When was this case initiated? They don't tell us. Could this go back to the three Litigation Releases that were filed with the details being intentionally omitted? I've said previously that I thought the facts clearly indicated that at least one of those filings concerned SpongeTech.
If the SEC is trying to avoid naming Relief Defendants en masse in this case, because they don't want to say that shareholders lost $390 million from this activity, and that they don't want to identify the shareholders, because that would expose the naked short shares, then they should be quite busy with these individual filings in the immediate future. There should be dozens of people named, and there aren't too many days before the new Administration assumes office, complete with a new SEC Chairman and new Attorney General."
On the basis of this Order and Respondent’s Offer, the Commission finds that: 1. Dennis Ira Ringer, 52 years old, is a resident of Brooklyn, New York. Previously, from 1983 to 1985, Ringer was a registered representative associated with several registered broker-dealers. 2. From May 2008 through September 2009, Ringer sold 78 million shares of Spongetech Delivery Systems Inc. (“Spongetech”) stock to the investing public in violation of the registration requirements of Section 5 of the Securities Act and for profits of $2,152,923.20. 2 3. Ringer obtained these Spongetech shares from a Spongetech affiliate, RM Enterprises International, Ltd. a/k/a RM Enterprises International, Inc. (“RM Enterprises”). As noted in Spongetech’s public filings, RM Enterprises was the majority shareholder of Spongetech and was controlled by Spongetech’s CEO and CFO/COO. Ringer negotiated the purchase of the shares with Spongetech’s CFO/COO. 4. Ringer purchased the 78 million shares from RM Enterprises in fifteen transactions, and at discounts from market prices. In many instances, RM Enterprises transferred the shares to Ringer the same day that it received the shares from Spongetech. 5. After Ringer received the shares from RM Enterprises, he quickly sold the shares in U.S. public markets. The discount that Ringer received enabled him to immediately sell the Spongetech shares at a profit. 6. No registration statement was filed as to any of the shares that Ringer sold to the investing public, and no exemption from the registration requirements was applicable to these transactions. 7. For example, on May 12, 2008, Ringer signed a subscription agreement with RM Enterprises to purchase a block of four million Spongetech shares for $80,000, at a price of $.02 per share. The subscription agreement stated that the securities were not covered by a registration statement. The agreement further stated that the securities were being purchased for investment purposes and not with a view to distribution or resale. 8. Ringer purchased the shares at a discount to the then current market price. On May 12, 2008, Ringer paid RM Enterprises $80,000 for the four million shares, or $.02 per share. The market price of Spongetech stock on that day ranged from $0.037 to $0.047 per share. 9. On May 14, 2008, RM Enterprises transferred four million Spongetech shares to Ringer’s brokerage account. The shares were transferred to Ringer’s account without an appropriate restrictive legend. On May 16, 2008, after holding the Spongetech shares for only two days, Ringer began selling the shares in the public market at prevailing market prices. Ringer sold the four million shares at prices ranging from $0.03764 to $0.05300 per share, resulting in profits of $93,867.31. These transactions were not registered with the Commission, and no exemption from the registration requirements applied. 10. Between June 2008 and July 2009, Ringer continued to obtain Spongetech shares from RM Enterprises at significant market discounts. In each of these instances, after receiving the shares from RM Enterprises, Ringer promptly resold them in public markets – sometimes within days of when he received the shares. These transactions were not registered with the Commission, and did not satisfy any exemption from the registration requirements. 11. In total, Ringer sold 78 million shares of Spongetech in unregistered transactions and obtained illegal profits of $2,152,923.20. 12. The Respondent used the mails and other means of interstate commerce in connection with these offers and sales of Spongetech shares. 13. By engaging in the conduct described above, Respondent Ringer violated Sections 5(a) and 5(c) of the Securities Act, which prohibit the direct or indirect sale or offer for sale of securities through the mails or interstate commerce unless a registration statement has been filed or is in effect, or an exemption from registration is applicable.