FLORIDA — The U.S. Securities and Exchange Commission (SEC) reached a settlement with Xtreme Fighting Championships Inc. and its CEO Steve Smith, with both parties agreeing to pay more than $1 million to resolve claims that the mixed martial arts company engaged in a scheme to sell unregistered securities in violation of federal law.

The proposed final judgments were filed Thursday in the U.S. District Court for the Southern District of Florida, where the SEC asked the court to enter the settlement terms, marking the close of a case that began with a lawsuit in December 2023.

The Xtreme Fighting SEC settlement involves allegations that Smith and the company sold millions of dollars' worth of stock between January 2020 and 2022 without registering the transactions or qualifying for an exemption.

Scheme Allegedly Involved Fraud, Pseudonymous Legal Counsel

The SEC said Smith and former in-house counsel Christopher K. Davies, who passed away in 2022, controlled the stock in question and deliberately hid their involvement to circumvent legal limits on insider sales.

Though Davies was disbarred in Illinois in 2015 and had pleaded guilty to conspiracy to commit securities fraud in 2019, he continued to act as counsel for the company using the alias “Jim Barnes,” according to the SEC. Smith allegedly knew about the deception but continued to use the alias even after Davies' death.

The commission further claimed Xtreme Fighting’s accounting firm raised concerns over the arrangement, but Smith persisted with the ruse.

Illegal Profits Topped $5M, SEC Says

The SEC said the scheme generated over $5 million in unlawful proceeds, with Xtreme Fighting receiving at least $436,000 directly.

Under the proposed terms:

• Xtreme Fighting and Smith will jointly and severally disgorge $436,000, plus $97,509 in prejudgment interest.

• The company will also pay a civil penalty of $436,000.

• Smith is individually liable for an additional $236,451 penalty.

The court had paused proceedings in January to allow time for settlement negotiations. A joint status report in March confirmed that both sides had reached a written agreement.

Legal Counsel and Case Information

• Xtreme Fighting and Steve Smith are represented by Richard E. Brodsky of The Brodsky Law Firm.

• The SEC is represented in-house by Michael C. Moran, Kathleen B. Shields, and William J. Durkin.

Neither side immediately responded to requests for comment Friday evening.

The case is Securities and Exchange Commission v. Steve Smith et al., case number 1:24-cv-24802, in the U.S. District Court for the Southern District of Florida.