Litigation Release No. 25621 / January 23, 2023
Securities and Exchange Commission v. Abujudeh, Civil Action No. 1:21-cv-04110 (E.D.N.Y. filed July 22, 2021)
On January 20, 2023, the U.S. District Court for the Eastern District of New York issued a final judgment against Charlie Abujudeh, a resident of California. Abujudeh had been charged by the Securities and Exchange Commission (SEC) for his involvement in a microcap fraud scheme that targeted retail investors. The judgment requires Abujudeh to pay a total of over $5 million.
According to the SEC’s complaint, filed on July 22, 2021, Abujudeh collaborated with others between August 2019 and September 2020 to fraudulently sell stocks of various microcap companies to investors. They accomplished this by making deceptive statements during high-pressure sales calls and email promotions. The SEC alleges that Abujudeh and his associates convinced investors to invest in the stock of companies like Odyssey Group International, Inc., Scepter Holdings, Inc., and CannaPharmaRx, Inc. Abujudeh paid stock promoters to aggressively promote Odyssey stock to unsuspecting retail investors, using false and misleading representations. Additionally, he funded email promotional campaigns and devised strategies to conceal his control over and simultaneous sale of Odyssey, Scepter, and CannaPharmaRx stock, taking advantage of the increased demand generated by the promotions. The SEC’s complaint further claims that Abujudeh funneled hundreds of thousands of dollars from the illegal Odyssey stock sales to an Odyssey insider with whom he had coordinated.
Abujudeh neither admitted nor denied the allegations in the SEC’s complaint but agreed to a final judgment. The judgment permanently prohibits him from violating the registration provisions of Section 5 and the antifraud provisions of Section 17(a) of the Securities Act of 1933, as well as the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Additionally, Abujudeh consented to a five-year penny stock bar and a five-year officer-and-director bar. He is also required to disgorge $5,423,045, pay prejudgment interest of $115,993, and a civil penalty of $414,366.
The SEC’s case against Abujudeh was handled by David D’Addio, Nita Klunder, and Paul Block of the Boston Regional Office. The SEC acknowledges the assistance provided by the Financial Industry Regulatory Authority.
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About SEC
The Securities and Exchange Commission (SEC) is a regulatory agency in the United States that oversees and enforces federal securities laws. Its primary function is to protect investors and maintain fair and efficient markets. The SEC regulates the securities industry, including stock exchanges, brokerage firms, and investment advisors. It enforces laws related to the issuance and trading of securities, such as stocks and bonds, ensuring that companies provide accurate and timely information to investors. The SEC also investigates and takes legal action against individuals or entities engaged in fraudulent activities or insider trading. Through its oversight, the SEC aims to promote transparency, stability, and confidence in the financial markets.
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