SEC obtains Court judgment against SeeThruEquity co-founders
Several months after the United States Securities and Exchange Commission (SEC) said it had reached a settlement with SeeThruEquity co-founders Ajay Tandon and Amit Tandon, the Court has issued a judgment against the defendants.
On Wednesday, January 19, 2022, Judge Louis L. Stanton of the New York Southern District Court, signed an order granting the SEC’s motion for judgment against the SeeThruEquity co-founders.
According to the order, seen by FX News Group, an amount of $250,000 in civil penalties is imposed against defendant Ajay Tandon. An amount of $270,000 in civil penalties is imposed against defendant Amit Tandon.
Also, the defendants are permanently prohibited from promoting, causing the promotion, or deriving compensation from the promotion of any issuer of any security.
Defendants Ajay and Amit Tandon will be prohibited for a period of five years from acting as an officer or director of a public company, as defined in 15 U.S.C. §§ 77t(e) and 78(u)(d)(2), and from offering a penny stock.
Let’s recall that, back in 2018, the regulator charged the stock research firm and its co-founders with defrauding investors by issuing reports purportedly based on “unbiased” and “not paid for” research when in reality they received thousands of dollars from issuers as a condition to providing each report.
According to the SEC’s complaint, SeeThruEquity LLC and brothers Ajay and Amit Tandon camouflaged the payments by inviting companies to make a “presentation” at an investor conference in order to receive a research report for free. SeeThru and the Tandons allegedly collected up to several thousand dollars in conference presentation fees per company, and the issuers regularly had input into the substance of the supposedly unbiased research reports, even including the price targets at times.
The SEC alleges that the Tandons often instructed SeeThru analysts to use different, higher price targets for covered issuers than those yielded through purported quantitative analysis, and the price targets contained in SeeThru’s reports were typically more than 300 percent above the current trading price of the stock.
The SEC further alleges that Ajay Tandon, who serves as CEO, frequently traded in the same stocks that SeeThru was evaluating despite stating in published interviews and elsewhere that neither the firm nor its principals traded in securities for which they published research.
According to the SEC’s complaint, Tandon also engaged in scalping, which is a form of securities fraud that occurs when a perpetrator makes a stock recommendation to investors and contemporaneously trades against that very recommendation in the open market without adequate disclosure.