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This case was last updated from PACER on 06/13/2021 at 07:19:44 (UTC).

Securities and Exchange Commission v. Sterritt et al

Case Summary

On April 14, 2021, the Securities and Exchange Commission (the “Commission”) represented by John O'Donnell Enright and Richard R. Best, attorneys for the U.S. Securities and Exchange Commission filed a civil enforcement action against Richard Dale Sterritt, Jr. (a/k/a Richard Richman) (“Sterritt”), Michael G. Greer (“Greer”), Deanna L. Looney (“Looney”), Robert W. Magness, Jr. (“Magness”), Katie Mathews (“Mathews”), James Christopher (a/k/a Chris) Pittman (“Pittman”), Mark Ross (“Ross,” and, collectively, “Defendants”), and others, seeking injunctive relief, disgorgement of all ill-gotten gains among other reliefs for allegedly offering fraud in the securities and market manipulation scheme. This case was filed in the U.S. District Court for the Eastern District of New York with Judges Peggy Kuo and Kiyo A. Matsumoto presiding.

 

In its complaint, the Commission has alleged that “From March 2018 through at least  November 2020, Sterritt and his co-defendants raised more than $16 million from more than 300 investors through a purported private placement of Zona (and later, ERFB) common stock in nationwide offerings, making various material false statements and omitting to disclose material facts to investors. Instead of using the offering proceeds for the corporate purposes disclosed to investors, Sterritt and certain of the other Defendants, including Greer and Looney, misappropriated most of these proceeds through a number of Sterritt-controlled companies. Defendants then used the misappropriated funds for personal expenses, including to purchase a Bentley, to pay for travel, and to pay for purchases at restaurants, retailers, and gas stations.”

 

The Commission has further alleged that “Sterritt planned to again conduct matched trading with the UC, now in ERFB, to attempt to pump and dump ERFB stock, but his plans were thwarted when the Commission suspended trading in ERFB’s securities on February 4, 2020, for a period of ten business days. As a result of their offering fraud and related market manipulation schemes, Defendants obtained more than $16 million in total illicit proceeds. At least $2.8 million of these ill-gotten gains were transferred to the Relief Defendants.”

 

There are eight claims for relief laid down by the Commission. The first claim is for alleged violations of sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and e(c)]. The second claim is for the alleged violations of Section 10(b) of the Exchange Act and Rule 10b-5(b) by Sterritt. The third claim is for the alleged violation of Securities Act Section 17(a)(2) by Sterritt. The fourth claim is for alleged violations of Sections Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) by all the Defendants. The fifth claim is for the alleged violations of Sections 17(a)(1) and 17(a)(3) of the Securities Act by all Defendants. The sixth claim is for alleged violations of Section 9(a) of the Exchange Act by Sterritt, Magness and Ross. The seventh claim is for alleged violations of Section 15(a) of the Exchange Act by Sterritt, Greer, Pittman & Ross. The eighth claim is for alleged unjust enrichment investor funds received and/or ill-gotten gains for which they gave no bona fide consideration and to which they have no legitimate claim.

 

In its prayer for relief, the Commission has requested the court to permanently restrain and enjoin the Defendants & associated persons from violating the laws alleged in the complaint. Plaintiff further requested the Court to order a penny-stock bar against all Defendants, order disgorgement of ill-gotten gains derived, and order Defendants to pay civil penalties.

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    1:21-CV-02008

  • Filing Date:

    04/14/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

  • Court:

    U.S. District Courts

  • Courthouse:

    New York Eastern District

Judge Details

Referral Judge

Peggy Kuo

Presiding Judge

Kiyo A. Matsumoto

 

Party Details

Plaintiff

Securities and Exchange Commission

Defendants

Robyn Straza

Michael Greer

Mark Ross

Robert Magness

Katie Mathews

James Christopher Pittman

Angeliki Touhouliotis

Rainmaker Advisors LLC

Naomi Ross

Richard Dale Sterritt, Jr.

Deanna L Looney

Intervenor

United States of America

Attorney/Law Firm Details

Plaintiff Attorneys

Richard R. Best

Attorney at U.A. Securities and Exchange Commission

200 Vesey Street, Ste 400

New York, NY 10281

John O'Donnell Enright

Attorney at U.S. Securities and Exchange Commission

200 Vesey Street, Suite 400

New York, NY 10281-1022

Christine Dessa Ely

Attorney at Securities and Exchange Commission

200 Vesey St., Suite 400

New York, NY 10281

David H. Tutor

Attorney at U.S. Securities and Exchange Commission

200 Vesey Street, Suite 400

New York, NY 10281

Intervenor Attorney

David C Pitluck

Attorney at U.S. Attorney's Office/EDNY

271 Cadman Plaza East

Brooklyn, NY 11201

 

Court Documents

#22

(#22) AFFIDAVIT of Service of Court's decision granting the United States of America's motion to stay and intervene, filed by United States of America. (Pitluck, David) (Entered: 06/04/2021)

#21

(#21) WAIVER OF SERVICE Returned Executed by Securities and Exchange Commission. Deanna L Looney waiver sent on 4/27/2021, answer due 6/28/2021. (Ely, Christine) (Entered: 06/02/2021)

#20

(#20) WAIVER OF SERVICE Returned Executed by Securities and Exchange Commission. Katie Mathews waiver sent on 5/4/2021, answer due 7/5/2021. (Ely, Christine) (Entered: 06/01/2021)

#19

(#19) WAIVER OF SERVICE Returned Executed by Securities and Exchange Commission. Michael Greer waiver sent on 4/22/2021, answer due 6/21/2021. (Ely, Christine) (Entered: 05/28/2021)

#18

(#18) ORDER granting #14 Motion to Intervene; granting #14 Motion to Stay. For the reasons set forth in the attached Memorandum & Order, the government's #14 motion to intervene and for a stay is GRANTED. This action is stayed pending resolution of United States v. Richard Dale Sterritt, Jr., et al., 21-cr-193 (KAM). Within two weeks of the conclusion of that criminal proceeding, the parties shall jointly provide a status update regarding the instant civil action to this court. The government is respectfully directed to serve this Order on all parties and note service on the docket. Ordered by Judge Kiyo A. Matsumoto on 5/28/2021. (Tran, Alexander) (Entered: 05/28/2021)

#17

(#17) CERTIFICATE OF SERVICE by United States of America re #14 MOTION to Intervene MOTION to Stay (Pitluck, David) (Entered: 05/27/2021)

14 #2

Proposed Order

14 #1

Memorandum in Support

#14

(#14) MOTION to Intervene , MOTION to Stay by United States of America. (Attachments: #1 Memorandum in Support, #2 Proposed Order) (Pitluck, David) (Entered: 05/19/2021)

#8

(#8) WAIVER OF SERVICE Returned Executed by Securities and Exchange Commission. Rainmaker Advisors LLC waiver sent on 4/22/2021, answer due 6/21/2021. (Enright, John) (Entered: 04/28/2021)

#7

(#7) Proposed Summons. Re #1 Complaint, by Securities and Exchange Commission (Enright, John) (Entered: 04/28/2021)

#6

(#6) NOTICE of Appearance by David H. Tutor on behalf of Securities and Exchange Commission (aty to be noticed) (Tutor, David) (Entered: 04/15/2021)

#5

(#5) SCHEDULING ORDER: A Telephone Initial Conference will be held in this case on August 3, 2021 at 10:00 a.m. before Peggy Kuo, United States Magistrate Judge. All counsel are required to attend. The parties are directed to call toll free (877) 336-1274 and input the Access Code 1453850 at the time of the Conference. No additional security code is needed. Once all parties are on the line, the call will be connected. (The parties are reminded that, pursuant to Local Civil Rule 1.8, they may not independently record any court proceedings. A transcript of the proceedings may be ordered from the Clerk's Office.)Counsel are directed to the annexed Initial Conference Order for instructions. By July 28, 2021, the parties must file a joint and completed copy of the Proposed Discovery Plan, a PDF version of which may be found at: # https://img.nyed.uscourts.gov/files/forms/PK-discovplan.pdf Any request for adjournment of this or any other conference must be made in writing on notice to opposing parties, and must disclose whether or not all parties consent. No request for adjournment will be considered unless made at least two (2) business days before the scheduled conference, except in the event of an emergency. Counsel with knowledge and authority must be present. Per diem counsel may not appear without prior permission of the Court. Plaintiff's counsel is directed to ensure that Defendants are aware of this conference. Ordered by Magistrate Judge Peggy Kuo on 4/15/2021. (O'Neil-Berven, Ryan) (Entered: 04/15/2021)

#4

(#4) NOTICE of Appearance by John O'Donnell Enright on behalf of Securities and Exchange Commission (aty to be noticed) (Enright, John) (Entered: 04/14/2021)

#3

(#3) This attorney case opening filing has been checked for quality control. See the attachment for corrections that were made, if any. (Davis, Kimberly) (Entered: 04/14/2021)

#2

(#2) In accordance with Rule 73 of the Federal Rules of Civil Procedure and Local Rule 73.1, the parties are notified that if all parties consent a United States magistrate judge of this court is available to conduct all proceedings in this civil action including a (jury or nonjury) trial and to order the entry of a final judgment. Attached to the Notice is a blank copy of the consent form that should be filled out, signed and filed electronically only if all parties wish to consent. The form may also be accessed at the following link: #http://www.uscourts.gov/uscourts/FormsAndFees/Forms/AO085.pdf. You may withhold your consent without adverse substantive consequences. Do NOT return or file the consent unless all parties have signed the consent. (Davis, Kimberly) (Entered: 04/14/2021)

1 #1

Civil Cover Sheet

#1

(#7) Proposed Summons. Re #1 Complaint, by Securities and Exchange Commission (Enright, John) (Entered: 04/28/2021)

15 More Documents Available
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Docket Entries

  • 06/04/2021
  • View Court Documents
  • Docket(#22) AFFIDAVIT of Service of Court's decision granting the United States of America's motion to stay and intervene, filed by United States of America. (Pitluck, David) (Entered: 06/04/2021)

    Read MoreRead Less
  • 06/02/2021
  • View Court Documents
  • Docket(#21) WAIVER OF SERVICE Returned Executed by Securities and Exchange Commission. Deanna L Looney waiver sent on 4/27/2021, answer due 6/28/2021. (Ely, Christine) (Entered: 06/02/2021)

    Read MoreRead Less
  • 06/01/2021
  • View Court Documents
  • Docket(#20) WAIVER OF SERVICE Returned Executed by Securities and Exchange Commission. Katie Mathews waiver sent on 5/4/2021, answer due 7/5/2021. (Ely, Christine) (Entered: 06/01/2021)

    Read MoreRead Less
  • 05/28/2021
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  • Docket(#19) WAIVER OF SERVICE Returned Executed by Securities and Exchange Commission. Michael Greer waiver sent on 4/22/2021, answer due 6/21/2021. (Ely, Christine) (Entered: 05/28/2021)

    Read MoreRead Less
  • 05/28/2021
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  • Docket(#18) ORDER granting #14 Motion to Intervene; granting #14 Motion to Stay. For the reasons set forth in the attached Memorandum & Order, the government's #14 motion to intervene and for a stay is GRANTED. This action is stayed pending resolution of United States v. Richard Dale Sterritt, Jr., et al., 21-cr-193 (KAM). Within two weeks of the conclusion of that criminal proceeding, the parties shall jointly provide a status update regarding the instant civil action to this court. The government is respectfully directed to serve this Order on all parties and note service on the docket. Ordered by Judge Kiyo A. Matsumoto on 5/28/2021. (Tran, Alexander) (Entered: 05/28/2021)

    Read MoreRead Less
  • 05/27/2021
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  • Docket(#17) CERTIFICATE OF SERVICE by United States of America re #14 MOTION to Intervene MOTION to Stay (Pitluck, David) (Entered: 05/27/2021)

    Read MoreRead Less
  • 05/27/2021
  • View Court Documents
  • Docket(#16) WAIVER OF SERVICE Returned Executed by Securities and Exchange Commission. Robert Magness waiver sent on 4/22/2021, answer due 6/21/2021. (Ely, Christine) (Entered: 05/27/2021)

    Read MoreRead Less
  • 05/27/2021
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  • Docket(#15) WAIVER OF SERVICE Returned Executed by Securities and Exchange Commission. James Christopher Pittman waiver sent on 4/22/2021, answer due 6/21/2021. (Ely, Christine) (Entered: 05/27/2021)

    Read MoreRead Less
  • 05/26/2021
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  • DocketORDER re #14 MOTION to Intervene MOTION to Stay filed by United States of America. The government (United States of America) represented by Mr. Pitluck is respectfully directed to submit an affidavit of service by May 27, 2021, identifying the parties served with the government's #14 motion to intervene and stay the proceedings. Ordered by Judge Kiyo A. Matsumoto on 5/26/2021. (Tran, Alexander) (Entered: 05/26/2021)

    Read MoreRead Less
  • 05/19/2021
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  • Docket(#14) MOTION to Intervene , MOTION to Stay by United States of America. (Attachments: #1 Memorandum in Support, #2 Proposed Order) (Pitluck, David) (Entered: 05/19/2021)

    Read MoreRead Less
4 More Docket Entries
  • 05/10/2021
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  • Docket(#9) Summons Issued as to Richard Dale Sterritt, Jr. (Tavarez, Jennifer) (Entered: 05/10/2021)

    Read MoreRead Less
  • 04/28/2021
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  • Docket(#8) WAIVER OF SERVICE Returned Executed by Securities and Exchange Commission. Rainmaker Advisors LLC waiver sent on 4/22/2021, answer due 6/21/2021. (Enright, John) (Entered: 04/28/2021)

    Read MoreRead Less
  • 04/28/2021
  • View Court Documents
  • Docket(#7) Proposed Summons. Re #1 Complaint, by Securities and Exchange Commission (Enright, John) (Entered: 04/28/2021)

    Read MoreRead Less
  • 04/15/2021
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  • Docket(#6) NOTICE of Appearance by David H. Tutor on behalf of Securities and Exchange Commission (aty to be noticed) (Tutor, David) (Entered: 04/15/2021)

    Read MoreRead Less
  • 04/15/2021
  • View Court Documents
  • Docket(#5) SCHEDULING ORDER: A Telephone Initial Conference will be held in this case on August 3, 2021 at 10:00 a.m. before Peggy Kuo, United States Magistrate Judge. All counsel are required to attend. The parties are directed to call toll free (877) 336-1274 and input the Access Code 1453850 at the time of the Conference. No additional security code is needed. Once all parties are on the line, the call will be connected. (The parties are reminded that, pursuant to Local Civil Rule 1.8, they may not independently record any court proceedings. A transcript of the proceedings may be ordered from the Clerk's Office.)Counsel are directed to the annexed Initial Conference Order for instructions. By July 28, 2021, the parties must file a joint and completed copy of the Proposed Discovery Plan, a PDF version of which may be found at: # https://img.nyed.uscourts.gov/files/forms/PK-discovplan.pdf Any request for adjournment of this or any other conference must be made in writing on notice to opposing parties, and must disclose whether or not all parties consent. No request for adjournment will be considered unless made at least two (2) business days before the scheduled conference, except in the event of an emergency. Counsel with knowledge and authority must be present. Per diem counsel may not appear without prior permission of the Court. Plaintiff's counsel is directed to ensure that Defendants are aware of this conference. Ordered by Magistrate Judge Peggy Kuo on 4/15/2021. (O'Neil-Berven, Ryan) (Entered: 04/15/2021)

    Read MoreRead Less
  • 04/14/2021
  • View Court Documents
  • Docket(#4) NOTICE of Appearance by John O'Donnell Enright on behalf of Securities and Exchange Commission (aty to be noticed) (Enright, John) (Entered: 04/14/2021)

    Read MoreRead Less
  • 04/14/2021
  • View Court Documents
  • Docket(#3) This attorney case opening filing has been checked for quality control. See the attachment for corrections that were made, if any. (Davis, Kimberly) (Entered: 04/14/2021)

    Read MoreRead Less
  • 04/14/2021
  • View Court Documents
  • Docket(#2) In accordance with Rule 73 of the Federal Rules of Civil Procedure and Local Rule 73.1, the parties are notified that if all parties consent a United States magistrate judge of this court is available to conduct all proceedings in this civil action including a (jury or nonjury) trial and to order the entry of a final judgment. Attached to the Notice is a blank copy of the consent form that should be filled out, signed and filed electronically only if all parties wish to consent. The form may also be accessed at the following link: #http://www.uscourts.gov/uscourts/FormsAndFees/Forms/AO085.pdf. You may withhold your consent without adverse substantive consequences. Do NOT return or file the consent unless all parties have signed the consent. (Davis, Kimberly) (Entered: 04/14/2021)

    Read MoreRead Less
  • 04/14/2021
  • DocketCase Assigned to Judge Kiyo A. Matsumoto and Magistrate Judge Peggy Kuo. Please download and review the Individual Practices of the assigned Judges, located on our #website. Attorneys are responsible for providing courtesy copies to judges where their Individual Practices require such. (Davis, Kimberly) (Entered: 04/14/2021)

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  • 04/14/2021
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  • Docket(#1) COMPLAINT against Michael Greer, Deanna L Looney, Robert Magness, Katie Mathews, James Christopher Pittman, Rainmaker Advisors LLC, Mark Ross, Naomi Ross, Richard Dale Sterritt, Jr, Robyn Straza, Angeliki Touhouliotis Was the Disclosure Statement on Civil Cover Sheet completed -No,, filed by Securities and Exchange Commission. (Attachments: #1 Civil Cover Sheet) (Best, Richard) (Entered: 04/14/2021)

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