Case 1:20-cv-08101-AKH Document 1 Filed 09/30/20 Page 1 of 14
`
`MATTHEW J. GULDE*
`guldem@sec.gov
`SECURITIES AND EXCHANGE COMMISSION
`801 Cherry Street, Suite 1900
`Fort Worth, Texas 76102
` (817) 978-1410 (mjg)
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`
`SECURITIES AND EXCHANGE
`COMMISSION,
`
`
`
`Plaintiff,
`
`
`
`
`
`
`
`vs.
`
`
`
`
` 20 Civ. ________ (_____)
`
`
` JURY TRIAL DEMANDED
`
`ECF CASE
`
`AKAZOO S.A.,
`
`
`
`
`
`
`Defendant.
`
`
`
`
`
`
`
`COMPLAINT
`
`Plaintiff Securities and Exchange Commission (“SEC”), for its Complaint against
`
`Akazoo S.A. (“Defendant,” “Akazoo,” or “the Company”), alleges as follows:
`
`I.
`SUMMARY OF THE ACTION
`
`1.
`
`Over a multi-year period spanning its existence as a private and then public entity,
`
`
`
`Akazoo defrauded multiple groups of investors out of millions of dollars. It claimed to be a
`
`rapidly growing music streaming company focused on emerging markets with millions of paying
`
`monthly subscribers and over €105 million (or $124 million) in annual revenue. In reality, as it
`
`recently admitted in a public filing with the SEC, the Nasdaq-listed company had no paying
`
`users and negligible, if any, revenue.
`
` *
`
` Not admitted in SDNY, pro hac vice application filed herewith.
`
`
`
`MATTHEW J. GULDE*
`guldem@sec.gov
`SECURITIES AND EXCHANGE COMMISSION
`801 Cherry Street, Suite 1900
`Fort Worth, Texas 76102
` (817) 978-1410 (mjg)
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`
`SECURITIES AND EXCHANGE
`COMMISSION,
`
`
`
`Plaintiff,
`
`
`
`
`
`
`
`vs.
`
`
`
`
` 20 Civ. ________ (_____)
`
`
` JURY TRIAL DEMANDED
`
`ECF CASE
`
`AKAZOO S.A.,
`
`
`
`
`
`
`Defendant.
`
`
`
`
`
`
`
`COMPLAINT
`
`Plaintiff Securities and Exchange Commission (“SEC”), for its Complaint against
`
`Akazoo S.A. (“Defendant,” “Akazoo,” or “the Company”), alleges as follows:
`
`I.
`SUMMARY OF THE ACTION
`
`1.
`
`Over a multi-year period spanning its existence as a private and then public entity,
`
`
`
`Akazoo defrauded multiple groups of investors out of millions of dollars. It claimed to be a
`
`rapidly growing music streaming company focused on emerging markets with millions of paying
`
`monthly subscribers and over €105 million (or $124 million) in annual revenue. In reality, as it
`
`recently admitted in a public filing with the SEC, the Nasdaq-listed company had no paying
`
`users and negligible, if any, revenue.
`
` *
`
` Not admitted in SDNY, pro hac vice application filed herewith.
`
`
`
`Case 1:20-cv-08101-AKH Document 1 Filed 09/30/20 Page 2 of 14
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`2.
`
` Akazoo is the product of a 2019 business combination between (a) Akazoo
`
`Limited (“Old Akazoo”), a purported subscription-based online music streaming company
`
`formed in 2010 and (b) Modern Media Acquisition Corp. (“MMAC”), a special purpose
`
`acquisition company. When Akazoo took its current form, the Company held $54.8 million in
`
`investor funds as a result of the business combination: $14.2 million from MMAC’s shareholders
`
`and another $40.6 million from accredited investors (individuals and institutions) through a
`
`private investment in public equity (“PIPE”) offering at the time of the combination. The
`
`Company obtained these investor funds by grossly misrepresenting the nature and success of its
`
`music streaming business.
`
`3.
`
`The Company continued to mislead the public while its shares were traded on the
`
`Nasdaq from September 2019 to May 2020. Among other things, Akazoo claimed €64.5 million
`
`in revenue in the first half of 2019 and €15.6 million in gross profit based on thriving operations
`
`in 25 countries. In reality, Akazoo generated at most negligible revenue, operated in only a few
`
`countries, and its only significant source of funds was the $54.8 million it had raised from
`
`investors.
`
`4.
`
`After a short-seller report exposed the Company’s fraud in April 2020, Akazoo’s
`
`Board initiated an internal investigation of the Company’s operations. On May 21, 2020,
`
`Akazoo described the results of the internal investigation in a Form 6-K filed with the SEC,
`
`admitting that “former members of Akazoo’s management team and associates defrauded
`
`Akazoo’s investors…by materially misrepresenting Akazoo’s business, operations, and financial
`
`results as part of a multi-year fraud.” Additionally, Akazoo admitted that it had only negligible
`
`revenue and subscribers, its historical financial statements were materially false and misleading,
`
`and “former members of Akazoo management and associates participated in a sophisticated
`
`
`
`2
`
`
`
`Case 1:20-cv-08101-AKH Document 1 Filed 09/30/20 Page 3 of 14
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`scheme to falsify Akazoo’s books and records[.]” As a result of the conduct by Akazoo’s former
`
`management team, and as described in its public filings, Akazoo defrauded its investors and
`
`violated the federal securities laws.
`
`5.
`
`On May 1, 2020, the Nasdaq halted trading in Akazoo’s stock, whose price had
`
`fallen from a high of $7.49 in the weeks following its formation in September 2019 to $1.16
`
`when trading stopped. On June 2, 2020, the Nasdaq delisted Akazoo’s stock. As of the date of
`
`this filing, Akazoo has depleted more than $23 million of investor funds and currently holds
`
`approximately $31.5 million.
`
`II.
`NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
`
`The SEC brings this action under Section 20(b) of the Securities Act of 1933
`
`6.
`
`(“Securities Act”) [15 U.S.C. § 77t(b)] and Section 21(d) of the Securities Exchange Act of 1934
`
`(“Exchange Act”) [15 U.S.C. § 78u(d)]. The SEC seeks permanent injunctions against the
`
`Defendant, enjoining it from committing future violations of the securities-law provisions
`
`identified in this Complaint, and disgorgement of all ill-gotten gains obtained as a result of its
`
`fraudulent activity, plus prejudgment interest. The SEC also seeks any other relief the Court
`
`may deem appropriate pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)]
`
`and Sections 20(b) and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b) and 77v(a)].
`
`III.
`JURISDICTION AND VENUE
`
`This Court has subject matter jurisdiction over this action under Section 22(a) of
`
`7.
`
`the Securities Act [15 U.S.C. § 77v(a)] and Sections 21(d), 21(e), and 27 of the Exchange Act
`
`[15 U.S.C. §§ 78u(d), 78u(e), and 78aa]. Defendant has directly or indirectly made use of the
`
`means or instrumentalities of interstate commerce, or of the mails, or the facilities of a national
`
`
`
`3
`
`
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`Case 1:20-cv-08101-AKH Document 1 Filed 09/30/20 Page 4 of 14
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`securities exchange, in connection with the acts, practices, transactions, and courses of business
`
`alleged in this Complaint.
`
`8.
`
`Venue in this District is proper pursuant to Section 27 of the Exchange Act [15
`
`U.S.C. § 78aa]. Certain of the transactions, acts, practices, and courses of business constituting
`
`the violations alleged herein occurred within the Southern District of New York and elsewhere,
`
`and were effected, directly or indirectly, by making use of the means or instruments or
`
`instrumentalities of transportation or communication in interstate commerce, or of the mails, or
`
`the facilities of a national securities exchange. Both Akazoo’s and MMAC’s common stock
`
`were traded on the Nasdaq, which is located in this District. Prior to the business combination,
`
`representatives of Old Akazoo and MMAC met in New York City to conduct due diligence
`
`meetings and plan the PIPE offering.
`
`IV.
`DEFENDANTS
`
`Akazoo S.A. is a company organized under the laws of Luxembourg with its
`
`9.
`
`purported principal place of business in London, United Kingdom and its actual principal place
`
`of business in Athens, Greece. Akazoo’s ordinary shares are registered with the SEC pursuant to
`
`Section 12(b) of the Exchange Act and were traded on the Nasdaq under the ticker “SONG,”
`
`prior to being delisted on June 2, 2020. Before its September 11, 2019 business combination
`
`with MMAC, Akazoo operated as Akazoo Limited (“Old Akazoo”), a company organized under
`
`the laws of the United Kingdom with its primary place of business in Athens, Greece. Old
`
`Akazoo was a purported subscription-based online music streaming company. It was formed in
`
`2010 when it spun off from its Greek-based parent company.
`
`
`
`
`
`
`
`4
`
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`Case 1:20-cv-08101-AKH Document 1 Filed 09/30/20 Page 5 of 14
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`V.
`OTHER RELEVANT ENTITY
`
`10. Modern Media Acquisition Corp. (“MMAC”) was a special purpose
`
`acquisition corporation formed under the laws of Delaware for the purpose of effecting a merger,
`
`share exchange, asset acquisition, or other similar business combination with a focus on media,
`
`entertainment, and marketing service companies. MMAC filed an initial public offering of
`
`common stock with the SEC on Form S-1, effective May 11, 2017, and registered its common
`
`stock under Section 12(b) of the Exchange Act. On May 17, 2017, MMAC conducted an IPO
`
`that raised $207 million, which the company was to hold in trust until it effected a business
`
`combination. MMAC’s common stock was publicly traded on the Nasdaq. Based on the terms
`
`set out in MMAC’s IPO prospectus, and in accordance with its charter, if MMAC did not
`
`complete a deal by February 17, 2019, it had to dissolve, liquidate, or request an extension from
`
`its shareholders. MMAC’s shareholders had a right to redeem their shares for cash if MMAC
`
`did not meet the February 17, 2019 deadline or they could keep their shares and vote for an
`
`extension. Under Exchange Act Rule 12g-3(a), Akazoo is a “successor issuer” to MMAC.
`
`A.
`
`Akazoo’s Formation
`
`VI.
`FACTS
`
`
`11.
`
`Beginning in May 2017, MMAC started searching for a media, entertainment, and
`
`marketing service company with which to combine, eventually identifying Old Akazoo as a
`
`target. Old Akazoo purported to be a thriving business with key metrics comparable to the
`
`streaming service Pandora. Additionally, Old Akazoo claimed that it had: (1) launched a free,
`
`ad-supported streaming radio service in 2017; and (2) acquired and developed a small portfolio
`
`of patented artificial intelligence-based recommendation technology.
`
`
`
`5
`
`
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`Case 1:20-cv-08101-AKH Document 1 Filed 09/30/20 Page 6 of 14
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`12.
`
`Ultimately, MMAC and Old Akazoo combined on September 11, 2019 to form
`
`Akazoo (Nasdaq: SONG).
`
`B.
`
`Akazoo Fraudulently Raised $54.8 Million
`
`i. MMAC Stock Rollover
`
`13.
`
`Because MMAC did not meet its original deadline of February 2019 to
`
`consummate a business combination, many of its shareholders chose to redeem their shares.
`
`After paying out redeemed shares, and by the time MMAC completed the business combination
`
`with Old Akazoo, only $14.2 million remained from the $207 million raised during MMAC’s
`
`May 2017 IPO.
`
`14.
`
`Leading into the business combination with Old Akazoo, MMAC’s shareholders
`
`again had a choice: redeem their MMAC shares for cash or convert their shares into the right to
`
`receive shares in Akazoo. According to MMAC’s Certificate of Incorporation, approval of the
`
`business combination required an affirmative vote of a majority of the outstanding MMAC
`
`shares. Encouraging its shareholders to support conversion, MMAC issued a proxy statement for
`
`its August 28, 2019 shareholder meeting, based on information provided by Old Akazoo. The
`
`proxy statement contained the following claims, all of which Akazoo has since admitted were
`
`false:
`
`
`
`a. Old Akazoo had more than 38.2 million registered users and 4.6 million
`
`paying subscribers as of December 31, 2018;
`
`b. Old Akazoo also generated revenue through a free, ad-supported radio service
`
`with 2.6 million users in its first full year of operation;
`
`c. Old Akazoo operated in 25 different countries and growing;
`
`d. Old Akazoo was a profitable business with positive EBITDA since inception;
`
`e. Old Akazoo had €105 million in revenue in 2018; and
`6
`
`
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`Case 1:20-cv-08101-AKH Document 1 Filed 09/30/20 Page 7 of 14
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`f. Old Akazoo had developed strong relationships with a large number of global,
`
`regional, and local music content providers.
`
`15.
`
`Based on the proxy and investor presentations by the Old Akazoo’s CEO and
`
`CFO (who became the CEO and CFO of Akazoo after the business combination with MMAC)
`
`that included many of the same false claims, MMAC’s remaining shareholders approved the
`
`business combination, and converted their MMAC shares into the right to receive Akazoo shares.
`
`Per the terms of the business combination agreement, Akazoo received the remaining $14.2
`
`million of MMAC investor funds.
`
`ii.
`
`16.
`
`The PIPE Offering
`
`The business combination agreement between MMAC and Old Akazoo required
`
`there be at least $53 million in available cash for Akazoo upon consummation of the transaction.
`
`Because MMAC had only $14.2 million in rolled-over investor funds, MMAC and Old Akazoo
`
`amended their agreement to allow the shortfall to be raised through a PIPE offering of Akazoo
`
`shares.
`
`17.
`
`During the PIPE offering of Akazoo shares, from approximately July 2019 to
`
`September 2019, Old Akazoo’s CEO and CFO participated in investor presentations where they
`
`made the fraudulent claims about Akazoo’s subscribers and revenue listed above.
`
`18.
`
`Induced by these fraudulent statements, investors purchased $40.6 million worth
`
`of Akazoo shares and convertible warrants (the “PIPE Investors”). Combined with the $14.2
`
`million in investor funds from MMAC, Akazoo had $54.8 million to fund its operations.
`
`
`
`
`
`
`
`
`
`7
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`Case 1:20-cv-08101-AKH Document 1 Filed 09/30/20 Page 8 of 14
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`iii.
`
`19.
`
`Public Trading
`
`From September 11, 2019 until May 21, 2020, Akazoo’s stock was traded on the
`
`Nasdaq. During that time, thousands of retail investors purchased shares of the Company’s
`
`stock.
`
`20. While its shares traded publicly on the Nasdaq, Akazoo made several false
`
`statements in public reports signed by its CEO and filed with the SEC, including the following:
`
`•
`
`
`FALSE STATEMENT
`
`• Akazoo “operates in 25 countries.”
`
`• “In the last 5 years, SONG’s
`premium subscribers have grown
`from 1.1 million in 2014 to over
`5.3 million today.”
`
`In the first half of 2019, the
`Company's revenues grew 39%
`year-over-year.
`
`• Financial statements reflecting
`€64.5 million in revenue in the
`first half of 2019 and €15.6
`million in gross profit.
`
`• “Akazoo S.A., SONG, currently
`operates in 25 countries[.]”
`
`• “In the past five years, SONG’s
`premium subscribers have grown
`from 1.1 million in 2014 to over
`5.3 million[.]”
`
`
`Regarding 2019 Third Quarter results:
`
` •
`
` “Revenues increased 24% to €35.0
`compared to €28.1 million in the
`third quarter of 2018.”
`
`• “5.5 Million Premium Subscribers
`end of Q3, Up 28% Year-over-
`Year”
`
`DATE
`
`MEDIUM
`
`September 11, 2019
`
`Form 20-F; Press
`Release
`
`September 27, 2019
`
`Form 6-K
`
`November 25, 2019
`
`
`
`Form 6-K; Press
`Release attached
`
`December 9, 2019
`
`Form 6-K; Press
`Release attached
`
`
`
`
`
`8
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`Case 1:20-cv-08101-AKH Document 1 Filed 09/30/20 Page 9 of 14
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`21.
`
` During the 8-month period that Akazoo disseminated its fraudulent statements to
`
`the market, Akazoo’s stock traded at an average price of $4.96 and as high as $7.49 on
`
`September 26, 2019. By the time Nasdaq halted trading on May 1, 2020, after the fraud was
`
`exposed, the stock price had plunged to $1.16.
`
`22.
`
`As Akazoo would soon admit to the public, none of its repeated claims about its
`
`subscriber base, operations, or revenues were true. Akazoo’s streaming business generated, at
`
`most, negligible revenue from September 2019 through May 2020. The Company operated in
`
`only a few countries, and the Company had only a marginal amount of non-revenue generating
`
`subscribers. Rather, the Company’s only significant source of funds during that time was the
`
`$54.8 million raised from investors. Akazoo’s management knew, or was severely reckless in
`
`not knowing, that the statements referenced in paragraphs 14, 17, and 20 about the Company’s
`
`subscriber base, operations, and revenue were materially false and/or misleading.
`
`23.
`
`Akazoo created the appearance of revenue by claiming that it had relationships
`
`with companies it called “aggregators,” who purportedly collected revenue from Akazoo’s
`
`subscribers and paid expenses on Akazoo’s behalf. In fact, the companies that Akazoo identified
`
`as aggregators either did not exist or did not have a relationship with Akazoo.
`
`C.
`
`Akazoo Publicly Admitted Its Fraud
`
`24.
`
`On April 20, 2020, a short-selling hedge fund publicly released a detailed report
`
`concluding that Akazoo was a complete scam, with negligible subscribers and revenue.
`
`25.
`
`On April 22, 2020, Akazoo announced the formation of a special committee to
`
`investigate the claims raised by the hedge fund and Akazoo’s share price closed at $1.6599—a
`
`drop of more than 34% from the closing price on April 17, 2020, the last business day before the
`
`short-selling hedge fund released its report.
`
`
`
`9
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`Case 1:20-cv-08101-AKH Document 1 Filed 09/30/20 Page 10 of 14
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`26.
`
`On May 1, 2020, Akazoo disclosed in a Form 6-K filing with the SEC that its
`
`Board had terminated Akazoo’s CEO and asked him to resign from the Board based on his
`
`failure to cooperate with the Special Committee’s investigation.
`
`27.
`
`On May 21, 2020, Akazoo filed a Form 6-K with the SEC describing the results
`
`of the Special Committee investigation, which confirmed that Akazoo was, in fact, a complete
`
`sham. In less than a month, the Special Committee determined that:
`
`• “former members of Akazoo’s management team and associates defrauded Akazoo’s
`investors . . . by materially misrepresenting Akazoo’s business, operations, and financial
`results as part of a multi-year fraud”;
`
`• Akazoo had only negligible actual revenue and subscribers for years, and its historical
`financial statements were materially false and misleading; and
`
`• “former members of Akazoo management and associates participated in a sophisticated
`scheme to falsify Akazoo’s books and records.”
`
`Additionally, the Company announced that Nasdaq was suspending trading in its shares and that
`
`Akazoo would not dispute Nasdaq’s decision to delist its securities.
`
`28.
`
`Although Akazoo claimed in the May 21, 2020 Form 6-K that it was “tak[ing] all
`
`available steps to maximize recovery for defrauded investors,” Akazoo has spent over $6.5
`
`million since the release of the short-selling hedge report. Of the $54.8 million in investor funds
`
`originally held by Akazoo (as discussed above in Paragraph 18), only $31.5 million currently
`
`remains.
`
`FIRST CLAIM FOR RELIEF
`
`Violations of Section 17(a) of the Securities Act
`[15 U.S.C. § 77q(a)]
`
`Paragraphs 1 through 28 are re-alleged and incorporated by reference.
`
`29.
`
`
`
`10
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`Case 1:20-cv-08101-AKH Document 1 Filed 09/30/20 Page 11 of 14
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`30.
`
`By engaging in the conduct described herein, Defendant Akazoo, directly or
`
`indirectly, singly or in concert with others, in the offer or sale of securities, by use of the means
`
`or instrumentalities of interstate commerce or of the mails:
`
`a. knowingly or with severe recklessness employed a device, scheme, or artifice
`
`to defraud; and/or
`
`b. knowingly, recklessly, or negligently obtained money or property by means of
`
`an untrue statement of a material fact or an omission to state a material fact
`
`necessary in order to make the statements made, in light of the circumstances
`
`under which they were made, not misleading; and/or
`
`c. knowingly, recklessly, or negligently engaged in a transaction, practice, or
`
`course of business which operated or would operate as a fraud or deceit upon
`
`the purchaser.
`
`31.
`
`By engaging in this conduct, Defendant Akazoo violated, and unless enjoined will
`
`continue to violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].
`
`SECOND CLAIM FOR RELIEF
`
`Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)]
`and Rule 10b-5 Thereunder [17 C.F.R. § 240.10b-5]
`
`Paragraphs 1 through 28 are re-alleged and incorporated by reference.
`
`By engaging in the conduct described herein, Defendant Akazoo, directly or
`
`32.
`
`33.
`
`indirectly, singly or in concert with others, by the use of the means or instrumentalities of
`
`interstate commerce, or of the mails, or of the facilities of a national securities exchange, in
`
`connection with the purchase or sale of securities, knowingly or recklessly:
`
`a. employed devices, schemes, and artifices to defraud; and/or
`
`
`
`11
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`Case 1:20-cv-08101-AKH Document 1 Filed 09/30/20 Page 12 of 14
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`b. made untrue statements of material facts or omitted to state material facts
`
`necessary in order to make the statements made, in the light of the
`
`circumstances under which they were made, not misleading; and
`
`c. engaged in acts, practices, or courses of business which operated or would
`
`operate as a fraud or deceit upon purchasers of securities and upon other
`
`persons
`
`34.
`
`By engaging in this conduct, Defendant Akazoo violated, and unless enjoined will
`
`continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Exchange Act
`
`Rule 10b-5 [17 C.F.R. § 240.10b-5].
`
`THIRD CLAIM FOR RELIEF
`
`Violations of Section 13(a) of the Exchange Act
`[15 U.S.C. § 78(m)] and Rules 12b-20, 13a-16, and 13a-19 thereunder
`[17 C.F.R. §§ 240.12b-20, 240.13a-16, and 240.13a-19]
`
`Paragraphs 1 through 28 are re-alleged and incorporated by reference.
`
`Defendant Akazoo, in public filings with the SEC from September 2019 through
`
`35.
`
`36.
`
`May 2020, misrepresented, failed to disclose, and/or made misleading omissions about the
`
`Company’s operations, including its subscribers and revenue.
`
`37.
`
`By engaging in this conduct, Defendant Akazoo failed to file Forms 6-K and 20-F
`
`that were true and correct, and failed to include material information in its required statements
`
`and reports as was necessary to make the statements made, in light of the circumstances under
`
`which they were made, not misleading.
`
`38.
`
`By engaging in this conduct, Defendant Akazoo violated, and unless enjoined,
`
`will continue to violate, Section 13(a) of the Exchange Act and Rules 12b-20, 13a-16, and 13a-
`
`19 thereunder [17 C.F.R. §§ 240.12b-20, 240.13a-16, and 240.13a-19].
`
`
`
`12
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`Case 1:20-cv-08101-AKH Document 1 Filed 09/30/20 Page 13 of 14
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`FOURTH CLAIM FOR RELIEF
`
`Violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act
`[15 U.S.C. §§ 78m(b)(2)(A) and 78m(b)(2)(B)]
`
`Paragraphs 1 through 28 are re-alleged and incorporated by reference.
`
`By engaging in conduct described herein, from September 2019 through May
`
`39.
`
`40.
`
`2020, Defendant Akazoo, whose securities are registered pursuant to Section 12 of the Exchange
`
`Act [15 U.S.C. § 78l]:
`
`•
`
`•
`
`failed to make and keep books, records, and accounts, which, in reasonable detail,
`accurately and fairly reflected the transactions and dispositions of its assets; and
`
`failed to devise and maintain a system of internal controls sufficient to provide
`reasonable assurances that: (i) transactions were recorded as necessary to permit
`preparation of financial statements in conformity with GAAP or any other criteria
`applicable to such statements, and (ii) to maintain accountability of assets.
`
`41.
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`By engaging in this misconduct, Defendant Akazoo violated, and unless enjoined,
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`will continue to violate, Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C. §§
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`78m(b)(2)(A) and 78m(b)(2)(B)].
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`PRAYER FOR RELIEF
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`I.
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`Permanently restraining and enjoining Defendant from violating Section 17(a) of the
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`Securities Act [15 U.S.C. §§ 77q(a)]; and Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) of
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`the Exchange Act [15 U.S.C. §§ 78j(b); 78(m)(a); 78m(b)(2)(A) and 78m(b)(2)(B)] and Rules
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`10b-5, 12b-20, 13a-16, and 13a-19 thereunder [17 C.F.R. §§ 240.10b-5; 240.12b-20; 240.13a-16;
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`and 240.13a-19].
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`II.
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`
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`Ordering Defendant to disgorge all ill-gotten gains derived from the conduct alleged in
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`this Complaint, together with prejudgment interest thereon;
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`
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`13
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`
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`Case 1:20-cv-08101-AKH Document 1 Filed 09/30/20 Page 14 of 14
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`
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`Granting such other and further relief as this Court may deem just and proper.
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`III.
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`Dated: September 30, 2020
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`Respectfully submitted,
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`
`
`s/Matthew J. Gulde______________________
`MATTHEW J. GULDE*
`guldem@sec.gov
`SECURITIES AND EXCHANGE COMMISSION
`801 Cherry Street, Suite 1900
`Fort Worth, Texas 76102
`(817) 978-1410 (mjg)
`
`Counsel for Plaintiff
`Securities and Exchange Commission
`
`*Not admitted in SDNY, pro hac vice application filed herewith.
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`14
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`
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