BIG BANK SCAM! Dealer Converted $3.9M in Notes to BILLIONS of Shares!

SEC v. Mammoth West Corporation, Brad Hare — U.S. Securities and Exchange Commission Litigation Release No. 26181, dated November 25, 2024.

The SEC charged Mammoth West Corporation and its owner, Brad Hare, for operating as unregistered securities dealers. They allegedly bought convertible notes from microcap companies, converted them into shares at a discount, and sold those shares for profit, generating over $2.5 million. The settlement requires them to pay over $3.9 million in disgorgement, interest, and penalties, and surrender remaining securities.

In Plain English

Imagine a company that buys special IOUs (called convertible notes) from small, new companies. This company then turns those IOUs into actual stock, often getting a lot of shares for cheap. They then sell these shares on the stock market to make money. The SEC said this company and its owner did this without being properly registered, which is like a shop not having the right license to sell goods. They had to pay back their profits plus extra fines.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Targeting Microcap Companies Mammoth Corporation, through its owner Brad Hare, specifically looked for small, publicly traded companies (microcaps) that were often struggling financially. They advertised their willingness to buy special types of debt called convertible notes from these companies.
2. Buying Convertible Notes Between April 2018 and early 2024, Mammoth Corporation bought at least 47 of these convertible notes from various microcap issuers. These notes are essentially loans that can be converted into stock.
3. Converting Notes to Shares After acquiring the notes, Mammoth Corporation would then convert them into newly issued shares of stock. They submitted nearly 100 conversion notices to achieve this.
4. Acquiring Shares at a Discount Crucially, the conversion allowed Mammoth Corporation to obtain over 11 billion shares at a significant discount from the prevailing market price, effectively buying stock for much less than it was worth on the open market.
5. Selling Shares for Profit Mammoth Corporation and Hare then sold these newly issued shares into the public market. This activity generated over $2.5 million in profits for them.
6. Operating Without Registration Throughout this period, neither Mammoth Corporation nor Brad Hare was registered with the SEC as a securities dealer, nor were they associated with a registered dealer, which is a requirement for such business activities.

The Enforcement Action

The SEC charged Mammoth West Corporation (dba Mammoth Corporation) and its president and owner, Brad Hare, for failing to register as securities dealers. The settlement requires them to pay over $3.9 million in disgorgement, prejudgment interest, and civil penalties. Mammoth Corporation must also surrender for cancellation all remaining securities obtained through its unregistered dealer activity. The settlement includes injunctions against violating Section 15(a)(1) of the Securities Exchange Act of 1934 and imposes five-year penny stock bars on both defendants. The settlement is subject to court approval.

Named in this action: Mammoth West Corporation, Brad Hare.

Original SEC litigation release ↗ · Browse all cases