SEC v. Darren Ofsink and Michael T. Morris (CodeSmart, 2023)

Judgment entered

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In April 2023 the SEC announced final consent judgments against attorney Darren Ofsink and Michael Morris in the CodeSmart Holdings case, who the SEC said helped run its reverse merger into a shell, obscured key holders' stakes and, for Morris, matched trades to inflate the price. They accepted injunctions and penny-stock bars and disgorgement of $319,935.11 deemed satisfied by criminal restitution.

The record

What was ordered

Civil penalty

—

Disgorgement

$320k

Prejudgment interest

—

Total relief

$320k

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 announced on April 3, 2023 (litigation release 25686) that on March 31, 2023 the Eastern District of New York entered final judgments by consent against Ofsink and Morris in SEC v. DiScala, filed in 2014.

The SEC's complaint alleged that from 2013 Ofsink, an attorney, helped execute the reverse merger of CodeSmart into a public shell, then received and sold unregistered CodeSmart shares and obscured other key individuals' holdings, and that Morris engaged in matched trading to inflate the price and received and sold unregistered shares. They were charged under Sections 5(a), 5(c) and, for Morris, 17(a), 9(a) and 10(b).

Without admitting or denying, each consented to a permanent injunction and a penny-stock bar and to disgorgement, $292,409.11 for Ofsink and $27,526 for Morris, plus interest, with payment deemed satisfied by restitution in the parallel criminal case, United States v. DiScala. The record had named only "DiScala et al." This library tags the matter as reverse merger schemes, undisclosed control blocks and matched orders.

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

Timeline

1. 2023-04-03 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.

Related actions

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

Record added September 10, 2026. submit a correction.