SEC Charges Miami-Beach Unregistered Penny Stock Dealer in Southern District of Florida
On March 24th, 2020, the Securities and Exchange Commission (SEC) announced charges against Justin W. Keener and his company JMJ Financial. According to federal regulators, the Miami Beach man unlawfully acted as an unregistered penny stock dealer. The agency alleges that Mr. Keener generated nearly $22 million in ill-gotten gains—violating federal law and undermining the integrity of markets in doing so. Below, our Miami penny stock lawyers provide an overview of the SEC complaint against Justin Keener.
Securities and Exchange Commission: Miami Beach Man Acted as Unregistered Penny Stock Dealer
The SEC filed a complaint in the United States District Court for the Southern District of Florida. During the relevant time period (2015 to 2018) the agency contends that the defendant, Justin W. Keener, then a resident of Miami Beach, issued billions of shares of penny stocks.
Also referred to as microcap stocks or nanocap stocks, a penny stock is typically defined as one that trades at less than $5 per share. Due to their relatively light volume and low prices, these types of securities are notoriously risky and can be conduits for fraud.
Convertible Notes Were Pushed, Penny Stock Was Issued
To obtain shares of penny stocks, Mr. Keener bought convertible notes (a form of short term debt) from companies that were in need of immediate cash infusions. After waiting a few months, he converted those notes into discounted stock shares which he sold into the public market. The SEC believes that Mr. Keener did this with nearly 100 companies. He employed representatives to solicit business. In total, he took in more than $21.5 million in profit.
Despite issuing a large amount of microcap stock into the public market, Mr. Keener never registered as a dealer. By failing to do so, he avoided many of our country’s most important regulatory obligations; specifically, the failure to register denied inspections and oversight of his financial books and records.
Proposed Sanctions: Disgorgement and Permanent Penny Stock Bar
In bringing charges against Mr. Keener, federal regulators note that the privilege of being a registered securities dealer comes with an enormous amount of responsibilities. By failing to register, the SEC alleges that Mr. Keener shirked these duties, damaged the integrity of the market, and put innocent investors at risk.
Among other things, the federal agency is seeking a finding that Mr. Keener violated the Securities Exchange Act of 1934, disgorgement of all ill-gotten gains, and a permanent bar from acting as a penny stock dealer in the United States. Investors who suffered losses in penny stocks sold by this individual may have legal options available.
Call Our Florida Penny Stock Fraud Lawyers Right Away
At Carlson & Associates, P.A., our Florida securities fraud attorneys have the skills, knowledge, and expertise to handle the full range of penny stock fraud claims. If you suffered substantial financial losses in penny stocks, we are here to help. For a confidential review of your claim, please call our Miami law office today. We represent investors in South Florida and beyond.
Resources:
sec.gov/news/press-release/2020-72
sec.gov/litigation/complaints/2020/comp-pr2020-72.pdf