Wayne Burmaster, a broker from Staten Island, New York, will pay $1.3 million in disgorgement to the SEC for selling unregistered penny stock. Burmaster, together with his partner Edward Hayter, sold unregistered shares to investors. Further, they misrepresented the shares as stock in a hospitality holding company, according to the SEC’s complaint. The complaint goes on to allege that Burmaster and Hayter used a fake name, lauded as an accomplished entrepreneur, and solicited the public to invest in their penny stock by using misrepresentations in press releases.

Having sold tens of millions of unregistered shares to a number of companies and giving little to nothing in return, Burmaster and Hayter were able to raise the price and trading volume of the shares, obtaining a profit at the expense of the investors. The SEC asked for disgorgement, civil penalties, and to enjoin Burmaster from further violations and from selling penny stocks. Burmaster failed to make an appearance at a court-ordered pretrial conference, and as such default judgment was entered against him.

The SEC asked for $1.1 million plus interest in disgorgement. That number, an estimation of Burmaster’s illicit gains, was ascertained by an accountant from brokerage account records, wire transfers, and bank account statements. Burmaster argued that he did not personally receive these approximated profits, but Judge John Steele found that this fact, nor his inability to pay, did not preclude the SEC from seeking full disgorgement from him through joint liability. Burmaster will have to pay $1,349,158 within fourteen days of the ruling.

If you or someone you know has lost money as a result of an investment, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies.