SEC Settles for $3.1 Million with Ex-Director Marc E. Wexler in Fraud Case

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In a significant legal resolution, the U.S. Securities and Exchange Commission (SEC) has requested a New York federal judge to ratify a $3.1 million settlement with Marc E. Wexler, a former managing director implicated in a pump-and-dump scheme. This settlement represents a pivotal moment in the agency’s ongoing efforts to clamp down on securities fraud.

A Multi-Million Dollar Settlement

Wexler, facing serious charges of securities fraud conspiracy, has agreed to pay almost $948,000, alongside disgorging nearly $2.2 million in gains deemed illicit by the SEC. This hefty sum reflects the severity of the allegations against him, which also led to a guilty plea in a related criminal suit. His sentence includes three months in prison and two years of supervised release, underscoring the legal system’s stance against financial misconduct.

The Pump-and-Dump Scheme: A Complex Web of Deceit

At the heart of this case is a complex pump-and-dump scheme executed back in 2014. Wexler, alongside his colleague Abraxas J. Discala and five others, was accused of manipulating stock prices and trading volumes in several penny stock companies. This nefarious scheme reportedly swindled unsuspecting investors out of millions, with both Wexler and Discala operating from OmniView Capital Advisors LLC, a merchant banking and advisory firm.

Legal Proceedings and Co-Defendant Resolutions

While the SEC’s civil case against Wexler and his associates was paused until December 2022, several co-defendants have already settled with the agency. These settlements involve disgorging of alleged unlawful gains with interest, marking a series of capitulations in this sprawling legal battle. Meanwhile, another defendant, Ronald M. Heineman, has yet to reach a settlement with the SEC.

Criminal Convictions and Sentences

In the related criminal case, Discala, convicted in 2018, received a sentence of 11.5 years in prison and was ordered to pay $16.3 million in restitution. Notably, the Second Circuit declined to overturn Discala’s conviction this past June. Additionally, attorney Kyleen Cane, who faced fraud accusations, was exonerated of any wrongdoing at the 2018 trial.

Awaiting Judicial Approval and Further Comments

As the legal community and involved parties await the federal judge’s decision on the proposed settlement, the case remains a focal point in discussions about corporate integrity and financial regulation.