SEC v. Morningview Financial, LLC, Miles M. Riccio, Joseph M. Riccio, Jr. — U.S. Securities and Exchange Commission Litigation Release No. 26220, dated January 15, 2025.
Morningview Financial, LLC, and its managing member Miles M. Riccio, were accused of acting as unregistered securities dealers. They allegedly funded penny stock issuers, converted notes and warrants into over 3.2 billion shares, and sold most of these shares publicly. The SEC settled with the defendants, resulting in injunctions, over $3.6 million in disgorgement, over $780,000 in prejudgment interest, and $650,000 in civil penalties.
Imagine a company that secretly acted like a stock seller without permission. This company and its boss bought special promises (like options to buy stock later) from small, risky companies. Then, they turned those promises into a huge number of shares and sold them to the public. The government stepped in and made them pay back the money they made, plus extra fines, and banned them from doing this again.
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.
On December 23, 2024, the United States District Court for the Southern District of New York entered final judgments on consent against Defendant Morningview Financial, LLC, and Defendant Miles M. Riccio, who allegedly acted as unregistered dealers, and Relief Defendant Joseph M. Riccio, Jr. The SEC’s complaint, filed on September 23, 2022, alleged that Morningview Financial and Miles Riccio acted as securities dealers from approximately July 2017 through at least December 2021, notwithstanding the fact that they were not registered as dealers with the SEC, nor was Miles Riccio associated with an SEC-registered dealer. The SEC also alleged that Defendants funded 35 penny stock issuers in exchange for at least 68 convertible notes and 4 warrant agreements, converted the notes and the warrants to obtain more than 3.2 billion shares of newly issued shares of common stock, and then publicly sold over 90% of these new shares of common stock. Without admitting or denying the allegations in the complaint, Defendants and Relief Defendant consented to the entry of the final judgments, which permanently enjoin Defendants from violating the dealer registration provisions of the Securities Exchange Act of 1934, order Defendants and Relief Defendant to pay total disgorgement of over $3.6 million and total prejudgment interest of over $780,000, order Defendants to pay total civil penalties of $650,000, impose five-year penny stock bars on Defendants, and order that Morningview Financial surrender for cancellation any shares obtained through convertible notes or warrants, conversion rights under any remaining convertible notes, and unexercised warrants. Additionally, on January 2, 2025, the SEC entered an administrative order, upon consent, barring Morningview Financial and Miles Riccio from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, with a right to reapply for reentry after five years.
Named in this action: Morningview Financial, LLC, Miles M. Riccio, Joseph M. Riccio, Jr..