No, it was not entirely beyond the companies' control. From the complaint:
Defendants purchased from debtholders the aged debts of various microcap issuers of securities. Contemporaneously, and as part of their purchase of the aged debt, Defendants obtained agreements with the issuers permitting Defendants to, at their discretion, convert the debt into shares of the issuers’ common stock. Defendants deposited these shares (once converted from the debt) into their brokerage accounts and sold significant numbers of them into the market. Finally, Defendants deposited the net proceeds from the stock sales into their bank accounts.
That sounds to me as if 3(a)(10) suits came into play in at least some of the cases. They're usually filed in local courts, so if you don't know where to look, and if the issuer doesn't make disclosure, the suits could be hard to find.
The SEC's complaint isn't as informative as it could have been. I wonder if that's because there's more to come.
That said, shareholders, at least, will benefit. Maybe. The SEC wants an order requiring MEG to surrender any remaining converted shares for cancellation, and also to surrender any remaining conversion rights. It remains to be seen how much is left; typically, these people convert and sell as quickly as they can.
