SEC Charges Company and Controlling Shareholder with Securities Fraud
Litigation Release No. 25102/ May 28, 2021
Securities and Exchange Commission v. Harmel S. Rayat and RenovaCare, Inc., No. 21-cv-4777 (S.D.N.Y. May 28, 2021)
The Securities and Exchange Commission charged RenovaCare, Inc., a development stage company headquartered in New Jersey, and its controlling shareholder, Harmel S. Rayat, with securities fraud for intentionally concealing Rayat and the company's role in promotional activities, including by drafting and issuing a press release that denied their participation in those activities.
The SEC's complaint, filed in federal court in the Southern District of New York, alleges that in July 2017, Rayat arranged, and caused RenovaCare to pay for, a promotional campaign designed to increase the company's stock price. The complaint alleges that Rayat was closely involved in directing the promotion and editing promotional materials, and arranged to funnel payments to the publisher through consultants to conceal RenovaCare's involvement in the campaign. According to the complaint, in January 2018, OTC Markets Group, Inc. requested RenovaCare issue a press release to explain its relationship to the promotion. The complaint alleges that Rayat and RenovaCare then drafted and issued a press release and a Form 8-K that contained material misrepresentations and omissions denying Rayat's and the company's involvement in the promotion.
The SEC's complaint charges Rayat and RenovaCare with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and also charges Rayat with aiding and abetting the company's violations of those provisions. The complaint also charges RenovaCare with violating the reporting provisions of Exchange Act Section 15(d) and Rules 15d-11 and 12b-20 thereunder. The SEC seeks permanent injunctions and civil penalties against Rayat and RenovaCare, and officer-and-director and penny stock bars against Rayat.
The SEC's investigation was conducted by Darren E. Long and Daniel Weinstein, with assistance from Brian Shute and Jessica Regan in Enforcement's Office of Investigative and Market Analytics, and supervised by Brian O. Quinn and Carolyn M. Welshhans. The litigation will be led by Matt Scarlato and supervised by Jan Folena.
SEC Charges Company and Controlling Shareholder with Securities Fraud
Litigation Release No. 25102/ May 28, 2021
Securities and Exchange Commission v. Harmel S. Rayat and RenovaCare, Inc., No. 21-cv-4777 (S.D.N.Y. May 28, 2021)
The Securities and Exchange Commission charged RenovaCare, Inc., a development stage company headquartered in New Jersey, and its controlling shareholder, Harmel S. Rayat, with securities fraud for intentionally concealing Rayat and the company's role in promotional activities, including by drafting and issuing a press release that denied their participation in those activities.
The SEC's complaint, filed in federal court in the Southern District of New York, alleges that in July 2017, Rayat arranged, and caused RenovaCare to pay for, a promotional campaign designed to increase the company's stock price. The complaint alleges that Rayat was closely involved in directing the promotion and editing promotional materials, and arranged to funnel payments to the publisher through consultants to conceal RenovaCare's involvement in the campaign. According to the complaint, in January 2018, OTC Markets Group, Inc. requested RenovaCare issue a press release to explain its relationship to the promotion. The complaint alleges that Rayat and RenovaCare then drafted and issued a press release and a Form 8-K that contained material misrepresentations and omissions denying Rayat's and the company's involvement in the promotion.
The SEC's complaint charges Rayat and RenovaCare with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and also charges Rayat with aiding and abetting the company's violations of those provisions. The complaint also charges RenovaCare with violating the reporting provisions of Exchange Act Section 15(d) and Rules 15d-11 and 12b-20 thereunder. The SEC seeks permanent injunctions and civil penalties against Rayat and RenovaCare, and officer-and-director and penny stock bars against Rayat.
The SEC's investigation was conducted by Darren E. Long and Daniel Weinstein, with assistance from Brian Shute and Jessica Regan in Enforcement's Office of Investigative and Market Analytics, and supervised by Brian O. Quinn and Carolyn M. Welshhans. The litigation will be led by Matt Scarlato and supervised by Jan Folena.
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