Securities and Exchange Commission v. Kramer
United States District Court for the Middle District of Florida
778 F. Supp. 2d 1320 (2011)
- Written by Sharon Feldman, JD
Facts
Kenneth Kramer (defendant) and Bruce Baker were business associates. Baker facilitated a transaction that formed the public company Skyway Communications Holding Corp (Skyway). Skyway hired Baker and others to find investors and compensated finders with Skyway shares. Baker asked Kramer to tell people about Skyway. Skyway paid Kramer for introducing Nick Talib, who sold $14 million worth of Skyway shares to investors. Kramer bought Skyway shares and told his sons, several friends, his doctor, and his attorney about the company. One friend told others, some of whom invested. Baker asked Kramer for information about these purchases and paid Kramer 20 percent of the number of shares purchased. The Securities and Exchange Commission (SEC) (plaintiff) sued Kramer for acting as an unregistered broker in violation of § 15(a)(1) of the Securities Exchange Act of 1934 (Exchange Act). Moving for judgment, Kramer argued that he did not engage in the business of effecting securities transactions for others’ accounts, discussed investments the way people discussed politics or sports, told only some relatives and friends about Skyway, acted as a finder by introducing Talib to Skyway, and reported Skyway purchases to Baker because Baker requested and agreed to pay for the information.
Rule of Law
Issue
Holding and Reasoning (Merryday, J.)
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