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Bill Bahige Chaaban made a killing off of $fitx imo and abandoned the Spinoff $cenbf resulting in 99% losses for all and also claiming on S1 form w CEN Biotech to have a 42 million dollar deficiency and then he resigns he plays more games then Joel Stohlman imo @HopeLefeber
“Ukrainian Heroes”
— FITX-CENBF-EMRG-ELOAF (@fitx_investguy) June 18, 2022
Unique interpretation of war through art.https://t.co/1ODJ4HyNUqhttps://t.co/PxbK8z9qAx #fckptn #ukrainedonation #stopputin #stopwar #saveukraine #ukraine #war #nftdonation #comebackalive #NFTs FUNNY HE HAS FUNDRAISER FOR THIS AND NOT FOR #UKRAINE pic.twitter.com/434qjJd08D
“Ukrainian Heroes”
— FITX-CENBF-EMRG-ELOAF (@fitx_investguy) June 18, 2022
Unique interpretation of war through art.https://t.co/1ODJ4HyNUqhttps://t.co/PxbK8z9qAx #fckptn #ukrainedonation #stopputin #stopwar #saveukraine #ukraine #war #nftdonation #comebackalive #NFTs FUNNY HE HAS FUNDRAISER FOR THIS AND NOT FOR #UKRAINE pic.twitter.com/434qjJd08D
Chaaban and his family made more money off Fitx then Joel Stohlman and his family I believe.
Happy Father's day to all especially all those dying over there in The Ukraine. Sorry this company was making Grandiose promises using your countries name but now has seemed to abandoned you and have resigned and are hiding behind hateful Trolls admonishing your Country.
Don't take offense Ukranian's this isn't the opinion of the majority of the shareholders. Some of these accounts have there own agendas don't judge us by the words of one person. If you look at his post everything this person says rings hollow and he can't even prove any of it is not true. Good day to all Dads!
Here is Cen Biotechs state of the art LED division. Designed in 2012 and published in 2014. State of the art Bill says. Would you buy a state of the art 8-10 year old Computer? Just saying....
Bill enriched his family and bought property and started other businesses before getting Roi on shareholders money. Nothing they said would be accomplished with the Spinoff was accomplished. Bill resigned and Abandoned CEN Biotech this is fact and cannot be rebutted. Brian Payne last position resulted in the company being sued and bankrupted hardly a guy that should be hand picked for this.
Bill is applying the same moves he did with James Robinson after having everyone vouch for him. Mosad,Jerry etc.
I say it again the Chaaban Family made more money off of Fitx and Cenbf than the Stohlman family. Im done speaking with you. You don't listen to the facts of this situation and try to deny everything. I guess if I was someone's friend that I wanted not to see have problems, I then would do what your doing day in and day out.
The fact is Bill did just as much or even more promoting of Fitx then Joel Stohlman and his family made a ton of money off shareholders backs and he strung along everyone with how great the Spinoff was going to be for Cen Biotech even though Shareholders shares got diluted.
Ok you go next I know this is giving you some sort of panic attack that you can't accept that this is what this man and his family have done.
It's cute how pumpers and sheeple act like nobody ever filed a fraudulent disclosure like a financial statement or 8-K with the SEC in support of a pump.
It's cute how pumpers and sheeple act like nobody ever filed a fraudulent disclosure like a financial statement or 8-K with the SEC in support of a pump.
Always talking but never ready still living off the fitx vibe and you tell me Bill didn't make more then Joel Stohlman you're crazy!
Wherever they go stories stories stories.
They put 42 million in the books they say with Cen Biotech you believe that stories man.
Cant trust anything they file look at S1 with Cen Biotech
Zombie Spinoff abandonment shell Here no news facts
Bill Chaaban or Joel Stohlman who benefited more from FITX?
Bill did you create this shell to distance yourself from the Stohlman fitx case and the fact that cenbf was connected to Fitx in the Spinoff why did you resign last month?
Is it because the Stohlman case with Fitx is in court next month Bill??
Zombie stock like Cenbf Bill you trying to put more distance between you and Joel Stohlman I don't get why you did this?
But I love him :)
Ilove your making wild excuses Bill filed a s1 form with the sec you can go check on these instead of posting your wild theories. They said Cen biotech had a company deficit over 40 million is it true or did they lie and why did they resign?
ilovebill 40 million debt? really were they planning a chapter 11 what happened? forget staying tuned if they cooked the books we want an explanation now? Bahige has already went bankrupt in the past. ilovebill did you even read the S1 or are you just on here gaslight trolling.
They cooked the books on Cen biotech allegedly we are pushing for an investigation into the spinoff from fitx don't be so fast to depart the station with E L O A F. Lets crack into that 40 million dollar deficit on the filings for Cen BioTECH
Spinoff has been aborted they are just stalling for Time trying to Gain favor and keep things quiet until the Stohlman case is concluded.. They are sweating bullets they resigned they ran to Canadian exchange and are trying a smokescreen delay play with the minority owners getting involved now.
Maybe the minority shareholders will suggest they write letters again for Bill to the regulators lol.
tik tok wait and see
...or nobody lied
Keep us posted if there is.
Thanks it comes naturally :)
Bahige Bill Chaaban rather run then make it right restructuring = pure comedy!
theres no excitement in the air this symbol is an abomination and only exist so Bill Chaaban can distance himself and destroy any chance Cen biotech shareholders had from getting there money back from the fitx spinoff to cenbf.
As usual there is a bad guy rosy lining in another one of Bills retreats yeah hes really working hard. He couldnt even take care of the situation with mazars if there was some sort of disagreement. They all just resigned and left Cuck boy Brian Payne in charge because he can handle this situation
Thomas Cannery received a $3-million grant in 2014 to build a “new state-of-the-art fruit and vegetable processing facility.” No new plant was constructed, the money instead being used to create and retain jobs, rebrand the company’s Utopia products and open up markets in China and Nigeria, the Ontario Ministry of Agriculture Food and Rural Affairs has told the Star.
In a separate court action, Thomas Cannery is accused mislabelling its products, including labelling products made with American tomatoes as “Product of Canada”
March 14, 2017
Nine tomato growers from Essex and Kent counties have filed a $2.85-million lawsuit against Thomas Canning for "breach of contract."
Each of the nine farmers signed an agreement to sell their crops totalling more than 33,000 tonnes to the Maidstone, Ont. canning company, according to a statement of claim filed on March 6.
"However, Thomas Canning only accepted delivery and paid for a portion of the tomatoes," the statement reads. "It refused or denied delivery and it did not pay for the bulk of the tomatoes."
The suit was filed in Superior Court and names company president Jack Thomas, vice-president of production Bill Thomas, vice-president of engineering Bob Thomas and chief financial officer Brian Payne.
None of the allegations have been proven in court.
A woman who answered the phone at the plant Tuesday afternoon said none of the men were available, but agreed to take a message. None of the men called back.
The court document states some of the farmers were able to recoup part of their losses by selling some crop to other processing plants or by filing crop insurance claims, but all nine farmers lost between $217,000 to $394,000.
Thomas Canning was given a $3-million provincial grant in 2014 to expand the company's facility, but farmers have complained the money was used to buy equipment and increase production instead.
THOMAS CANNING (MAIDSTONE) LIMITED AND 692194 ONTARIO LIMITED
Restructuring Case
DOCUMENTS
RECEIVERSHIP PROCEEDINGS
Thomas Canning (Maidstone) Limited Fined $40,000 for Offences under the Food and Drugs Act
November 10, 2017, Ottawa: On November 6, 2017, in the Ontario Court of Justice in Windsor, ON, Thomas Canning (Maidstone) Limited of Maidstone, Ontario, pled guilty to and was convicted by indictment on one count of contravening Section 5.(1) of the Food and Drugs Act. The company was ordered to pay total fines of $40,000.
Section 5.(1) of the Food and Drugs Act states that no person shall label, package, treat, process, sell or advertise any food in a manner that is false, misleading or deceptive, or is likely to create an erroneous impression regarding its character, value, quantity, composition, merit or safety.
The Canadian Food Inspection Agency's (CFIA) investigation determined that between September 2013 and July 2015 the company falsely labelled some of its regular canned tomato products as "organic" canned tomato products.
Contravening Section 5.(1) results in an offence under Section 31.1 of the Food and Drugs Act. Every person who contravenes any provision of this act or the regulations, as it relates to food, is guilty of an offence and liable:
on summary conviction, to a fine not exceeding $50,000 or to imprisonment for a term not exceeding six months or to both; or
on conviction by indictment, to a fine not exceeding $250,000 or to imprisonment for a term not exceeding three years or to both.
The CFIA is responsible for the administration and enforcement of federal legislation, acts and regulations, including the Food and Drugs Act.
The CFIA is dedicated to safeguarding food, animal, and plant health, which enhances the health and well-being of Canada's people, environment, and economy.
Media enquiries
CFIA Media Relations
613-773-6600
(( BANKRUPTCY ) https://www.richter.ca/wp-content/uploads/Insolvency-Cases/en/T/Thomas-Canning-Limited/Receivership-Proceedings/Reports/Sixth-Report-20180227.pdf
ONTARIO
SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
BETWEEN:
BRIDGING FINANCE INC., as agent for SPROTT BRIDGING INCOME FUND LP
Applicant
- and -
THOMAS CANNING (MAIDSTONE) LIMITED and 692194 ONTARIO LIMITED
Respondents
APPLICATION UNDER subsections 47(1) and 243(1) of the Bankruptcy and Insolvency Act,
R.S.C. 1985, c. B-3, as amended, and under section 101 of the
Courts of Justice Act, R.S.O. 1990, c. C.43, as amended
SIXTH REPORT OF RICHTER ADVISORY GROUP INC.
IN ITS CAPACITY AS RECEIVER OF
THOMAS CANNING (MAIDSTONE) LIMITED and 692194 ONTARIO LIMITED
February 27, 2018
theres no excitement in the air this symbol is an abomination and only exist so Bill Chaaban can distance himself and destroy any chance Cen biotech shareholders had from getting there money back from the fitx spinoff to cenbf.
As usual there is a bad guy rosy lining in another one of Bills retreats yeah hes really working hard. He couldnt even take care of the situation with mazars if there was some sort of disagreement. They all just resigned and left Cuck boy Brian Payne in charge because he can handle this situation
Thomas Cannery received a $3-million grant in 2014 to build a “new state-of-the-art fruit and vegetable processing facility.” No new plant was constructed, the money instead being used to create and retain jobs, rebrand the company’s Utopia products and open up markets in China and Nigeria, the Ontario Ministry of Agriculture Food and Rural Affairs has told the Star.
In a separate court action, Thomas Cannery is accused mislabelling its products, including labelling products made with American tomatoes as “Product of Canada”
March 14, 2017
Nine tomato growers from Essex and Kent counties have filed a $2.85-million lawsuit against Thomas Canning for "breach of contract."
Each of the nine farmers signed an agreement to sell their crops totalling more than 33,000 tonnes to the Maidstone, Ont. canning company, according to a statement of claim filed on March 6.
"However, Thomas Canning only accepted delivery and paid for a portion of the tomatoes," the statement reads. "It refused or denied delivery and it did not pay for the bulk of the tomatoes."
The suit was filed in Superior Court and names company president Jack Thomas, vice-president of production Bill Thomas, vice-president of engineering Bob Thomas and chief financial officer Brian Payne.
None of the allegations have been proven in court.
A woman who answered the phone at the plant Tuesday afternoon said none of the men were available, but agreed to take a message. None of the men called back.
The court document states some of the farmers were able to recoup part of their losses by selling some crop to other processing plants or by filing crop insurance claims, but all nine farmers lost between $217,000 to $394,000.
Thomas Canning was given a $3-million provincial grant in 2014 to expand the company's facility, but farmers have complained the money was used to buy equipment and increase production instead.
THOMAS CANNING (MAIDSTONE) LIMITED AND 692194 ONTARIO LIMITED
Restructuring Case
DOCUMENTS
RECEIVERSHIP PROCEEDINGS
Thomas Canning (Maidstone) Limited Fined $40,000 for Offences under the Food and Drugs Act
November 10, 2017, Ottawa: On November 6, 2017, in the Ontario Court of Justice in Windsor, ON, Thomas Canning (Maidstone) Limited of Maidstone, Ontario, pled guilty to and was convicted by indictment on one count of contravening Section 5.(1) of the Food and Drugs Act. The company was ordered to pay total fines of $40,000.
Section 5.(1) of the Food and Drugs Act states that no person shall label, package, treat, process, sell or advertise any food in a manner that is false, misleading or deceptive, or is likely to create an erroneous impression regarding its character, value, quantity, composition, merit or safety.
The Canadian Food Inspection Agency's (CFIA) investigation determined that between September 2013 and July 2015 the company falsely labelled some of its regular canned tomato products as "organic" canned tomato products.
Contravening Section 5.(1) results in an offence under Section 31.1 of the Food and Drugs Act. Every person who contravenes any provision of this act or the regulations, as it relates to food, is guilty of an offence and liable:
on summary conviction, to a fine not exceeding $50,000 or to imprisonment for a term not exceeding six months or to both; or
on conviction by indictment, to a fine not exceeding $250,000 or to imprisonment for a term not exceeding three years or to both.
The CFIA is responsible for the administration and enforcement of federal legislation, acts and regulations, including the Food and Drugs Act.
The CFIA is dedicated to safeguarding food, animal, and plant health, which enhances the health and well-being of Canada's people, environment, and economy.
Media enquiries
CFIA Media Relations
613-773-6600
(( BANKRUPTCY ) https://www.richter.ca/wp-content/uploads/Insolvency-Cases/en/T/Thomas-Canning-Limited/Receivership-Proceedings/Reports/Sixth-Report-20180227.pdf
ONTARIO
SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
BETWEEN:
BRIDGING FINANCE INC., as agent for SPROTT BRIDGING INCOME FUND LP
Applicant
- and -
THOMAS CANNING (MAIDSTONE) LIMITED and 692194 ONTARIO LIMITED
Respondents
APPLICATION UNDER subsections 47(1) and 243(1) of the Bankruptcy and Insolvency Act,
R.S.C. 1985, c. B-3, as amended, and under section 101 of the
Courts of Justice Act, R.S.O. 1990, c. C.43, as amended
SIXTH REPORT OF RICHTER ADVISORY GROUP INC.
IN ITS CAPACITY AS RECEIVER OF
THOMAS CANNING (MAIDSTONE) LIMITED and 692194 ONTARIO LIMITED
February 27, 2018
its all connected to the Chaabans
So your saying Mazars lied not a chance it could of been Bill?
Bill hired them and gave them the information. He also just ran and resigned and now they said they need new accountants lol
The spinoff from fitx to cenbf was the restructuring nice try
Maybe another Giddy up go fund me is in the works.
Maybe another Giddy up go fund me is in the works.
It is so obvious there is a restructuring happening. Best to focus on the future if interested in making money on investments. There is definitely excitement in the air.
Let's wait and see what the next few weeks/months may bring.
wrong board do discuss Cen
Who's fault will it be next?
Cen Biotech Inc 2022 Current Report 8-K
sec.report
Companies
Documents
Forms
Alerts
Item 4.01 Changes in Registrant's Certifying Accountant. Dismissal of Independent Registered Accounting Firm On May 2, 2022, the Board of Directors (the "Board") of CEN Biotech, Inc., an Ontario, Canada corporation (the "Company") approved the dismissal of Mazars USA LLP ("Mazars"), as its independent registered accounting firm, effective immediately. Mazars was engaged by the Company on January 16, 2018. No audit report of Mazars for the years ended December 31, 2021 or December 31, 2020, contained an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, with the exception of providing an explanatory paragraph stating there was substantial doubt about the Company's ability to continue as a going concern. During the Company's two most recent fiscal years and through May 2, 2022, (i) there were no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between the Company and Mazars on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which, if not resolved to the satisfaction of Mazars, would have caused Mazars to make reference to the subject matter of such disagreement in connection with its reports on the financial statements for such periods and (ii) there were no "reportable events" (as defined in Item 304(a)(1)(v) of Regulation S-K). The Company provided Mazars with a copy of the disclosure contained herein, prior to its filing with the Securities and Exchange Commission (the "Commission") and requested that Mazars furnish the Company with a letter addressed to the Commission stating whether or not it agreed with the statements herein and, if not, stating the respects in which it does
9:11
Cen Biotech Inc 2022 Current Report 8-K
sec.report
Companies
Documents
Forms
Alerts
Item 4.01 Changes in Registrant's Certifying Accountant. Dismissal of Independent Registered Accounting Firm On May 2, 2022, the Board of Directors (the "Board") of CEN Biotech, Inc., an Ontario, Canada corporation (the "Company") approved the dismissal of Mazars USA LLP ("Mazars"), as its independent registered accounting firm, effective immediately. Mazars was engaged by the Company on January 16, 2018. No audit report of Mazars for the years ended December 31, 2021 or December 31, 2020, contained an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, with the exception of providing an explanatory paragraph stating there was substantial doubt about the Company's ability to continue as a going concern. During the Company's two most recent fiscal years and through May 2, 2022, (i) there were no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between the Company and Mazars on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which, if not resolved to the satisfaction of Mazars, would have caused Mazars to make reference to the subject matter of such disagreement in connection with its reports on the financial statements for such periods and (ii) there were no "reportable events" (as defined in Item 304(a)(1)(v) of Regulation S-K). The Company provided Mazars with a copy of the disclosure contained herein, prior to its filing with the Securities and Exchange Commission (the "Commission") and requested that Mazars furnish the Company with a letter addressed to the Commission stating whether or not it agreed with the statements herein and, if not, stating the respects in which it does
C https://thecse.com › download >
PDF
FORM 9 NOTICE OF ISSUANCE OR PROPOSED ISSUANCE OF LISTED ...
6 days ago - $5,924,386.72, which were issued by CEN Canada to Bahige Chaaban,. Lamia Chaaban, Jeffrey Thomas, the Estate of Muriel Hayes, and Joseph.
SET UP ALERT FOR LAMIA CHAABAN ON TALKWALKER SHE IS CASHED UP REAL SMART BUSINESSWOMAN.
Happy Mother's day to Lamia and all the moms out there
https://trademarks.justia.com/869/20/american-sports-86920299.html
Trademark Owner History
Party NameCHAABAN, LAMIA
Party Type31 - 1st New Owner Entered After Registration
Legal Entity Type01 - Individual
AddressPlease log in with your Justia account to see this address.
Party NameWise Bull Investments, LLC
Party Type30 - Original Registrant
Legal Entity Type16 - Limited Liability Company
AddressPlease log in with your Justia account to see this address.
Party NameWise Bull Investments, LLC
Party Type10 - Original Applicant
Legal Entity Type16 - Limited Liability Company
AddressPlease log in with your Justia account to see this address.
Correspondences
Namebahige b chaaban
AddressPlease log in with your Justia account to see this address.
Trademark Events
Event Date Event Description
2016-02-29 NEW APPLICATION ENTERED IN TRAM
2016-03-01 NEW APPLICATION OFFICE SUPPLIED DATA ENTERED IN TRAM
2016-06-09 ASSIGNED TO EXAMINER
2016-06-11 NON-FINAL ACTION WRITTEN
2016-06-11 NON-FINAL ACTION E-MAILED
2016-06-11 NOTIFICATION OF NON-FINAL ACTION E-MAILED
2016-12-12 TEAS RESPONSE TO OFFICE ACTION RECEIVED
2016-12-12 CORRESPONDENCE RECEIVED IN LAW OFFICE
2016-12-13 TEAS/EMAIL CORRESPONDENCE ENTERED
2017-01-17 NON-FINAL ACTION WRITTEN
2017-01-17 NON-FINAL ACTION E-MAILED
2017-01-17 NOTIFICATION OF NON-FINAL ACTION E-MAILED
2017-03-11 TEAS RESPONSE TO OFFICE ACTION RECEIVED
2017-03-11 CORRESPONDENCE RECEIVED IN LAW OFFICE
2017-03-11 TEAS/EMAIL CORRESPONDENCE ENTERED
2017-03-14 TEAS AMENDMENT OF USE RECEIVED
2017-03-15 USE AMENDMENT FILED
2017-03-15 AMENDMENT TO USE PROCESSING COMPLETE
2017-03-31 USE AMENDMENT ACCEPTED
2017-04-01 NOTICE OF ACCEPTANCE OF AMENDMENT TO ALLEGE USE E-MAILED
2017-04-03 NON-FINAL ACTION WRITTEN
2017-04-03 NON-FINAL ACTION E-MAILED
2017-04-03 NOTIFICATION OF NON-FINAL ACTION E-MAILED
2017-10-03 TEAS RESPONSE TO OFFICE ACTION RECEIVED
2017-10-16 ASSIGNED TO LIE
2017-10-23 CORRESPONDENCE RECEIVED IN LAW OFFICE
2017-10-23 TEAS/EMAIL CORRESPONDENCE ENTERED
2017-11-17 FINAL REFUSAL WRITTEN
2017-11-17 FINAL REFUSAL E-MAILED
2017-11-17 NOTIFICATION OF FINAL REFUSAL EMAILED
2017-12-13 EXAMINERS AMENDMENT -WRITTEN
2017-12-13 EXAMINERS AMENDMENT E-MAILED
2017-12-13 NOTIFICATION OF EXAMINERS AMENDMENT E-MAILED
2017-12-13 EXAMINER'S AMENDMENT ENTERED
2017-12-13 APPROVED FOR REGISTRATION SUPPLEMENTAL REGISTER
2017-12-21 LAW OFFICE PUBLICATION REVIEW COMPLETED
2018-01-23 REGISTERED-SUPPLEMENTAL REGISTER
2021-02-19 TEAS CHANGE OF OWNER ADDRESS RECEIVED
2021-02-19 TEAS REVOKE/APP/CHANGE ADDR OF ATTY/DOM REP RECEIVED
2021-02-19 ATTORNEY/DOM.REP.REVOKED AND/OR APPOINTED
2021-02-19 TEAS WITHDRAWAL OF ATTORNEY RECEIVED-FIRM RETAINS
2021-02-19 TEAS CHANGE OF CORRESPONDENCE RECEIVED
2021-02-19 APPLICANT/CORRESPONDENCE CHANGES (NON-RESPONSIVE) ENTERED
2021-02-24 AUTOMATIC UPDATE OF ASSIGNMENT OF OWNERSHIP
https://federalcorporation.ca/corporation/9931341?msclkid=8e5c7635cef911ec9972816a026fc3bd
LNC PROPERTY HOLDINGS INC.
Address: 870 Wyandotte St E, 4th Floor, Windsor, ON N9A 3J9
LNC PROPERTY HOLDINGS INC. (Corporation# 9931341) is a federal corporation entity registered with Corporations Canada. The incorporation date is October 4, 2016.
name, address, officer
Corporation Overview
Corporation ID 9931341
Business Number 749186698
Corporation Name LNC PROPERTY HOLDINGS INC.
Registered Office Address 870 Wyandotte St E
4th Floor
Windsor
ON N9A 3J9
Incorporation Date 2016-10-04
Dissolution Date 2017-10-26
Corporation Status Dissolved / Dissoute
Number of Directors 1-10
Directors
Director Name Director Address
LAMIA CHAABAN 870 WYANDOTTE ST E, 4TH FLOOR, WINDSOR ON N9A 3J9, Canada
Corporation Changes History
Type Effective Date Expiry Date Detail
Status 2017-10-26 current Dissolved / Dissoute
Activity 2017-10-26 current Dissolution - Section: 210(2).
Act 2016-10-04 current Canada Business Corporations Act (CBCA) / Loi canadienne sur les sociétés par actions (LCSA)
Status 2016-10-04 2017-10-26 Active / Actif
Name 2016-10-04 current LNC PROPERTY HOLDINGS INC.
Address 2016-10-04 current 870 WYANDOTTE ST E, 4TH FLOOR, WINDSOR, ON N9A 3J9
Activity 2016-10-04 current Incorporation / Constitution en société - .
Office Location
Street Address 870 WYANDOTTE ST E
4TH FLOOR
City WINDSOR
Province ON
Postal Code N9A 3J9
Corporations in the same location
Corporation Name Office Address Incorporation
Flash Fitness, Inc. 870 Wyandotte St E, Upper, Windsor, ON N9A 3J6 2012-02-18
Lubradawl Ltd. 870 Wyandotte St E, Upper, Windsor, ON N9A 3J9 2014-10-02
Rxnb Inc. 870 Wyandotte St E, Suite 200, Windsor, ON N9A 3J6 2014-04-30
Surplus Supplements Inc. 870 Wyandotte St East, Upper, Windsor, ON N9A 3J6 2006-10-19
Creams 'N Caps Ltd. 870 Wyandotte St East, Windsor, ON N9A 3J9 2014-07-28
F1 Fulfillment, Inc. 870 Wyandotte St East, Upper, C/O Chaaban Law Firm, Windsor, ON N9A 3J6 2011-05-19
Corporations in the same postal code
On January 1, 2021, Congress overrode President Trump’s veto to enact the 2021 National Defense Authorization Act (NDAA) into law. A somewhat surprising inclusion in the NDAA is a provision amending Section 21(d) of the Securities Exchange Act of 1934 (Exchange Act).1 These amendments specifically authorize for the first time the Securities and Exchange Commission (SEC) to seek disgorgement in federal court actions and extend from 5 to 10 years the period in which the SEC may bring disgorgement claims for violations of scienter based provisions of the securities laws.2 The amendments similarly provide a 10-year period for the SEC to bring claims for any equitable remedy.3 The NDAA promises to enhance the SEC’s ability and incentive to aggressively pursue enforcement actions addressing historical misconduct.
Traditionally, federal courts allowed the SEC to obtain disgorgement based on the availability of general equitable relief under Exchange Act Section 21(d)(5), even though the Exchange Act only gave the SEC express authority to seek disgorgement in administrative proceedings. In recent years, however, the US Supreme Court limited the SEC’s disgorgement power. In 2017, the Court held in Kokesh v. SEC that disgorgement in SEC actions is a penalty for statute of limitations purposes and is therefore subject to the 5-year statute of limitations for civil penalties in 28 U.S.C. § 2462.4 The SEC Division of Enforcement noted in its 2019 Annual Report that the Kokesh decision adversely impacted the SEC’s “ability to disgorge and return funds to investors injured by long running frauds.”5 The Division estimated that the Kokesh ruling caused the SEC “to forgo approximately $1.1 billion in disgorgement in filed cases.”6 It also noted that the actual impact was likely far greater because the Division was forced to shift resources to investigations with “the most promise for returning funds to investors,” thus raising the possibility that some investigations that, due to their timing or nature, were less likely to result in disgorgement remedies might not be adequately staffed or even completed at all.7
More recently, in June 2020, the Supreme Court decided Liu v. SEC, upholding the ability of the SEC to obtain disgorgement in federal court enforcement actions as a form of “equitable relief” under Section 21(d)(5).8 However, in Liu, the Court further limited the SEC’s ability to obtain disgorgement.9 The Court held that disgorgement could not exceed an individual wrongdoer’s illicit net profits and that courts must deduct legitimate expenses before ordering disgorgement.10 The Court also warned that disgorgement should not be imposed on a wrongdoer to recover benefits that accrue to his or her affiliates through joint-and-several liability except perhaps when they are partners engaged in concerted wrongdoing.11 The Court further stated that disgorgement should be returned to victims.12
The newly enacted NDAA, however, now formally provides the SEC express statutory authority to seek disgorgement in federal court actions. Specifically, the SEC can collect disgorgement of any unjust enrichment by a person who received the unjust enrichment as a result of a violation of any provision of the securities laws.13 Additionally, the NDAA also expressly addresses the Supreme Court’s decision in Kokesh by extending the statute of limitations for SEC disgorgement claims to 10 years for violations involving conduct that violates any scienter-based provision of the securities laws, including Exchange Act Section 10(b), Section 17(a)(1) of the Securities Act of 1933 and Section 206(1) of the Investment Advisers Act of 1940.14 The NDAA applies a 5-year statute of limitations for other SEC disgorgement claims.15 Finally, the NDAA sets the statute of limitations to 10 years for all equitable remedies sought by the SEC, including injunctions, bars, suspensions and cease and desist orders.
The NDAA secures one of the Commission’s most useful legal remedies and doubles the time period in which it may seek that remedy in cases involving scienter. Indeed, in the 2020 fiscal year, the SEC collected $3.6 billion in disgorgement. It is important to note, however, that even after the NDAA, some uncertainty remains about the scope of the SEC’s ability to obtain disgorgement. The limitations on SEC disgorgement articulated by the Supreme Court in Liu were based, at least in part, on the statutory language of Exchange Act Section 21(d)(5). The degree to which those limitations still apply in light of the NDAA will likely be clarified in subsequent judicial decisions.
After passage of the NDAA, the stakes are now higher for entities and individuals facing SEC action, particularly in cases involving allegations of long-running frauds or other types of historical misconduct. In matters involving alleged misconduct more than 5 years old, the SEC now has a strong incentive to charge violations of scienter based provisions of the securities laws in order to potentially recover disgorgement. This may lead to longer investigations as the SEC searches for evidence of fraud and complicate efforts to reach a settled resolution. Moreover, the NDAA removes uncertainty as to when the SEC may bring claims for equitable relief such as injunctions, bars, suspensions and cease and desist orders by specifying a 10-year statute of limitation applicable to such claims. Thus, the SEC may be more inclined to bring actions seeking such equitable relief even if civil penalties are time-barred and disgorgement is not otherwise available based on the facts of a particular matter. In short, the NDAA may lead the SEC to investigate, charge, litigate and negotiate settlements more aggressively.
***
Additional Mayer Brown Legal Updates on the NDAA:
The US National Defense Authorization Act for Fiscal Year 2021: What Financial Services Companies Need to Know (Disgorgement is discussed on page 7.)
The US National Defense Authorization Act for Fiscal Year 2021: Procurement Policy and Requirements
1 William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (“NDAA”), H.R. 6395, 116th Cong. § 6501(a)(1)(A)(ii) (2021).
2 Id. § 6501(a)(3)(8)(A)(ii)(IV).
3 Id. § 6501(a)(3)(8)(B).
4 137 S. Ct. 1635, 1645 (2017).
5 SEC Division of Enforcement 2019 Annual Report at 21, www.sec.gov/files/enforcement-annual-report-2019.pdf.
6 Id.
7 Id.
8 140 S. Ct. 1936, 1940 (2020).
9 Id.
10 Id. at 1950.
11 Id.
12 Id.
13 NDAA, H.R. 6395, 116th Cong. § 6501(a)(3).
14 Id. § 6501(a)(3)(8)(A)(ii).
15 Id. § 6501(a)(3)(8)(A)(i).
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://www.mayerbrown.com/en/perspectives-events/publications/2021/01/congress-slips-steroids-to-sec-enforcement-to-strengthen-the-secs-authority-to-seek-disgorgement-in-federal-court
Congress Confirms SEC's Disgorgement Power: Recovery for Investors or Revenue for Government?
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Tucked into the 2021 National Defense Authorization Act (NDAA)1 passed over a presidential veto on January 1, 2021,2 on page 1,238 of the 1,480-page bill, was a modification to the Securities Exchange Act of 1934 (Exchange Act)3 that constitutes a response to a couple of recent Supreme Court cases that had limited the U.S. Securities and Exchange Commission’s (SEC) ability to obtain disgorgement from defendants in enforcement actions. Prior to the NDAA, the SEC did not have explicit statutory authority to obtain disgorgement from securities law violators; instead, federal courts have conferred such authority in a patchwork of cases over the past 50 years. In the NDAA, Congress modified a section of the Exchange Act that sets out the remedies available to the SEC in addressing violations of the securities laws4 and granted explicit authority for the SEC to seek disgorgement.5 The new authority comes with an enhanced, ten-year limitation period for disgorgement related to certain fraud violations.6 However, the new statute and authority do not necessarily sweep aside the limitations imposed by the Supreme Court in two recent, seminal cases, Kokesh v. SEC7 and Liu v. SEC.8
Governments, like private businesses, seek to obtain, retain, and expand streams of income. There are, however, at least two operational differences regarding what the payer receives and what motivates the payee. In typical commercial transactions, customers receive a positive; in interactions with the government citizens usually avoid a negative.9 Profit motivates business managers while increased administrative power motivates governmental managers. The multiple government-directed revenue streams include cash inflows from income, excise, wealth, and other taxes, duties, tariffs, transfer payments from other governments, and multifarious fines collected for conduct deemed unlawful. Until very recently, the SEC had exercised its disgorgement power as simply another revenue stream.
In Liu, the Supreme Court held that disgorged funds must be returned to the harmed investors—what we call the “First Liu Rule.” In addition, the Court ruled that the disgorged amount must be net of unlawfully obtained funds and lawful expenses incurred in obtaining and using the funds—what we call the “Second Liu Rule.” In its amendment of the Exchange Act on January 1, Congress failed to address either the First or Second Liu Rule and, thus, the SEC will still be curtailed from returning to its prior “revenue stream” approach to disgorgement.
Origins of the SEC’s Disgorgement Power
Federal courts gave the SEC power to obtain disgorgement from violators by reading it into the Exchanger Act provision that authorized the Agency to investigate and litigate violations of federal securities laws.10 This judicially-created remedy, originally called restitution, became a penalty imposed on violators, often representing funds that investors had lost and violators gained, that was collected for the benefit of the United States Department of the Treasury (“Treasury”).
Although negative injunctions are a type of equitable remedy, Exchange Act Section 21 made no reference to equity generally or disgorgement specifically. It granted the SEC no ability to impose a penalty. Section 21 simply provides that, “[w]henever it shall appear to the Commission that any person is engaged or is about to engage in” violations of the federal securities laws, the SEC may bring an action “to enjoin such acts or practices, and upon a proper showing a permanent or temporary injunction or restraining order shall be granted.”11
In the 1970 case SEC v. Texas Gulf Sulphur Co.,12 the U.S. Court of Appeals for the Second Circuit, having just adopted a new theory of fraud liability for the SEC—insider trading13 — affirmed the district court’s granting of the new remedy of restitution—to the SEC—on the very same matter.14 The district court and Second Circuit extracted the SEC’s purported authority to seek, and the federal district courts’ authority to compel, defendants to return ill-gotten gains from Section 21.15 The SEC later came to employ the term “disgorgement” as the equivalent of “restitution-based awards.”16
The Second Circuit nonetheless ignored Congress’ very specific inclusion of injunctive remedies and exclusion of other equitable remedies, disgorgement, or penalties, and in an act of judicial legislation disguised as statutory interpretation—an ipse dixit—reasoned that because courts had previously granted the remedy of receivership to the SEC, also not mentioned in Section 21, it could find and add another unspecified remedy to the statutory section. In effect, the court completely ignored the statutory language.
Judicial disregard of the specific statutory language in 1970 was not the only problem. A second problem concerns the SEC’s standing: How could the SEC stand in the shoes of the injured investors, collect the unjust gains, and dispense with the proceeds at it deemed fit? The SEC was not an investor. By separating disgorgement from restitution, transforming it into a penalty, and justifying its role, after 1990, as a second “civil” penalty for general deterrence, the SEC avoided the problem of standing.
When the judiciary granted the SEC the power to extract money from insider traders, it was a type of restitution or unjust enrichment that, in the interest of justice and good faith, would require a wrongdoer to return to a wronged party the wrongdoer’s unjust gain.17 It was not a penalty for wrongdoing insofar as it was a government-imposed pecuniary punishment.
The Second Circuit’s holdings regarding the availability of disgorgement in SEC enforcement cases spread as other federal circuits quickly adopted the new theory of securities fraud and its remedy, gradually expanding the disgorgement remedy beyond insider trading cases to other types of securities fraud.18 Until Kokesh and Liu, the SEC had few consistent conditions on imposing and calculating the disgorgement recovery, including its practice of collecting disgorged funds for the benefit of the U.S. Treasury rather than to compensate injured investors. Although SEC disgorgement has now celebrated its fiftieth birthday, over this time span the remedy had lost its theoretical justification and became a de facto judicial penalty—an equitable penalty.19
Kokesh and Liu Begin to Place Some Limits on the SEC’s Rampant Disgorgement Practices
In Kokesh, the Supreme Court acknowledged that the SEC disgorgement remedy was a penalty, noting that penalties are imposed for offenses against the state and are intended to deter future violations “as opposed to compensating a victim for his loss.”20 The Kokesh Court did not accept the SEC’s argument, made to avoid application of a five-year statute of limitations on its use of disgorgement, that SEC disgorgement is not punitive but “remedial” because it “lessens” the consequences of a violation.21 In that regard, the Court observed that, while “[s]ome disgorged funds are paid to victims; other funds are dispersed to the United States Treasury,” and “[e]ven though district courts may distribute the funds to the victims, they have not identified any statutory command that they do so.”22 Accordingly, the Court found that disgorgement was a penalty subject to the five-year statute of limitations, set out in 28 U.S.C. § 2462, and that the statute of limitations starts to run upon completion of the violation.
In Liu, the Supreme Court resolved the Kokesh issue, namely that disgorgement is available as equitable relief as long as the award does not exceed net profits and is refunded to the victims.23 The Liu decision, among other things, provided a formula for calculating the disgorgement total and required the SEC to return that total to investors. With minor exceptions, disgorged amounts could no longer go straight to the Treasury. Although Section 308 of Congress’s Sarbanes-Oxley Act24 created the so-called Fair Fund provision, it only gave the SEC the “authority”—and the discretion—to return funds to the investors who were the financial victims of the defendants ordered to disgorge.25 Following Liu, the return of funds to harmed investors is now mandatory.
The NDAA Amendments Codify SEC Disgorgement and Modify the Limitations Period
As noted above, on January 1, 2021, Congress amended certain provisions of Section 21 (“Amendments”).26 These Amendments statutorily crystallized Liu’s holdings about the SEC’s ability to seek and obtain judicial disgorgement, federal courts’ power to grant disgorgement, and extended the five-year statute of limitations on disgorgement to ten years for fraud claims, that is, claims requiring that the SEC show scienter.
In the Amendments, however, Congress is completely silent about the Liu Rules, and this silence creates ambiguity in the state of law: Is the new, statutory disgorgement authority to be used for the benefit of harmed investors, as the judicial Liu Rules contemplate, or can it or will it return to its role as a revenue stream for the Treasury? By “punting” on this critical question, Congress has left this door open.
Given its history, the SEC will likely soon be asking the judiciary to again stretch the SEC’s authority to obtain disgorgement up to—and perhaps beyond—the limits of the statutory language.
[1] William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, Pub. L. No. 116-283 (2021) (“NDAA”).
[2] Jordain Carney, Congress overrides Trump veto for the first time, The Hill (Jan. 1, 2021), https://thehill.com/homenews/senate/532321-congress-overrides-trump-ndaa-veto.
[3] 15 U.S.C. §§ 78a-78qq (2020).
[4] 15 U.S.C. § 78u(d) (2020).
[5] NDAA, supra note 1, § 6501.
[6] Id. § 6501(a)(3).
[7] 137 S. Ct. 1635 (2017). We discussed Kokesh in an article prior to the Supreme Court argument in Liu, and noted that the case had highlighted two gaps in the SEC’s enforcement authority “that a statutory amendment can easily address: (1) the efficacy of the SEC’s disgorgement power outside of the context of an administrative proceeding; and (2) determining the appropriate statute of limitations period.” Cory Kirchert & Adriaen Morse, Liu v. SEC: To Disgorge or Not to Disgorge, Arnall Golden Gregory: Publications (Jan. 29, 2020), https://www.agg.com/news-insights/publications/liu-v-sec-to-disgorge-or-not-to-disgorge/.
[8] 140 S. Ct. 1936 (2020). In discussing the Supreme Court’s opinion in Liu, we noted that, although the Court had confirmed the availability of the judge-made disgorgement remedy for the SEC, the opinion imposed new limits on the SEC’s recovery to the net profits of the unlawful activity and a requirement that recovered proceeds be returned to investors whose money is disgorged. Adriaen Morse, Cory Kirchert & Georgina Shepard, The SEC Loses an Arrow from Its Quiver in Liu v. SEC, Arnall Golden Gregory: Publications (June 24, 2020), https://www.agg.com/news-insights/publications/the-sec-loses-an-arrow-from-its-quiver-in-liu-v-sec/.
[9] Fiscal capacity is a government’s ability to generate revenue. Its effective use of coercion through, among other things, the threat of fines and penalties, plays a role in collecting revenue deemed collectible by the state. See, e.g., Eva Hofmann et al., Enhancing Tax Compliance through Coercive and Legitimate Power of Tax Authorities by Concurrently Diminishing or Facilitating Trust in Tax Authorities, Wiley Law and Policy (Apr. 29, 2014), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4459214/. The German sociologist Max Weber defined the state as a “human community that (successfully) claims the monopoly of the legitimate use of violence within a given territory.” André Munro, State Monopoly on Violence, Encyclopedia Britannica (Mar. 6, 2013), https://www.britannica.com/topic/state-monopoly-on-violence.
[10] 15 U.S.C. § 78u; Exchange Act § 21 (“Section 21”).
[11] Exchange Act Section 21(d)(1).
[12] SEC v. Texas Gulf Sulphur Co., 446 F.2d 1301, 1307 (2d. Cir. 1970) (“TSG II-CA”) (this was the factual liability and remedy phase of the case in which insider trading was deemed to violate fraud provisions of the Exchange Act).
[13] SEC v. Texas Gulf Sulphur Co., 401 F.2d 833 (2d Cir. 1968) (en banc), cert. denied, Coates v. SEC, 394 U.S. 976 (1969) (“TSG I-CA”).
[14] SEC v. Texas Gulf Sulphur Co., 258 F. Supp. 262 (S.D.N.Y. 1966) (“TSG I-DC”).
[15] Later, the Liu Court stated, “Congress passed the Securities Act of 1933, 48 Stat. 74, as amended, 15 U.S.C. § 77a et seq., and the Securities and Exchange Act of 1934, 48 Stat. 881, as amended, 15 U.S.C. § 78a et seq., and to punish securities fraud through administrative and civil proceedings.” Liu, supra note 8, at 1940 (emphasis added). We suggest that this statement, which cites to the original statutes, is false because Congress originally limited SEC remedies to the equitable and non-punitive relief of injunction—temporary, preliminary, or permanent.
[16] Id. at 1940 n.1.
[17] See, In re McCormick & Co., Inc., 422 F. Supp. 2d 194 (D.D.C. 2019) (Court references private claims for unjust enrichment in various states).
[18] See e.g., John D. Ellsworth, Disgorgement in Securities Fraud Actions Brought by the SEC, 3 Duke L. J. 641 (1977), https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=2628&context=dlj.
[19] Our discussion does not include the statutory disgorgement remedy for short-swing profits for violations of 15 U.S.C. § 78p(b), also known as Section 16(b) of the Securities Exchange Act of 1934, which is a prophylactic insider-trading rule. This statutory-based disgorgement is a true equitable remedy, which a third-party, the SEC, enforces for the benefit of the harmed party—the corporation. It is not an equitable penalty paid to the government.
[20] Kokesh, supra note 7, at 1642.
[21] Id. at 1644.
[22] Id.
[23] Liu, supra note 8, at 1949-50.
[24] Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (July 30, 2002); see, SEC, Press Release, Statement of the Securities and Exchange Commission Concerning Financial Penalties (Jan. 4, 2006), https://www.sec.gov/news/press/2006-4.htm.
[25] SEC, Information for Harmed Investors, https://www.sec.gov/divisions/enforce/claims.htm (stating, in part, that the SEC “in its discretion, may seek to distribute these [disgorged] funds for the benefit of harmed investors. Some of the distributions in these cases are administered by SEC staff, and in other cases, a third-party Fund Administrator/Distribution Agent has been appointed by the Commission or court to administer the distribution.”).
https://www.jdsupra.com/legalnews/congress-confirms-sec-s-disgorgement-6285268/
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