SEC Files Regulatory Action Against Micah Eldred

Micah Eldred (CRD #: 1959598), a broker formerly registered with Spartan Securities Group, is the subject of a pending SEC regulatory action, according to his BrokerCheck record, accessed on October 21, 2022. Read on to learn more about his conduct as a broker.

2022 SEC Action

On August 31, 2022, the Securities and Exchange Commission initiated regulatory action against Micah Eldred.

The SEC Division of Enforcement alleges that on August 10, 2022, a District Court Judge enjoined Micah Eldred for a period of five years from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(b) thereunder, in the conclusion of a civil action filed by the SEC in Florida.

In that lawsuit, the SEC alleged, among other things, that Micah Eldred made material misrepresentations and omissions from May 2011 through at least May 2014 in support of a fraudulent scheme. He allegedly made misrepresentations and omissions on the following occasions:

• When assisting issuers in the process of becoming publicly quoted, including in applications or submissions made pursuant to Exchange Act Rule 15c2-11.
• When submitting Form 211 applications to FINRA for issuers seeking to initiate or resume quotations of their security. These alleged misrepresentations and/or omissions included the identity of consultants or persons in control of the issuers, the identity of the person or entity for whom a security’s quotation was being submitted, and the issuer’s plans for potential mergers or acquisitions.
• When filing applications with the Depository Trust Company (DTC) or its participants when seeking DTC eligibility for issuers, including with regard to whether issuers were shell or blank check companies.

This regulatory action is currently pending.

Securities Exchange Act of 1934

Section 10(b) of the Securities Exchange Act of 1934 prohibits the use of deceptive, manipulative, and otherwise fraudulent practices in the securities business. Rule 10b-5(b) specifically prohibits materially false statements and omissions of fact.

Rule 15c2-11 requires brokers and dealers to record and make public certain information before publicly quoting a security.

2019 SEC Injunction

On February 20, 2019, the SEC brought an action against Spartan Securities Group, Island Capital Management (dba Island Stock Transfer), and Michael Eldred, enjoining them from committing violations of federal securities laws.

The SEC alleged that the defendants played a role in one or two fraudulent schemes beginning in approximately December 2009 through August 2014. 

Alleged Deceptive Public Floats

During the relevant period, Micah Eldred, Carl Dilley, and David Lopez were allegedly common owners of the parent company of Spartan Securities (registered broker-dealer) and Island Stock Transfers (registered transfer agent) and principals for both of these firms.

These schemes allegedly sought to manufacture at least 19 public companies for sale based on a deceptive public float of falsely designated “free-trading” securities. These schemes allegedly involved material misrepresentations and omissions made to the SEC, DTC, FINRA, and others in order to suggest that the Mirman/Rose and Daniels Companies were legitimate small businesses with independent management and shareholders.

Alleged False Designation

Instead, the SEC alleged that these were actually “blank check” companies, which are companies without a business plan frequently used as a means of raising funds for an acquisition or merger with another company. The management and shareholders of these companies were allegedly stand-ins for control persons who intended to sell all the companies’ securities in bulk for their own benefit.

Further, the SEC alleged that these securities’ false designation as “free trading” (i.e., able to be sold on the public market immediately) was the foundation of these securities’ value, and the bulk sale of these securities would not have generated hundreds of thousands of dollars in proceeds if they had been correctly designated.

Background Information

Micah Eldred has passed the following exams:

• Series 63 – Uniform Securities Agent State Law Examination
• SIE – Securities Industry Essentials Examination
• Series 55 – Limited Representative-Equity Trader Exam
• Series 7 – General Securities Representative Examination
• Series 24 – General Securities Principal Examination

In the past, he worked for the following firms:

• Spartan Securities Group (CRD#:104478)
• J.C. Bradford & Company (CRD#:1287)
• Raymond James & Associates (CRD#:705)
• Richfield Securities (CRD#:16109)

Kurta Law Can Help 

If you have worked with Micah Eldred and have concerns about your investments, don’t hesitate to contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation. 

For nearly 20 years, Kurta Law has advocated for investors to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm that exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf. Do not let securities fraud go unchecked. Start your recovery process today.