SEC v. John Madsen, Andalusian Resorts and Spas, Inc. and Bernard Fried (fake press releases, 2018)

Judgment entered

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In October 2018 the Securities and Exchange Commission announced that a federal court had entered final judgment against John Madsen, charged in 2017 with orchestrating a pump-and-dump of Andalusian Resorts and Spas stock through false press releases and a straw CEO, barring him from penny stock offerings and imposing an $80,000 penalty. Co-defendant Bernard Fried, who pleaded guilty in a parallel criminal case, had consented to a judgment with $3,311 in disgorgement plus interest, and Andalusian was enjoined by default.

The record

What was ordered

Civil penalty

$80k

Disgorgement

$3.3k

Prejudgment interest

—

Total relief

$83.3k

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 matter on October 23, 2018 as release LR-24323. The respondents named are John Madsen, Andalusian Resorts and Spas, Inc. and Bernard Fried (2 individuals, 1 entity).

The release states the SEC charged Madsen with masterminding a pump-and-dump scheme and hiding his control of the issuer behind Fried, a strawman CEO. Madsen consented in March 2018 to an injunction and a penny stock bar, with the court setting the penalty; final judgment on October 17, 2018 imposed $80,000. Fried consented in January 2018 to an injunction, officer-and-director and penny stock bars and disgorgement of $3,311 plus interest. This library tags the matter as fake press releases, pump and dump and undisclosed control blocks.

The conduct is recorded against equities.

The relief recorded in our data is a civil penalty of $80,000 against Madsen and disgorgement of $3,311 against Fried. Penalty and disgorgement are distinct: disgorgement returns the gain, while the penalty is punitive. We store them separately so that aggregate figures across the library are not double-counted.

The release references a parallel criminal proceeding. Where a criminal case exists, the civil and criminal outcomes are recorded separately, because they resolve on different standards of proof.

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.

• Fake press releases — see how it works, what statute it engages, and every other action tagged the same way.
• Pump and dump — 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. 2018-10-23 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 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.