Moreover, the securities regulator claimed that the Diley and Island Capital (doing business as Island Stock Transfer) worked together to enable the sale the stock of at least 12 bogus companies. They issued and transferred “free-trading” securities in bulk.
The defendants violated provisions of the federal securities laws including Exchange Act Rule 15c2-11, according to SEC. The provision prohibits registered broker dealers from committing fraudulent conduct.
Spartan Securities, Island Capital failed as market gate keepers
In a statement, Eric I. Bustillo, Director, SEC Miami regional Office, said, “Broker-dealers are critical gatekeepers protecting the integrity of our markets, with obligations under our rules to fulfill that role. We allege, however, that Spartan Securities and three of its principals failed as gatekeepers by enabling multiple illicit supply chains of undisclosed blank check companies.”
Since 2015 to 2018, the securities relator filed numerous enforcement actions against entities engaged in selling blank check companies.
