Former Microcap CEO Barred by SEC Following Stock Scheme Litigation

The Securities and Exchange Commission has recently closed their litigation against Kevin Gillespie. He was the former CEO of a small-cap issuer. What does this mean to the financial world and why should it matter?

Unraveling Financial Web

According to SEC’s complaint Gillespie began weaving a complex web of financial transactions in February 2017 with his associates. The web was based on the promotion of Arias Intel Corp.”ASNT”). Imagine Gillespie as a puppeteer who caused ASNT, to issue 200,000 common shares to another defendant. This was under the pretense of “consulting services”. Was it really that simple?

Stocks is a Game of Stocks

In a game similar to passing the parcel these shares then were sold onwards to a new defendant. In August 2017, the plot intensified when the group entered a second transaction. Gillespie made ASNT issue a convertible promissory to a defendant. The group agreed to sell the shares once the stock price reached the target of $5.00. The group agreed to split the profits, just like pirates would do with their looted treasure.

The SEC Charge

The SEC, as the watchdog of financial markets, has charged Gillespie of violating Section 10b of the Securities Exchange Act of 1939 and Rule 10b-5 of that Act. Imagine this as breaking one of the most sacred financial commandments.

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  • The Court entered a two-part consent judgment against Gillespie, on July 11, 2020. It was like a football referee calling foul.
  • Gillespie was prohibited from violating any of the charges. It was like being given a red-card and sent off.
  • Also, he was given a penny-stock bar and an officer and directors bar. He was also banned from playing the financial game.

Final Resolution

The Commission informed the Court on April 25, 2023 that it had no intention of seeking further relief. This ended the litigation in relation to Gillespie. It was the same as the final whistle, which signaled the end of the game.

Christopher Dunnigan and Christine Ely of the New York Regional Office handled the SEC litigation. Sheldon L. Pollock was the coach who guided his team. The SEC is also grateful for the help of the U.S. Attorney’s Office of the Southern District of California, and the Federal Bureau of Investigation. These teammates played a crucial role in this financial game.

What can we learn? Like any game, the financial world has its own rules. The consequences will be severe for those who break the rules. The SEC will make sure that justice is done.

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