SEC v. Jillian Sidoti (undisclosed control blocks, 2020)

Settled

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In October 2020 the SEC charged California attorney Jillian Sidoti with helping a control group evade stock-resale limits by drafting false opinion letters for Blake Insomnia Therapeutics. On 13 May 2022 the Central District of California entered a consent judgment with a US$22,000 penalty, disgorgement of just under US$14,169, US$4,665 in interest and a five-year penny stock bar.

The record

What was ordered

Civil penalty

$22k

Disgorgement

$14.2k

Prejudgment interest

$4.7k

Total relief

$40.8k

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 announced on October 19, 2020 (litigation release 24949) a complaint in the Central District of California against Sidoti.

The SEC alleges that as Blake's attorney she drafted and signed a private placement memorandum and registration statements she knew contained materially false information on its operations and control, arranged for almost all of Blake's stock to be sold to nominee shareholders to hide that the buyers were affiliated with the company, and wrote opinion letters falsely describing control so the transfer agent would lift restrictive legends on the control group's shares. That allegedly let the group sell over five million shares to the public. She is charged under Sections 17(a)(1) and (3), 10(b), Rule 10b-5 and Sections 5(a) and 5(c). The complaint asked for an injunction, a conduct-based injunction, a penny-stock bar and a penalty; the relief actually ordered is set out below.

The $35 million the record showed as alleged gain is the total from the separate January 2020 case against 15 defendants and 45 microcaps, not a gain alleged against Sidoti, and is cleared. This library tags the matter as undisclosed control blocks. The case was pending at the date of the release.

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.

Outcome. SEC release LR-25394 says that on 13 May 2022 the court entered a final judgment, to which Sidoti consented without admitting or denying the allegations. It enjoins her from violating the registration and anti-fraud provisions, imposes a five-year penny stock bar and a five-year restriction on preparing opinion letters, and orders a US$22,000 civil penalty, disgorgement the release describes as just under US$14,169, and US$4,665 in prejudgment interest.

The disgorgement figure is entered as US$14,169 because the release does not give the exact cents. The release does not mention any criminal case.

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. 2020-10-19 Litigation release published
2. 2022-05-13 Final consent judgment entered (SEC LR-25394, published 17 May 2022)

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
• SEC litigation release LR-25394 (final judgment)

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 2 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.