Patent
910 Trademark
920 False Claims Act
930 Qui Tam (31 USC 3729 (a))
940 Truth in Lending
950 Copyright
960 Patent
970 Trademark
980 False Claims Act
990 Qui Tam (31 USC 3729 (a))
999 Truth in Lending
PERSONAL INJURY 365 Personal Injury - Product Liability
367 Health Care/ Pharmaceutical Personal Injury Product Liability
368 Asbestos Personal Injury Product Liability
369 Other Personal Injury
370 Other Fraud
371 Truth in Lending
380 Other Personal Property Damage
385 Property Damage Product Liability
PERSONAL PROPERTY
PROPERTY RIGHTS
820 Copyright
830 Patent
835 Patent - Abbreviated New Drug Application
840 Trademark
880 Defend Trade Secrets Act of 2016 (DTSA)
890 Other Statutory Actions
900 Agricultural Arts
910 Environmental Matters
920 Freedom of Information Act
930 Arbitration
940 Administrative Procedure Act/Review or Appeal of Agency Decision
950 Constitutionality of State Statutes
REAL PROPERTY
CIVIL RIGHTS
BANKRUPTCY
FORFEITURE/PENALTY
SOCIAL SECURITY
210 Land Condemnation 440 Other Civil Rights 422 Appeal 28 USC 158 625 Drug Related Seizure of Property 861 HIA (1395ff)
220 Foreclosure 441 Voting 423 Withdrawal 21 USC 881 862 Black Lung (923)
230 Rent Lease & Ejection 442 Employment 28 USC 157 863 DIWC/DIWW (405(g))
240 Torts to Land 443 Housing/Accommodations 690 Other 864 SSDI Title XVI
245 Tort Product Liability 445 Amer. w/ Disabilities- Employment 865 RSI (405(g))
290 All Other Real Property 446 Amer. w/Disabilities - Other
448 Education
IMMIGRATION
462 Naturalization Application
463 Habeas Corpus - Alien Detainee (Prisoner Petition)
465 Other Immigration Actions
FEDERAL TAXES
870 Taxes (U.S. Plaintiff or Defendant
871 IRS—Third Party 26 USC 7609
V. ORIGIN (Check one box, only.)
1 Original Proceeding
2 Removed from State Court
3 Remanded from Appellate Court
4 Reinstated or Reopened
5 Transferred from Another District (specify)
6 Multidistrict Litigation - Transfer
7 Multidistrict Litigation - Direct File
VI. CAUSE OF ACTION (Enter U.S. Civil Statute under which you are filing and write a brief statement of cause.)
Section 15(a)(1) of the Securities and Exchange Act of 1934
VII. PREVIOUS BANKRUPTCY MATTERS (For nature of suit 422 and 423, enter the case number and judge for any associated bankruptcy matter previously adjudicated by a judge of this Court. Use a separate attachment if necessary.)
VIII. REQUESTED IN COMPLAINT:
☐ Check if this is a class action under Rule 23, F.R.CV.P.
Demand $
CHECK Yes only if demanded in complaint:
Jury Demand: ☐ Yes ☐ No
IX. RELATED CASE(S) IF ANY (See instructions):
Judge Case Number
X. Is this a previously dismissed or remanded case?
☐ Yes ☐ No If yes, Case # Name of Judge
Date: November 25, 2024
Signature of Attorney of Record /s/ James M. Carlson

Case: 1:24-cv-12134 Document #: 1-1 Filed: 11/25/24 Page 2 of 2 PagID #:14
INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS 44
Authority for Civil Cover Sheet
The ILND 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of Court for each civil complaint filed. The attorney filing a case should complete the form as follows:
I.(a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use (b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the (c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting in this section "(see attachment)".
II. Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions be shown in pleadings. Place an "X" United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here. United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box. Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity cases.)
III. Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this section for each principal party.
IV. Nature of Suit. Place an "X" in the appropriate box. If there are multiple nature of suit codes associated with the case, pick the nature of suit code that is most applicable. Click here for: Nature of Suit Code Descriptions.
V. Origin. Place an "X" in one of the seven boxes.
Original Proceedings. (1) Cases which originate in the United States district courts.
Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441.
Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing date.
Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date.
Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or multidistrict litigation transfers.
Multidistrict Litigation – Transfer. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C.
Multidistrict Litigation – Direct File. (8) Check this box when a multidistrict case is filed in the same district as the Master MDL docket.
PLEASE NOTE THAT THERE IS NOT AN ORIGIN CODE 7. Origin Code 7 was used for historical records and is no longer relevant due to changes in statute.
VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional statutes unless diversity. Example: U.S. Civil Statute: 47 USC 553 Brief Description: Unauthorized reception of cable service
VII. Requested in Complaint. Class Action. Place an "X" in this box if you are filing a class action under Rule 23, F.R.Cv.P.
Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction.
Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded.
VIII. Related Cases. This section of the JS 44 is used to reference related pending cases, if any. If there are related pending cases, insert the docket numbers and the corresponding judge names for such cases.
Date and Attorney Signature. Date and sign the civil cover sheet.

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Case: 1:24-cv-12134 Document #: 1-2 Filed: 11/25/24 Page 1 of 2 PageID #:15

AO 440 (Rev. 06/12) Summons in a Civil Action

UNITED STATES DISTRICT COURT
for the
Northern District of Illinois

Securities and Exchange Commission

Case: 1:24-cv-12134 Document #: 1-2 Filed: 11/25/24 Page 2 of 2 PageID #:16
AO 440 (Rev. 06/12) Summons in a Civil Action (Page 2)
Civil Action No. 24-cv-12134
PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))
This summons for (name of individual and title, if any) was received by me on (date) .
□ I personally served the summons on the individual at (place) on (date) ; or
□ I left the summons at the individual’s residence or usual place of abode with (name) , a person of suitable age and discretion who resides there, on (date) , and mailed a copy to the individual’s last known address; or
□ I served the summons on (name of individual) , who is designated by law to accept service of process on behalf of (name of organization) on (date) ; or
□ I returned the summons unexecuted because ; or
□ Other (specify):
My fees are $ for travel and $ for services, for a total of $ 0.00 .
I declare under penalty of perjury that this information is true.
Date: ___________________________
Server’s signature
Printed name and title
Server’s address
Additional information regarding attempted service, etc:

Case: 1:24-cv-12134 Document #: 1-3 Filed: 11/25/24 Page 1 of 2 PageID #:17

AO 440 (Rev. 06/12) Summons in a Civil Action

UNITED STATES DISTRICT COURT
for the
Northern District of Illinois

Securities and Exchange Commission

Case: 1:24-cv-12134 Document #: 1-3 Filed: 11/25/24 Page 2 of 2 PageID #:18
AO 440 (Rev. 06/12) Summons in a Civil Action (Page 2)
Civil Action No. 24-cv-12134
PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))
This summons for (name of individual and title, if any) was received by me on (date) .
□ I personally served the summons on the individual at (place) on (date) ; or
□ I left the summons at the individual’s residence or usual place of abode with (name) , a person of suitable age and discretion who resides there, on (date) , and mailed a copy to the individual’s last known address; or
□ I served the summons on (name of individual) , who is designated by law to accept service of process on behalf of (name of organization) on (date) ; or
□ I returned the summons unexecuted because ; or
□ Other (specify):
My fees are $ for travel and $ for services, for a total of $ 0.00 .
I declare under penalty of perjury that this information is true.
Date: ___________________________
Server’s signature
Printed name and title
Server’s address
Additional information regarding attempted service, etc: