SEC Charges Massachusetts-Based Firm and Its Co-Owners with Acting as Unregistered Securities Dealers

The Securities and Exchange Commission (SEC) has today initiated legal action against Auctus Fund Management, LLC (“Auctus Management”), and its co-proprietors, Alfred Sollami of Brookline, Massachusetts, and Louis Posner of Mansfield, Massachusetts. The charges allege that they failed to register as securities dealers with the SEC. The SEC claims that Auctus Management, together with Sollami and Posner, traded billions of newly-issued microcap securities shares through their Auctus Fund, LLC (“Auctus Fund”), making millions of dollars in profit without adhering to federal securities laws that require dealer registration or association with a registered dealer.

According to the SEC’s lawsuit, lodged in the federal district court in Boston, Massachusetts, between 2013 and 2021, Auctus Management, Sollami, and Posner were involved in purchasing convertible notes and related warrants from microcap issuers. These notes were then converted into stock shares at a heavily discounted rate from the market price and sold as newly issued shares in the market, netting a considerable profit. It’s alleged that through the Auctus Fund, they bought notes from more than 150 separate issuers and sold over 60 billion shares of newly minted stock in the market, racking up profits exceeding $100 million. The SEC alleges that Auctus Management, Sollami, and Posner violated federal securities laws by failing to register as securities dealers with the SEC or affiliate themselves with a registered dealer. This failure to register meant they avoided legal obligations that securities dealers must fulfill to safeguard the investing public, including regulatory inspections and oversight, financial responsibility requirements, and record-keeping.

The SEC’s lawsuit accuses Auctus Management, Sollami, and Posner of contravening Sections 15(a)(1) and 20(b) of the Securities Exchange Act of 1934. The SEC is demanding permanent injunctions, disgorgement of ill-gotten profits plus prejudgment interest, civil penalties, penny stock bars, and other equitable relief. The lawsuit also names Auctus Fund as a relief defendant, seeking disgorgement of the ill-gotten profits from Auctus Management, Sollami, and Posner’s transgressions.

The SEC’s case is being overseen by Michael Franck, David Scheffler, Rua Kelly, Michael Moran, Mark Albers, and Amy Gwiazda of the Boston Regional Office.