SEC Brings Charges against Seven Individuals in Boiler Room Scheme

The Securities and Exchange Commission (SEC) has taken action against seven Individuals who had acted as unregistered brokers in connection with widespread boiler room activity, including Alex Forester, Michael Hicks, Yarden Krampf, Christopher Lee, Sean O'Neal, Michael Raynor, and Lee Sobel.

The SEC complaint alleges that between October 2015 and November 2019, the defendants worked as investor solicitors in several boiler-room operations engaged in a matched-trading scheme, where they made cold calls to prospective investors and pitched investments in microcap securities that the boiler room was promoting.

In return, the defendants would receive commissions from the shareholders who were paying the boiler rooms to promote the stock.

According to the SEC's complaint, the defendants received over $2.8 million in commissions through their sales and none of them were registered as a broker-dealer or associated with a registered broker-dealer at the time.

The SEC complaint was filed with the federal district court for the Central District of California on October 26, 2020, charging all of the defendants with violating the broker-dealer registration provision of Section 15(a)(1) of the Securities Exchange Act of 1934. The settlements are subject to court approval.