SEC Charges Canadian Attorney for Selling Billions of Shares of Stock on Behalf of Others in Violation of Broker Registration Requirements

On April 8, 2024, the Securities and Exchange Commission charged Canadian attorney Mark Borden with selling billions of penny stock shares on behalf of others without registering with the Commission as a broker, thereby violating the securities laws. Borden has agreed to settle the case by, among other things, paying over $335,000 in disgorgement of ill-gotten gains, prejudgment interest, and a civil penalty.

According to the SEC’s complaint, between 2017 and April 2021, Borden sold penny stocks on behalf of his customers without registering with the Commission as a broker or being associated with a registered broker. Borden allegedly did so by taking possession of the stock, drafting documents that appeared to transfer ownership of the shares to himself, depositing that stock in accounts he controlled at various brokerage firms, selling those shares to retail investors often in coordination with stock promotion campaigns funded by his customers, and keeping a commission of the stock sale proceeds before disbursing the remainder to his customer. The SEC alleges that Borden and his customers understood that the customer retained beneficial ownership of the stock at all times and would receive the vast majority of the stock sale proceeds. For example, one of Borden’s customers allegedly received over $15 million in stock sale proceeds from Borden in less than three years.

Source: SEC.gov | Mark Borden