SEC v. Laidlaw Energy Group, Inc. and Michael B. Bartoszek, Case No. 13-cv-3887 (S.D.N.Y.). On June 5, 2013, the SEC announced charges against Laidlaw Energy Group and its CEO Michael B. Bartoszek. According to the SEC, Bartoszek sold billions of shares of Laidlaw stock at well below the market price. The SEC alleges that Laidlaw did not register the stock offerings with the SEC and the offerings were not exempt from registration. Laidlaw made $1.2 million from the stock sales and these funds were the only source of company revenue. The SEC suspended trading in Laidlaw stock in June 2011.
The SEC also alleges that Bartoszek traded millions of shares of Laidlaw common stock while possessing material, confidential information about the company’s poor financial situation and its illegal stock sales. He allegedly made more than $318,000 in profits. In addition, the SEC alleges that Laidlaw and Bartoszek made false statements about the ownership of Laidlaw shares in SEC filings. According to the SEC, Laidlaw and Bartoszek told investors that the purchasers of Laidlaw stock bought billions of shares to hold as an investment when in fact they knew the investors dumped the shares into the market for a quick profit.
The SEC charged Laidlaw and Bartoszek with violations of Sections 5(a) and 5(c) of the Securities Act, Section 10(b) of the Exchange Act. The complaint also charges Bartoszek with violations of Section 17(a) of the Securities Act and secondary liability under Sections 20(a) and 20(e) of the Exchange Act for Laidlaw’s violation of Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5. The SEC seeks disgorgement, civil monetary penalties, injunctive relief, and is seeking penny stock and officer and director bars against Bartoszek.