The SEC announced charges against Dean Shah and Henry Clarke, residents of Spain, Julius Csurgo, a resident of Canada, and Csurgo's company, Antevorta Capital Partners, Ltd., for their roles in a scheme to secretly gain control of a thinly-traded microcap company, hire stock promoters to generate demand for the company's stock, and profit by illegally dumping their shares into the public securities markets. The SEC has obtained emergency relief in court, including an order to freeze the assets of Csurgo and Antevorta.

The SEC's complaint alleges that, between 2013 and 2018, Shah and Clarke concealed their control of microcap company Zenosense, Inc. by deceptive means, including by dispersing the shares they owned among various nominee accounts. Shah and Clarke allegedly partnered with Csurgo to promote Zenosense's stock to increase the proceeds from their illegal sales. According to the complaint, Csurgo also engaged in fraud in connection with selling stock of Zenosense and three other microcap companies, including by parking his shares in others' accounts to conceal his ownership of the stock and using fabricated documents to induce third parties such as transfer agents and brokerage firms to facilitate his stock sales. The defendants allegedly generated proceeds of over $18 million from their unlawful conduct.

The SEC's complaint, filed in federal district court in New York, charges Shah, Clarke, Csurgo, and Antevorta with violating the registration and antifraud provisions of Sections 5(a), 5(c), 17(a)(1), and 17(a)(3) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5(a) and (c) thereunder. The complaint also charges Csurgo and Antevorta with violating the antifraud provisions of Section 17(a)(2) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder. The SEC is seeking permanent injunctions, disgorgement of allegedly ill-gotten gains plus prejudgment interest, and penalties against all defendants. The SEC also seeks penny stock bars and conduct-based injunctions against Shah, Clarke, and Csurgo.

The U.S. Attorney's Office for the Southern District of New York announced parallel criminal charges against Csurgo.

The SEC's investigation was conducted by Trevor Donelan, Alicia Reed, Michael Moran, David D'Addio, and Amy Gwiazda in the SEC's Boston Regional Office with assistance from Owen Granke and Matthew Greiner of the SEC's Office of International Affairs. The litigation will be led by David London and Marty Healey of the Boston Regional Office.

The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York, the Federal Bureau of Investigation, the Financial Industry Regulatory Authority, the Alberta Securities Commission, the Securities Commission of the Bahamas, the CuraĤao Korps Landelijke Politiediensten, the Ontario Securities Commission, the Securities Commission of Serbia, the Royal Canadian Mounted Police, and the Monetary Authority of Singapore.