SEC v. Fusion Pharm, Inc. (undisclosed control blocks, 2016)

Settled

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In September 2016 the SEC settled administrative proceedings against Fusion Pharm, Inc., finding it issued stock through backdated notes to entities controlled by an undisclosed de facto officer, William Sears, and booked his stock-sale proceeds as false revenue. It was ordered to cease and desist, with money left for a later hearing.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

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Alleged gain

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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 instituted and settled this proceeding on September 16, 2016 (Securities Act release 10210), without admission or denial by the company.

The order describes an approximately $12.2 million scheme at Fusion Pharm, a Colorado cannabis-container maker, between April 2011 and May 2014. Backdated convertible notes and preferred stock were used to issue common stock to three entities controlled by William Sears, an undisclosed de facto officer and control person with a prior securities-fraud conviction. Those entities sold the stock into the market, Sears returned over $1 million of the proceeds to the company, where it was booked as false revenue, and press releases and reports claimed that revenue without disclosing Sears' role.

Fusion Pharm was ordered to cease and desist from Sections 5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) and Rule 10b-5. The order also sets a later public hearing on remedies once the related criminal case in Colorado against Sears and Dittman ends, so no money is recorded yet.

This library tags the matter as undisclosed control blocks because the order centres on a person who controlled the company without being disclosed. The tagging is ours, not the regulator's: agencies charge statutory provisions, not technique names.

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 one technique 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.

Timeline

1. 2016-09-16 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.

Related actions

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

Record added September 10, 2026. submit a correction.