Securities and Exchange Commission v. Keith Houlihan, No. 9:18-cv-80585 (S.D. Fla. filed May 4, 2018)
The Securities and Exchange Commission recently filed an enforcement action against a former microcap company president with defrauding over 700 investors nationwide who were pressured to invest has agreed to lifetime officer-and-director and penny stock bars.
The SEC’s complaint alleges that from 2009 until 2015, Keith Houlihan of Boca Raton, Florida, while president of publicly-traded Sanomedics, Inc., hired and worked with an unregistered broker and his boiler room operation to illegally sell shares of Sanomedics by cold-calling the investing public using high-pressure sales tactics. In 2009 and 2010, Houlihan falsely told investors that for a limited time he was able to offer them Sanomedics shares at a steep discount to the stock’s market price. The complaint alleges further that Houlihan used investor monies to pay undisclosed sales commissions to boiler room sales agents and more than $110,000 to himself for personal expenses. In 2013 and 2014, Houlihan signed Sanomedics’ annual and quarterly filings with the SEC that contained false statements about Sanomedics’ financing and did not disclose the illegal boiler room activity.
In December 2017, the U.S. Attorney’s Office for the Southern District of Florida criminally charged Houlihan. He was subsequently sentenced to 111 months imprisonment and ordered to pay approximately $21 million in restitution.
The SEC’s complaint, filed in federal court in Miami, Florida on May 4, 2018, charges Houlihan with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Exchange Act Rule 13a-14, and with aiding and abetting the boiler room’s violations of Section 15(a) of the Exchange Act and Sanomedics’ violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. In addition to the lifetime bars, Houlihan agreed to settle the SEC’s charges by consenting to a judgment that permanently enjoins him from violating the charged provisions of the federal securities laws. The settlement is subject to court approval.
The SEC charged the boiler room operator, Miguel “Michael” Mesa, and Sanomedics’ former CEO, Craig V. Sizer, with fraud in 2016. A federal court subsequently entered consented-to final judgments against Mesa and Sizer that imposed lifetime penny stock bars on each of them and a lifetime officer-and-director bar on Sizer. The SEC subsequently barred Mesa and Sizer from the securities industry.
With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.
At the Boca Raton Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.