U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25959 / March 28, 2024
SEC Obtains Final Judgment Against Canadian Individual in Microcap Fraud Scheme Targeting Retail Investors
Securities and Exchange Commission v. Matthew Nicosia, William Reininger, Fabrizio Di Carlo, and Ronald Touchard, Civ. Action No. 1:22-cv-05761 (E.D.N.Y. filed Sept. 27, 2022)
On March 27, 2024, the U.S. District Court for the Eastern District of New York entered a final judgment against Canadian resident Fabrizio Di Carlo whom the SEC had charged for his role in a microcap fraud scheme targeting retail investors. Among other things, the judgment orders Di Carlo to pay a total of over $140,000.
According to the SEC's complaint, filed on September 27, 2022, from August 2019 to at least September 2020, DiCarlo, along with co-defendants Matthew Nicosia, William Reininger, and Ronald Touchard, worked with others to fraudulently sell stock in microcap companies by making misleading statements during high pressure sales calls and/or email promotions. The SEC alleges that, as part of the scheme, Touchard introduced Nicosia and Reininger to Di Carlo, who identified and called potential investors to pressure them to purchase stock in Odyssey Group International Inc. According to the complaint, Nicosia and Reininger were Odyssey insiders working with an individual previously charged by the SEC, Charlie Abujudeh, to dump Odyssey shares during the promotional campaigns they were funding. The SEC alleges that Di Carlo and his stock promoters were deceptive and failed to disclose that Nicosia and Reininger were Odyssey insiders, controlled nearly all of the stock that was deposited and available for public trading, and were selling their Odyssey stock into the increased demand created by the promotions they were funding and controlling.
The final judgment, entered by default against Di Carlo, enjoins him from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The judgment orders Di Carlo to pay disgorgement and prejudgment interest of more than $43,970, a civil penalty of $100,000, and imposes a penny stock bar.
The SEC staff responsible for this matter include David D'Addio, Nita Klunder, and Paul Block of the Boston Regional Office. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.