SEC Charges Unregistered Brokers in Penny Stock Scheme Targeting Seniors

The Securities and Exchange Commission today charged three Florida residents with fraudulent sales of stock in NIT Enterprises Inc., a South Florida technology company. The SEC previously charged NIT Enterprises, its former CEO, and two SEC-barred brokers with allegedly defrauding over 100 retail investors, many of them seniors. In the latest action, the SEC’s complaints allege that Mason Newman, Christian Baquerizo, and Kevin Cardenas raised approximately $1.4 million selling unregistered NIT stock to retail investors, most of whom were seniors, and received nearly $500,000 in undisclosed commissions. According to the complaints, the defendants cold-called investors, making baseless promises about NIT’s future profitability and imminent public offering and leading investors to believe that NIT would use their funds primarily for research and development, while concealing that 30% or more of the funds invested would be used to pay commissions to the defendants.