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by Mike Caswell
The U.S. Securities and Exchange Commission has asked a federal judge for a $13.57-million judgment against Minnesota resident Chip Rice and entities associated with him over a scheme involving the improper sale of hundreds of millions of shares. (All figures are in U.S. dollars.) The SEC claims that Mr. Rice sold the stock over a period of four years in multiple unregistered offerings. His sales including 121 million shares of a Saskatchewan OTC Pink listing that claimed to be developing high-tech vertical farms.
The penalties for Mr. Rice are contained in a proposed judgment that the SEC filed on Friday, Feb. 9, in federal court in Minnesota. The $13.57-million includes disgorgement of $12.18-million in gains, plus interest, and fines totalling $1.28-million. In addition, the SEC is asking the judge to permanently ban Mr. Rice from penny stocks. The sanctions would apply to Mr. Rice personally and to corporate entities that he used in the scheme.
The SEC's request comes as part of a case in which the regulator accused Mr. Rice of a scheme involving convertible notes of public companies. The SEC said that he bought and sold newly issued shares without registering as a broker or dealer. The registration process would have included disclosing backers, any regulatory history and financial information.
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