SEC v. Farinella, et al.

Violations Charged

Sections 17(a)(1), (3), Sections 9(a)(1), 9(a)(2), 10(b), Rule 10b-5(a), (c)

Case Overview

Before Pazoo's stock ever traded, James Farinella had installed an associate with no public-company experience as CEO and, through his firm Integrated Capital Partners, taken ownership or control of roughly 98% of the company's unrestricted shares.

In the summer of 2012, Farinella and promoters at Equities Awareness Group coordinated their trading to move the price from 10 cents to 31.5 cents, a 215% rise, then released weeks of internet promotions citing the stock's trading activity, which their own trading had produced. Daily volume more than doubled, the price peaked at 39.9 cents, and Farinella sold more than 8 million shares for nearly $1.1 million before the price fell below 6 cents.

Joe's Role

The SEC's litigation release names Joe among the staff who conducted the investigation.

Outcome

A parallel criminal case was brought by the U.S. Attorney's Office for the District of New Jersey. The SEC obtained judgment against Farinella in August 2020.