U.S. Securities and Exchange Commission Litigation Release No. 26446, dated December 17, 2025.
The SEC charged three former executives of Ammo, Inc. (now Outdoor Holding Company) with accounting and disclosure fraud. The executives allegedly hid unfavorable information, including that a co-founder, banned from executive roles, was secretly managing key operations and benefiting himself and his family through undisclosed transactions. The company also agreed to a settlement.
In Plain English
Imagine a company's leaders were like a group of friends running a lemonade stand. They told everyone they were making a lot of money, but they were actually hiding problems and making up numbers. One friend, who was supposed to be banned from running the stand because of a past mistake, was secretly in charge and even made deals that benefited his own family. The SEC stepped in to stop this dishonest behavior.
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
- Concealing a Prohibited Executive Fred W. Wagenhals (CEO) and Robert D. Wiley (CFO) allegedly hid the fact that Christopher D. Larson, a co-founder, was playing a critical executive and management role. This was done despite a 2020 federal court order prohibiting Larson from holding such a role at a public company.
- Misleading Public Filings Wagenhals and Wiley made repeated materially false and misleading statements in Ammo, Inc.'s public SEC filings and financial statements. These statements generally served to hide or obscure negative information about the company's management and operations.
- Undisclosed Senior Role Larson's undisclosed senior role allowed him to lead major business operations, including negotiations for Ammo's most significant acquisition. This occurred in direct contravention of the 2020 court order.
- Self-Benefiting Transactions Larson arranged a series of transactions where he or a family member would benefit financially. Examples include Ammo contracting with a company owned by Larson's brother for a $25 million manufacturing facility and a kickback scheme with a vendor.
- Accounting Errors and Omissions Ammo's public reports and financial statements contained fundamental accounting errors and omitted crucial information. Wagenhals and Wiley allegedly approved and certified these reports knowing they were inaccurate.
- Deceptive Financial Portrayals Defendants falsely portrayed Ammo's financial condition more favorably by understating expenses, such as improperly capitalizing investor relations costs. They also misrepresented the reasons for positive earnings metrics.
- Deviating from Compensation Methods The company deviated from its disclosed method of calculating stock-compensation expense. This further contributed to the misleading financial picture presented to investors.
- Lying to Auditors Wagenhals and Wiley allegedly lied to Ammo's outside auditors, a key step in covering up the fraudulent accounting and disclosure practices.
The Enforcement Action
On December 15, 2025, the SEC charged Fred W. Wagenhals, Robert D. Wiley, and Christopher D. Larson with accounting and disclosure fraud. The SEC's complaint seeks permanent injunctions, civil penalties, and officer and director bars against the individuals. Wagenhals and Wiley are also charged with falsifying books and records, lying to auditors, providing false certifications, and failing to reimburse the company for compensation following an accounting restatement under SOX Section 304(a). Disgorgement with prejudgment interest is sought from Larson. In a related administrative proceeding, Ammo, Inc. (n/k/a Outdoor Holding Co.) agreed to cease and desist from violations of various securities laws and implement compliance recommendations.