SEC v. Imran Husain, et al. (shell factories, 2019)

Judgment entered

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In August 2019 the SEC reported a final consent judgment against New Jersey lawyer Gregg E. Jaclin for running a shell factory scheme with Imran Husain, in which sham companies were taken public and sold, and permanently suspended him from practising before the SEC. He must pay $40,473 in disgorgement and interest combined, faces a penny stock bar, and pays no penalty given his anticipated criminal sentence. The case against Husain continued.

The record

What was ordered

Civil penalty

—

Disgorgement

$40.5k

Prejudgment interest

—

Total relief

$40.5k

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 judgment on August 6, 2019 as litigation release LR-24552, in SEC v. Husain, et al., civil action 2:16-cv-03250 in the Central District of California. The release concerns the judgment against Gregg E. Jaclin; the litigation against Imran Husain was ongoing (2 individuals, 0 entities). Earlier versions of this record listed "Imran Husain, et al." and did not say that Husain had not resolved his case.

As alleged in the November 2016 amended complaint, Husain and Jaclin created nine shell companies and sold seven using the same pattern: registration statements for initial public offerings that falsely described a business plan and prior sales to private investors and omitted Husain's control, then reports signed by a puppet CEO. The SEC had issued stop orders on the last two companies before they could be sold. A grand jury indicted Jaclin in May 2017.

Without admitting or denying the allegations, Jaclin consented to an injunction under Securities Act Sections 5 and 17(a), Exchange Act Section 10(b) and Rule 10b-5, with aiding and abetting findings, a penny stock bar, and payment of $40,473 as disgorgement and prejudgment interest together; the release does not split the figure. No civil penalty was imposed in light of his anticipated criminal sentence. He also agreed to a permanent suspension from appearing before the SEC.

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 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.

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

Timeline

1. 2019-08-06 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.

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.

Related actions

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

Record added September 10, 2026. submit a correction.