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SEC Charges Unregistered Broker for Unlawful Sale of Securities to Retail Investors

The Securities and Exchange Commission announced charges against Blake Cathey for the unlawful sale of securities of Florida-based Accanito Equity LLC, Accanito Equity II LLC, Accanito Equity III LLC, and Accanito Equity IV LLC to retail investors.

As The DI Wire reported in July 2023, the SEC previously filed an enforcement action against Brent Seaman, the Accanito LLCs, and affiliated entities on July 27, 2023, in connection with the alleged scheme.

Cathey was a childhood friend of Seaman’s son. Supposedly, when Cathey was around 19 years old, Seaman contacted Cathey to discuss the Accanito Equity LLCs and offer him employment.

According to the SEC’s complaint, from approximately June 2019 until September 2022, Cathey sold at least $4.6 million of Accanito LLCs’ securities to 15 retail investors located in five states.

During that period, Cathey received approximately $760,729 in transaction-based sales commissions from Accanito, even though he was not registered as a broker-dealer or permitted to sell securities.

The SEC’s complaint charges Cathey with violating the securities registration provisions of the SEC. Without admitting or denying the allegations in the complaint, Cathey agreed to the entry of a judgment providing injunctive relief with disgorgement and civil penalties to be determined by a court at a later date.

Cathey also agreed to associational and penny stock bars with a right to reapply after five years as part of a settled follow-on administrative proceeding.

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