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by Mike Caswell

The U.S. Securities and Exchange Commission has won a default judgment against Sandy Winick, the Toronto man facing civil charges in New York for improperly creating 59 shell companies and selling them. The SEC sought the judgment earlier this year, stating that Mr. Winick had not answered the 15-month-old case. U.S. District Court Judge George Daniels granted the SEC's request on Sept. 30, 2010, and referred the case to a magistrate judge to determine damages.

The SEC claims that Mr. Winick, over a two-year period, amassed an inventory of public shells by creating spinoffs from a public company he controlled, First Canadian American Holding Corp. He sold the spinoffs at prices between $50,000 and $100,000. (All figures are in U.S. dollars.) At least six of those shells later became targets of regulatory action. The SEC halted five of them in Operation Spamalot, a crackdown on spam stocks, and it launched an enforcement case against another, ZNext Mining Corp., in 2009.

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