SEC Charges Two Individuals for Facilitating Multi-Million Dollar Offering Fraud
On March 27, 2023, the Securities and Exchange Commission charged Wayne McLean and Joan Powell in connection with a fraudulent scheme to sell purported shares of Eastern Metal Securities (EMS). The SEC previously charged Roger Nils-Karlsson in connection with the EMS scheme that victimized thousands of retail investors worldwide.
According to the SEC's complaint, from on or about November 2012 to June 2019, Karlsson, using various aliases, orchestrated a fraudulent scheme in which he offered and sold EMS shares, purportedly backed by a "Pre Funded Reversed Pension Plan" that Karlsson claimed to be the world's first online investment of its kind. Karlsson's scheme was allegedly facilitated by McLean and Powell. McLean allegedly offered and sold EMS securities to investors, including by making solicitations through podcasts that made materially false and misleading statements. As alleged, Powell collected and forwarded investor money to accounts controlled by Karlsson, and McLean and Powell retained a portion of the investment funds for their own personal use despite claiming that they were performing these functions without remuneration.
The complaint, filed in the U.S. District Court for the Eastern District of New York, charges McLean with violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and Powell with violations of Sections 17(a)(1) and 17(a)(3) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5(a) and (c) thereunder. McLean and Powell, without admitting or denying the allegations, consented to bifurcated settlements, agreeing to be permanently enjoined from violations of the charged provisions and to the imposition of an officer-and-director bar, with monetary relief in an amount to be determined by the court at a later date upon motion of the Commission. The settlements are subject to court approval.
The SEC's investigation was conducted by John Lehmann, Jordan Baker, Patricia Schrage, Alistaire Bambach, and Lindsay Moilanen of the New York Regional Office. The litigation is being handled by Mr. Lehmann and Chevon Walker. The matter is being supervised by Thomas P. Smith, Jr.
Read the original litigation release from the U.S. Securities and Exchange Commission here.Click Here to Follow SEC Alerts