SEC Halts Penny Stock Scheme Targeting Seniors

The Securities and Exchange Commission today announced that it has filed an emergency action and obtained an asset freeze against the operators of a South Florida-based investment scheme that defrauded over 100 retail investors, many of whom are seniors. Two of the defendants charged were previously barred by the Commission from acting as brokers and offering penny stocks to investors. According to the SEC's complaint unsealed today, NIT Enterprises, Inc., NIT's CEO Gary R. Smith, Jason M. Ganton, and James E. Cleary, Jr., raised $4.9 million from investors while making misrepresentations. The defendants allegedly represented that NIT was raising money to fund the company's efforts to develop its radiation protection products for medical and military applications, which would generate significant returns.