📋 Tender Overview
The Securities and Exchange Commission today charged Silver Edge Financial LLC Equity Acquisition Company Ltd. EAC the owners of both companies and sales staff of Silver Edge Financial with unregistered broker-dealer activity relating to their sales of interests in shares of various pre-IPO companies.The SECs Orders find that since January 2019 Silver Edge its owner Daniel J. Mackle Sr. and six salespeople sold interests in two funds that were set up as series LLCs with each series representing an interest in shares of a single pre-IPO company. The underlying assets in these series were interests in shares of companies that were expected to undertake an initial public offering or other liquidity event within two-to-five years. The Orders find that Silver Edge Mackle and the salespeople solicited accredited investors and raised more than 65 million while failing to register as brokers with the Commission as required.The SECs Orders also find that EAC and its founder Carsten Klein acted as unregistered dealers in connection with their business of obtaining pre-IPO shares and offering them for sale to various pre-IPO funds including the Silver Edge funds. The Orders find that EAC purchased more than 14 million shares of pre-IPO companies including a number of highly-anticipated offerings and sold more than 13.4 million in shares to various pre-IPO funds while keeping the remaining shares in inventory.The SECs registration requirements ensure that broker-dealers fulfill important responsibilities and regulatory obligations such as submitting to regulatory inspections and maintaining appropriate books and records said Carolyn M. Welshhans Associate Director of the SECs Enforcement Division. Individuals and entities in the pre-IPO space including dealers must comply with the SECs registration provisions when selling securities backed by pre-IPO shares and cannot avoid essential regulatory oversight.The SECs Orders find that Klein EAC Mackle Silver Edge and the six salespeople violated Section 15a of the Securities Exchange Act of 1934. Without admitting or denying the findings all respondents agreed to cease and desist from future violations. Silver Edge and Mackle agreed to pay disgorgement and prejudgment interest of more than 2.5 million and a civil penalty of 975000 and they agreed to industry and penny stock bars with the right to reapply after five years. EAC and Klein agreed to pay disgorgement and prejudgment interest of more than 3.6 million and a civil penalty of 269360. Silver Edge Mackle EAC and Klein also agreed to undertakings that will help ensure the legal and orderly distribution of pre-IPO interests. The six salespeople Scott Esposito Richard Konopka Robert Daniel Louis Dave Nicolas Joshua Simmons and Daniel Esposito agreed to pay civil penalties ranging from 61000 to 124320 and to industry and penny stock bars.
