SEC Successfully Obtains Final Judgment in Microcap Stock Fraud Scheme

Microcap Fraud

The US Securities and Exchange Commission sought and obtained a judgment against Vincenzo Carnovalean in connection with his alleged participation in a fraudulent microcap securities scheme that harmed innocent retail investors.  In its civil complaint, the SEC contends that in the time period spanning from 2016 up to October 2020, Carnovale and another individual, Amar Bahadoorsingh, stealthily secured control of several thinly traded and illiquid microcap stocks, retained stock promoters to generate investor demand for their stocks, and reaped large illegal gains by dumping their shares to unknowing victim investors.

In its suit, the SEC alleges three categories of fraudulent conduct engaged in by Carnovale and Bahadoorsingh: (1) they concealed they controlled the publicly traded securities of the subject publicly traded companies; (2) they deceived  investors, transfer agents and securities brokers into believing that  the stock shares were eligible for public markets trading, when in truth their stock was not lawfully registered with the SEC for sale; and (3) they caused the microcap issuers to file materially misleading and false statements to the investing public in their financial reports and other statements.

Carnovale consented to the Federal Court’s entry of the final judgment that provided a permanent injunction against future violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder, and the securities registration provisions of Section 5 of the Securities Act. The Court also entered a penny stock bar, as well as a conduct-based injunction that prevents Carnovale from being involved in the issuance, purchase, offer, or sale of any security with the exception of a security on a national securities exchange traded for his own account.  The Final Order also ordered him to disgorge his ill-gotten gains of over $360,000, and to pay approximately $80,00 in prejudgment interest and a one-time civil monetary penalty of $223,229.

David Chase, Esq. is a SEC investigation defense lawyer who represents those being investigated by the SEC for insider trading, manipulative securities trading, Ponzi schemes and offering frauds nationwide, including in Chicago, New York, Washington, DC, Miami and Los Angeles.  A former SEC Prosecutor, David is now a SEC investigation lawyer and has over thirty years of experience and seasoned judgment protecting his clients who are under SEC Subpoena or threatened with SEC prosecution.  You may contact David toll-free at: 800-760-0912 or e-mail at:, and can visit the Firm’s website for more information and content at:

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