SEC v. Carnovale, et al. (undisclosed control blocks, 2023)

Judgment entered

Checked against the primary document on October 2, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, with sampled and disputed records read a second time. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

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In 2023, the Securities and Exchange Commission obtained a judgment against Carnovale, et al., alleging conduct this library classifies as undisclosed control blocks and unregistered distributions.

The record

Structured fields for this action, as recorded in our case library.
Agency	SEC
Release number	LR-25685
Date filed	2023-03-31
Date resolved	2023-03-31
Status	judgment
Asset class	equities
Criminal parallel	No
Bars imposed	penny stock bar
Defendants	Carnovale, et al. (individual)
Cited as charged or alleged	Exchange Act s.10(b) and Rule 10b-5 ; Securities Act s.17(a) ; Securities Act s.5 (statutes and rules cited in the document; not a finding that they were violated)
Techniques	Undisclosed control blocks , Unregistered distributions

What was ordered

Civil penalty: —
Disgorgement: —
Prejudgment interest: $28.4k
Total relief: $28.4k
Alleged gain: $231k

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 Securities and Exchange Commission announced this matter on March 31, 2023 as release LR-25685. The respondents named are Carnovale, et al. (1 individual, 0 entities).

The release describes two Canadian residents who allegedly gained secret control of thinly traded microcap companies, hired promoters to create demand, hid their control, misled brokers and transfer agents about whether their shares could be sold, and sold into the market. The charges listed are Section 5 registration violations and Section 17(a) and Rule 10b-5 fraud; the release does not allege that any promoter's payment was concealed from readers, so the paid-promotion tag has been replaced with undisclosed control blocks and unregistered distributions.

This library tags the matter as undisclosed control blocks and unregistered distributions, based on the conduct the regulator describes. Each tag links to a page explaining how that technique works, what statute it engages, and what penalties comparable actions have attracted. The tagging is ours, not the regulator's: agencies charge statutory provisions, not technique names.

The conduct is recorded against equities.

Non-monetary relief recorded: penny stock bar.

For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the release.

What technique is this, and how does it work?

This action is tagged with 2 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.

Undisclosed control blocks — see how it works, what statute it engages, and every other action tagged the same way.
Unregistered distributions — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

2023-03-31 Litigation release published

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

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 3 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.

Date filed	Agency	Record	Status
2021-12-02	SEC	SEC v. Carnovale, et al. (undisclosed control blocks, 2021)	Judgment entered
2023-03-31	SEC	SEC v. Carnovale, et al. (undisclosed control blocks, 2023)(this record)	Judgment entered
2024-01-03	SEC	SEC v. Carnovale, et al. (undisclosed control blocks, 2024)	Judgment entered

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.

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

Action	Agency	Filed	Technique	Penalty	Status
SEC v. Carnovale, et al. (undisclosed control blocks, 2024)	SEC	2024-01-03	Undisclosed Control Blocks , Unregistered Distributions	—	judgment
SEC v. William Andrew Stack, Esq. (undisclosed control blocks, 2023)	SEC	2023-03-31	Undisclosed Control Blocks , Unregistered Distributions	$333k	judgment
SEC v. Carnovale, et al. (undisclosed control blocks, 2021)	SEC	2021-12-02	Undisclosed Control Blocks , Unregistered Distributions	$430k	judgment
SEC v. William Andrew Stack, Esq. (undisclosed control blocks, 2021)	SEC	2021-01-21	Undisclosed Control Blocks , Unregistered Distributions	$333k	judgment
SEC v. Benjamin L. Bunker, Esq. (pump and dump, 2020)	SEC	2020-01-23	Pump And Dump , Undisclosed Control Blocks +1	—	settled
SEC v. Christopher R. Esposito, et al. (undisclosed control blocks, 2018)	SEC	2018-04-30	Undisclosed Control Blocks , Unregistered Distributions	$168k	judgment

Record added September 10, 2026. submit a correction.