SEC v. Delaney Equity Group LLC, David C. Delaney and Ian C. Kass (reverse merger schemes, 2018)

Settled

Checked against the primary document on October 3, 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 August 2018 the SEC settled with Ian Kass, a former Delaney Equity Group representative, in a proceeding that also named the firm and its CEO David Delaney, finding he helped sell blank-check shells that undisclosed control persons had manufactured. Kass is barred from the securities industry and owes $9,269.85 disgorgement and $1,509.80 interest.

The record

Structured fields for this action, as recorded in our case library.
Agency	SEC
Release number	3-17398
Date filed	2018-08-29
Date resolved	2018-08-29
Status	settled
Asset class	equities
Venue	OTC
Criminal parallel	Yes: guilty plea (Kass), U.S. District Court, Southern District of Florida
Bars imposed	industry-wide association bar, penny stock bar
Defendants	Delaney Equity Group LLC (entity) ; David C. Delaney (individual) ; Ian C. Kass (individual)
Cited as charged or alleged	Exchange Act s.10(b) and Rule 10b-5 ; Exchange Act s.15(c) ; Securities Act s.17(a) ; Securities Act s.5 ; Exchange Act s.32(a) (15 U.S.C. 78ff) (statutes and rules cited in the document; not a finding that they were violated)
Techniques	Reverse merger schemes , Shell factories , Undisclosed control blocks

What was ordered

Civil penalty: —
Disgorgement: $9.3k
Prejudgment interest: $1.5k
Total relief: $10.8k
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 Securities and Exchange Commission issued this order on August 29, 2018 (Securities Act release 10541) in an administrative proceeding begun on August 16, 2016 against Delaney Equity Group LLC, David Delaney and Ian Kass. The findings and sanctions in this order run against Kass only, who settled; the firm settled a separate recordkeeping charge in 2016 and the order does not sanction Delaney.

The order finds that between 2009 and 2013 three undisclosed control persons manufactured at least 12 blank-check companies for sale as public vehicles by reverse merger, presenting each as a start-up run by a named sole officer. Delaney and Kass signed and filed Form 211 applications to FINRA for each shell containing these misrepresentations, and the firm did not perform the Rule 15c2-11 analysis. Kass also took part in sales of unregistered stock, filed DTC applications with false legal opinions, and referred buyers to the control persons.

Kass was ordered to cease and desist from Sections 5(a), 5(c) and 17(a) of the Securities Act and Sections 10(b) and 15(c)(2) of the Exchange Act, barred from association with any broker, dealer, adviser or transfer agent and from penny-stock offerings, and ordered to pay $9,269.85 in disgorgement and $1,509.80 in interest. The record's $20,000 penalty belongs to the firm's separate 2016 recordkeeping settlement and is cleared.

This library tags the matter as reverse merger schemes, shell factories and undisclosed control blocks. The tagging is ours, not the regulator's.

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 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.

Reverse merger schemes — see how it works, what statute it engages, and every other action tagged the same way.
Shell factories — 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

2018-08-29 Administrative proceeding instituted (cease-and-desist)

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 order

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.

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

Action	Agency	Filed	Technique	Penalty	Status
SEC v. Brian Quinn and David Skriloff (Environmental Packaging, 2024)	SEC	2024-10-18	Reverse Merger Schemes , Undisclosed Control Blocks	$461k	judgment
SEC v. Darren Ofsink and Michael T. Morris (CodeSmart, 2023)	SEC	2023-04-03	Reverse Merger Schemes , Undisclosed Control Blocks +1	—	judgment
SEC v. Peter DiChiara (reverse merger schemes, 2020)	SEC	2020-09-03	Reverse Merger Schemes , Undisclosed Control Blocks	$40k	settled
SEC v. Morrie Tobin et al. (undisclosed control blocks, 2019)	SEC	2019-08-30	Undisclosed Control Blocks , Reverse Merger Schemes	—	settled
SEC v. David G. Dreslin, Michael Toups and Leslie Toups (2018)	SEC	2018-12-03	Reverse Merger Schemes , Undisclosed Control Blocks	$345k	settled
SEC v. Manhattan Transfer Registrar Company and John C. Ahearn (reverse merger schemes, 2018)	SEC	2018-05-17	Reverse Merger Schemes , Undisclosed Control Blocks	$50k	settled

Record added September 10, 2026. submit a correction.