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by Mike Caswell

The U.S. Securities and Exchange Commission has asked a judge to impose a permanent ban and $2.4-million in financial penalties on Ashmit Patel, a former Ontario lawyer who helped with multiple schemes on the U.S. markets. (All figures are in U.S. dollars.) The SEC says that Mr. Patel improperly sold shares of five companies amidst paid promotions that made claims such as "this stock could catapult by up to 155%." He had acquired the stock in supposed shares-for-services agreements.

The request from the SEC is contained in a motion filed on March 29, 2024, in federal court in San Diego. The proposed penalties include a $1.1-million fine and disgorgement of $918,827 in gains, plus interest. The SEC is also asking that the judge permanently ban Mr. Patel from penny stocks and bar him from future violations. The penalties, should the SEC win them, would be by default, as Mr. Patel has ignored the case.

For Mr. Patel, the SEC case is just one of his legal problems, as he previously pleaded guilty to related criminal charges. Prosecutors in San Diego had sought an eight-month sentence, saying that Mr. Patel was a licensed lawyer who lied to a brokerage to deposit and trade shares. He also had the education and opportunity to earn a living legitimately, they contended.

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