SEC Files Settled Fraud Charges Against Los Angeles-Based “Smart Ring” Company and Its Principal

The Securities and Exchange Commission (SEC) announced today that Esos Rings, Inc., and its principal, Michelle Silverstein aka Michelle Silverstein Bisnoff, have reached a settlement regarding charges of defrauding investors by selling Esos stock based on false and misleading statements about Esos’s business, as well as operating a Ponzi-like scheme.

According to the SEC’s complaint, filed in the U.S. District Court for the Central District of California, between February 2017 and June 2022, Esos and Bisnoff fraudulently raised $1.95 million from investors. The complaint alleges that Esos claimed to be engaged in the business of manufacturing and selling smart rings, wearable devices functioning as debit cards. As detailed in the complaint, Esos and Bisnoff solicited investments through deceptive statements, including false claims that Esos held patents for the smart rings and that Apple was acquiring Esos. Additionally, the complaint asserts that Esos and Bisnoff operated a scheme resembling a Ponzi scheme, using funds from new investors to repay previous ones.

Esos and Bisnoff, while neither admitting nor denying the allegations in the SEC’s complaint, have agreed to the entry of final judgments, pending court approval. These judgments would permanently prohibit them from violating the antifraud provisions outlined in Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Act of 1934, including Rule 10b-5, and hold them jointly and severally responsible for disgorgement of $566,483, along with $46,836 in prejudgment interest. Bisnoff has also agreed to an officer-and-director bar, a $233,229 civil penalty, and a permanent injunction barring her from participating directly or indirectly, including through any entity under her control, in the issuance, purchase, offer, or sale of any security in an unregistered offering. However, this injunction does not prohibit Bisnoff from buying or selling securities listed on a national securities exchange for her personal account.

The SEC’s investigation was carried out by staff in the SEC’s Los Angeles Regional Office.