SEC v. Brian R. Reiss, Case No. 13-cv-1537 (S.D.N.Y.).  On March 7, 2013, the SEC announced fraud charges against California attorney Brian Reiss for issuing legal opinion letters without any basis.  A legal opinion letter is one provided to transfer agents so that holders of restricted stock can remove the restricted legend and sell the stock in the public markets.  Transfer agents generally require a legal opinion letter that sets forth the basis for lifting the restriction on the stock.  According to the SEC, Brian Reiss created “144letters.com” to promote his legal opinion letter business.  He offered volume discounts to his customers.  Reiss used a computer-generated template to draft his opinion letters without ever performing a legitimate analysis to determine whether the stock should trade freely on the public markets.  Thus, Reiss routinely made inaccurate statements bearing on whether the restriction should be lifted.  The false and misleading statements that Reiss made in opinion letters induced transfer agents to remove the restrictive legends from the stock certificates and permit the sale of free-trading shares to the public.  The SEC charged Reiss with violating Sections 5(a), 5(c) and 17(a) of the Securities Act, and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.  The SEC seeks injunctive relief, disgorgement, civil monetary penalties, and an order barring Reiss from participating in the offering of any penny stock.