ATTORNEYS CHARGED BY SEC IN MICROCAP FRAUD SCHEME
November 6, 2017 | Back to News
In October 2017, the U.S. Securities and Exchange Commission (SEC) filed a pair of related lawsuits — one against Hillsboro Beach, Florida attorney James M. Schneider, and one against Nevada City, California attorney Andrew H. Wilson — alleging that the two attorneys helped facilitate a microcap fraud scheme being perpetrated by a trio of businessmen who have already been imprisoned for the fraud.
According to the SEC’s Complaints — filed in the U.S. District Court for the Southern District of Florida — businessmen Steven Sanders, Daniel McKelvey, and Alvin S. Mirman secretly controlled 22 undisclosed “blank check” companies. Such companies have no actual business operations, which makes them attractive targets for those seeking reverse mergers for use in pump-and-dump schemes. As the SEC alleged in its Complaints, Schneider and Wilson provided legal opinion letters falsely stating that the companies’ shares were validly issued or were free to be re-sold on the public market. Schneider is purported to have issued forty false opinion letters and referred numerous buyers to Sanders, McKelvey, and Mirman (who have all been convicted and imprisoned in criminal proceedings related to the fraud). Wilson is alleged to have issued five opinion letters that wrongfully led to restricted securities of at least three different issuers be sold on the public market.
“Lawyers are critical gatekeepers when it comes to protecting the integrity of our capital markets,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “Schneider and Wilson failed as gatekeepers and as our complaints allege, played a crucial role in facilitating a wide-ranging microcap fraud.”
The Complaints charge Schneider with violating the registration and antifraud provisions of the federal securities laws and assert he aided and abetted Sanders, McKelvey, and Mirman’s securities laws violations. Wilson is charged with registration violations. The SEC has requested that the Court order a return of allegedly ill-gotten gains plus interest, impose civil penalties against Schneider and Wilson, bar Schneider and Wilson from the penny-stock business, and enter other relief.
Silver Miller has decades of experience helping investors duped into fraudulent or otherwise misleading investments, including pump-and-dump and penny-stock schemes, recover their wrongfully-taken investment funds. Additionally, we have litigated and investigated numerous cases of professional malpractice in which attorneys have fallen below, or outright ignored, the high standards of integrity and professionalism to which they must adhere in practicing law. If you are concerned that an investment you made was misrepresented to you or that your trusted attorney has led you astray, contact Silver Miller for a no-cost, no-obligation consultation to discuss you legal rights.
See the SEC’s Complaints:
SEC v. Schneider
SEC v. Wilson