Information and Alerts

Government Actions

1:19-cv-24822-CMA Securities and Exchange Commission v. NIT Enterprises, Inc., et alCM. S.D. Fla.

UPDATE.  As of December 11, 2019:

A Default Judgment and Permanent Injunction was entered against NIT Enterprises FL Inc in the US District Court, Southern District of Florida.  The Judgment permanently enjoins NIT Enterprises from violating Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) 15 U.S.C. section 78j(b) and Rule 10b-5, Section 17(a) of the Securities Act of 1933, and Sections 5(a) and 5(c) of the Securities Act 15 U.S.C. section 77e.  In addition, the company has been order to pay a disgorgement and civil penalty to be determined by the Court.

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As of November 27, 2019 SEC Matter / File Number: No. 1:19-cv-24822-CMA

The Securities and Exchange Commission today announced that it has filed an emergency action and obtained an asset freeze against the operators of a South Florida-based investment scheme that defrauded over 100 retail investors, many of whom are seniors. Two of the defendants charged were previously barred by the Commission from acting as brokers and offering penny stocks to investors.

According to the SEC's complaint unsealed today, NIT Enterprises, Inc., NIT's CEO Gary R. Smith, Jason M. Ganton, and James E. Cleary, Jr., raised $4.9 million from investors while making misrepresentations. The defendants allegedly represented that NIT was raising money to fund the company's efforts to develop its radiation protection products for medical and military applications, which would generate significant returns. In contrast, the SEC alleges that Smith misappropriated $1.25 million or 25% of total investor proceeds to pay for personal expenses, while NIT and Smith have paid 25% of proceeds as undisclosed commissions. The SEC's complaint further alleges that the defendants made baseless promises of NIT's future profitability, imminent initial public offering, and expectations to "double or triple" their investment. Defendants Ganton and Cleary, with Smith's knowledge, allegedly concealed their disciplinary histories and prior SEC actions and bars, including through Ganton's use of an alias when soliciting investors.

The SEC's complaint charges all defendants with violating the anti-fraud and registration provisions of the federal securities laws and also charges the individual defendants for, either directly or indirectly, acting as unregistered broker-dealers and violating past Commission orders. The Honorable Judge Cecilia M. Altonaga of the U.S. District Court for the Southern District of Florida granted the SEC's request for a temporary restraining order and temporary asset freeze against the defendants, and issued an order directing the defendants to provide a sworn accounting. In addition, the complaint seeks relief including injunctions, civil penalties, and disgorgement.

For further assistance please contact:

SECURITIES AND EXCHANGE COMMISSION
801 Brickell Avenue, Suite 1800
Miami, Florida 33131
Telephone: (305) 982-6300
Facsimile: (305) 536-4154
https://www.sec.gov/regional-office/miami

LINK: https://www.sec.gov/litigation/litreleases/2019/lr24679.htm