Example 2: Digatrade Financial Corp.
41. During the Relevant Period, Bradley J. Moynes4 was the Chief Executive Officer
and Chairman of Digatrade Financial Corp. (OTC: DIGAF) (“Digatrade”), a publicly traded
company based in Vancouver, British Columbia, Canada.
42. Between about September 2014 and April 2016, Moynes engaged in a fraudulent
scheme to sell Digatrade securities into the public markets while concealing his control of those
shares through nominee companies. Moynes’ scheme used the services of Frederick Sharp and
his employees to sell his Digatrade shares illegally.5
Carrillo became involved in Moynes’
scheme in mid-2016. In July and August 2016, Moynes took steps to re-establish his control
over the public float of Digatrade by decreasing the number of Digatrade’s shares and then
causing Digatrade to issue new, and purportedly unrestricted, shares to nominee entities that
Moynes and Carrillo could control.
43. By the end of 2016, Moynes, Carrillo and their associates (the “Digatrade Control
Group”) controlled approximately 97% of Digatrade’s public float and Moynes also controlled a
significant block of Digatrade’s restricted shares. The Digatrade Control Group owned their
shares of the public float through various overseas brokerage accounts they controlled through
their associates. The Digatrade Control Group then began to promote and sell the Digatrade
4
The Commission charged and obtained judgments against Moynes and Digatrade in a separate case
alleging that they engaged in a deceptive scheme to hide their sales of Digatrade stock to unsuspecting
retail investors. Without admitting or denying the allegations of the Commission's complaint, Moynes
and Digatrade consented to the entry of final judgments enjoining them from violating the securities laws.
The final judgments also imposed penny stock bars against Moynes and Digatrade and imposed an officer
and director bar, disgorgement, and a civil penalty against Moynes. See SEC v. Moynes, et al., No. 1:22-
cv-11006 (D. Mass. judgments entered Mar. 8, 2023).
5 Sharp and his associates are defendants in a Commission action alleging that they facilitated unlawful
stock sales to retail investors for many different Control Persons. See SEC v. Sharp et al., No. 1:21-cv11276 (D. Mass. Filed Aug. 5, 2021).
Case 1:23-cv-11598 Document 1 Filed 07/17/23 Page 12 of 25
13
shares they controlled.
44. Carrillo hired the Medellin Room to solicit investors in a promotional campaign
that started on November 1, 2016. In the two months prior to the promotion, trading in
Digatrade was sparse. However, in the first two days of the Digatrade promotion, the price and
volume of Digatrade soared.
45. In particular, over two days, November 1 and 2, 2016, brokerage accounts
controlled by the Digatrade Control Group sold approximately 4.5 million shares of Digatrade
(over 50% of the company’s public float), generating approximately $2.3 million in trading
proceeds. Despite that heavy selling, Digatrade’s stock price rose from a closing price of $0.13
per share on October 31, 2016 to a closing price of $0.59 per share on November 1, and peaked
at $0.96 per share on November 14, 2016, as reflected in the chart below.
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
$-
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
3-Oct-16 3-Nov-16 3-Dec-16 3-Jan-17 3-Feb-17 3-Mar-17 3-Apr-17 3-May-17
Digatrade Financial Corp (DIGAF) - Price and Volume
Volume Close
Case 1:23-cv-11598 Document 1 Filed 07/17/23 Page 13 of 25
14
46. Through his firm’s proprietary trading account, Anglim initiated quoting on
Digatrade on the first day of the Digatrade Control Group’s promotion. Trading records show
that Anglim’s firm was leading the bid price increases for Digatrade shares that day. In other
words, Anglim offered to buy Digatrade shares in the market at increasing prices throughout the
day on November 1, 2016.
47. Over 8.2 million shares of Digatrade traded in the market during November 1-2,
2016 compared to less than 32,000 shares for the whole month of October. Over those two days,
the Digatrade Control Group sold approximately 4.5 million shares of Digatrade and Anglim
facilitated their liquidation by buying and selling approximately 3 million shares of Digatrade
using his firm’s market maker trading account.
48. From November 1, 2016 through May 1, 2017, the period in which Anglim was
trading in Digatrade using his firm’s market maker trading account, the Digatrade Control Group
sold approximately 12.3 million shares of Digatrade for approximately $3.4 million in proceeds.
49. Anglim’s firm’s market maker trading account bought and sold approximately
11.2 million shares of Digatrade between November 2016 and May 2017 and the firm’s net
trading profit totaled $123,862, of which $61,931 was paid to Anglim in commissions.
50. Anglim also traded in Digatrade in his personal brokerage account. On or about
December 6, 2016, after the initial promotion, Digatrade’s price dropped to a low of $0.28 a
share. That day, Anglim bought on the dip in price by purchasing 98,000 shares of Digatrade at
an average price of $0.29 per share in his personal brokerage account.
51. On the same day, December 6, 2016, Anglim continued to trade Digatrade for the
Digatrade Control Group by buying 403,714 shares and selling 392,850 shares in his firm’s
proprietary trading account. By the end of that day, the price had increased and Anglim switched
Case 1:23-cv-11598 Document 1 Filed 07/17/23 Page 14 of 25
15
to selling Digatrade shares in his personal brokerage account. That day, he sold 22,600
Digatrade shares at an average price of $0.37 per share, resulting in a single day gain of 29% per
share.
52. The total trading volume for Digatrade on December 6 amounted to 1,364,894
total shares, of which Anglim’s market making and personal trading accounted for 917,164
shares, or approximately 67% of total volume. Digatrade shares closed at $0.40 on December 6,
2016, up 25% from the prior day’s close.
53. In his personal brokerage account, Anglim sold most of the rest of his shares of
Digatrade over the next week and by the end of December 2016, Anglim had made a total profit
of $14,222 on his initial $28,473 purchase of Digatrade shares. Anglim’s Digatrade
commissions and personal trading profits thus totaled $76,153.
https://www.sec.gov/litigation/complaints/2023/comp25780.pdf
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