SEC v. Andalusian Resorts and Spas, Inc., John Madsen and Bernard Fried (fake press releases, 2017)

Judgment entered

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In October 2017 the SEC sued Andalusian Resorts and Spas, Inc., its former CEO Bernard Fried and its undisclosed controller John Madsen, alleging false press releases about a Costa Rican hotel acquisition and a pump-and-dump. By October 2018 all three had been resolved: Fried settled in January 2018, the company defaulted in May 2018, and the court imposed an $80,000 penalty on Madsen on October 17, 2018.

The record

What was ordered

Civil penalty

$80k

Disgorgement

$3.3k

Prejudgment interest

—

Total relief

$83.3k

Alleged gain

—

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

The SEC announced this matter on October 30, 2017 as release LR-23973 against Andalusian Resorts and Spas, Inc., John Madsen and Bernard Fried. It alleged false press releases and a pump-and-dump that the SEC halted by suspending trading, with Madsen allegedly controlling the company in secret through Fried as a strawman chief executive.

Outcome: SEC release LR-24323 (October 23, 2018) says Fried, who pleaded guilty in a parallel criminal case, consented to a judgment on January 11, 2018 that enjoined him, barred him from serving as an officer or director and from penny stock offerings, and ordered disgorgement of $3,311 plus interest; the court entered a default judgment against Andalusian on May 10, 2018; and Madsen agreed on March 12, 2018 to a judgment enjoining him and barring him from penny stock offerings, with the court setting a penalty, which it imposed at $80,000 on October 17, 2018. The release says that judgment concludes the SEC's litigation. The release gives no interest figure for Fried and no money for the company.

This library tags the matter as fake press releases, pump and dump and undisclosed control blocks, based on the conduct the regulator describes. The tagging is ours, not the regulator's: agencies charge statutory provisions, not technique names. The release references a parallel criminal proceeding, recorded separately.

What technique is this, and how does it work?

This action is tagged with 3 techniques in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Fake press releases — see how it works, what statute it engages, and every other action tagged the same way.
• Pump and dump — see how it works, what statute it engages, and every other action tagged the same way.
• Undisclosed control blocks — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2017-10-30 Litigation release published
2. 2018-10-17 Final judgment against Madsen imposes $80,000 penalty, concluding the SEC litigation

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEC litigation release
• SEC litigation release LR-24323 (judgments and conclusion of case)

The linked release is a work of the United States government and is not subject to copyright. Our summary and narrative above are our own writing.

Same matter

The library links these 2 records because they appear to concern one matter: the same lead defendant, an overlapping technique tag and close filing dates, or a shared court docket or a release that cites the other. Records are listed by date filed.

This grouping is the library's, made by matching names, techniques, dates and citations when the site is built. It is not the regulator's or a court's determination that the records are one case, and it errs towards missing a link rather than making a false one.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added September 10, 2026. submit a correction.