The Securities and Exchange Commission filed a subpoena enforcement action against NVC Fund LLC and its principal, Frank Ekejija, seeking an order directing them to comply with an investigative subpoena for documents and testimony.

According to the SEC’s application, filed on November 30, 2018 in U.S. District Court for the Central District of California, the SEC is investigating whether certain individuals or entities engaged in a potential pump-and-dump scheme in the stock of three penny-stock companies, Cherubim Interests, Inc., PDX Partners, Inc., and Victura Construction Group, Inc. Because the SEC was concerned about the accuracy of the companies’ disclosures, the SEC suspended trading in their securities on February 15, 2018 for ten business days. Based on its ongoing investigation, the SEC has reason to believe that each company issued false public statements in January 2018 to “pump” their stock price, claiming that NVC Fund owns “trillions” of dollars in “AAA-rated” assets, and that each company acquired hundreds of millions of dollars of these assets from NVC Fund. After the stock price and trading volume for each company increased as a result of the news, an entity associated with the companies may have “dumped” their overvalued shares for significant profits.

In June and September 2018, the SEC issued subpoenas to NVC Fund and Ekejija for the production of documents and testimony. According to the SEC’s application, NVC Fund and Ekejija produced a limited number of documents, and Ekejija gave limited testimony. Both refused to produce key documents responsive to the subpoenas, and Ekejija refused to testify about matters relevant to his participation in the conduct being investigated.

The SEC’s application seeks an order from the court compelling NVC Fund and Ekejija to fully comply with the SEC’s subpoenas. The SEC previously filed a subpoena enforcement action against other parties in this matter. The SEC is continuing its fact-finding investigation in this matter and has not concluded that anyone has violated the securities laws.