SEC v. John “Jon” Isaac and Virland A. Johnson — U.S. Securities and Exchange Commission Litigation Release No. 26613, dated August 21, 2026.
The SEC charged Live Ventures Inc. CEO John Isaac and former CFO Virland Johnson with financial and disclosure fraud. They allegedly engineered a transaction to inflate 2016 earnings by $915,500, leading to a 40% higher reported earnings per share. Isaac also allegedly used a stock promoter and planned to sell inflated stock, while Johnson made false statements to accountants. Both consented to penalties and injunctions.
In Plain English
Imagine a company's CEO wanted to make the company look more profitable than it was. He created a fake deal after the year ended, pretending it happened earlier, to add over $900,000 to the company's income. He then used this fake number to tell everyone the company earned much more per share than it really did. The former CFO helped by lying to the company's accountants about the fake deal. Both ended up agreeing to pay fines and stop doing this kind of thing.
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
- Fabricate 'Other Income' In late 2016, after the fiscal year closed, John Isaac engineered a transaction with Novalk Apps. S.A.S. to falsely create the appearance of negotiations starting within FY 2016. This deal generated $915,500 of fraudulent 'other income'.
- Inflate Company Earnings This fraudulent income increased Live Ventures' (LIVE) FY 2016 pre-tax income by 20%. Isaac then lied to LIVE's outside accountants to justify recognizing this 'other income' in FY 2016.
- Calculate Falsified Earnings Per Share (EPS) Isaac used the inflated earnings and a fraudulently reduced share count to calculate an EPS that was 40% higher than what was reported in LIVE's audited financial statements.
- Issue Misleading Press Release On December 28, 2016, LIVE issued a press release containing the fraudulently inflated EPS. Prior to this, Isaac and LIVE hired a stock promoter to hype the stock.
- Plan Stock Sale Isaac and LIVE also made arrangements to access the brokerage account of Defendant Kingston Diversified Holdings LLC, planning to sell LIVE stock upon the anticipated rise from the inflated results, potentially realizing over $1.1 million.
- File False 10-K On December 29, 2016, LIVE filed its Form 10-K, which included the fraudulent $915,500 of other income and a misleading disclosure about the transaction's circumstances.
- Cover-up Attempts Subsequently, Isaac attempted to cover up his conduct by filing a Form 8-K and issuing a letter to shareholders falsely denying the hiring of a stock promoter and lying to FINRA about the scheme.
- CFO's False Statements Defendant Virland Johnson, the former CFO, aided and abetted LIVE's false statements regarding the 'other income' and also made false statements to Live Ventures' outside accountants in a February 2018 management representation letter.
The Enforcement Action
On August 20, 2026, the SEC filed proposed final judgments as to John Isaac, CEO of Live Ventures Inc., and Virland A. Johnson, former CFO. Isaac consented to a permanent injunction from violating Sections 17(a)(2) and (3) of the Securities Act and a $175,000 civil penalty. Johnson consented to a permanent injunction from violating Rule 13b2-2 under the Exchange Act and a $118,225 civil penalty. Both consented without admitting the allegations.
Named in this action: John Isaac, Virland A. Johnson, Live Ventures Inc..