SEC v. Edward F. Panos, et al. (shell factories, 2016)

Judgment entered

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In December 2016 the SEC charged Utah microcap promoter Edward F. Panos with running a shell factory: creating and selling public shells through figurehead CEOs while hiding his ownership, then promoting the stock and selling his remaining shares. Without admitting the allegations he agreed, subject to court approval, to pay $1,437,503 in disgorgement, $345,000 in interest and a $1,437,503 penalty and to accept officer-director and penny stock bars; his wife is a relief defendant.

The record

What was ordered

Civil penalty

$1.4m

Disgorgement

$1.4m

Prejudgment interest

$345k

Total relief

$3.2m

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 this action on December 20, 2016 as litigation release LR-23703. The complaint, filed December 19, 2016 in the U.S. District Court for the District of Columbia (No. 16-cv-2473), names Edward F. Panos as defendant and his wife Allison Panos as a relief defendant, a party holding gains but not accused of the fraud (1 individual defendant, 1 relief defendant). Earlier versions listed the respondent as "Edward F. Panos, et al."

The SEC alleges that Panos created microcap shells, including E-Waste Systems, Inc., took them public and sold them for hundreds of thousands of dollars while acting through figurehead CEOs and hiding his large beneficial ownership in accounts not in his name. It alleges he then paid for promotional campaigns and sold his remaining shares after the price rose, and in one instance used college students to run a sham private offering. The charges are under Sections 5(a), 5(c) and 17(a) of the Securities Act, Sections 10(b), 13(g) and 20(b) of the Exchange Act and Rules 10b-5 and 13d-1.

Panos consented, without admitting or denying, to a judgment that includes disgorgement of $1,437,503, prejudgment interest of $345,000 and a civil penalty of $1,437,503, an officer-and-director bar, a penny stock bar and a ban on being paid for promoting penny stocks. Allison Panos is jointly liable for the disgorgement and interest. The release says the settlement was pending court approval; an earlier version of this record omitted the penalty.

For the regulator's own account of the facts, read the primary document linked above.

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.

• 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

1. 2016-12-20 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.