SEC v. LottoNet Operating Corp., et al. (boiler rooms, 2017)

Judgment entered

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In March 2017 the SEC charged LottoNet, its CEO David Gray and sales agent Joseph Vitale over a boiler room scheme. On February 26, 2018 the Southern District of Florida entered a default judgment against Gray with $473,000 disgorgement, $14,398.46 interest and a $473,000 penalty; Vitale pleaded guilty in a parallel criminal case.

The record

What was ordered

Civil penalty

$473k

Disgorgement

$473k

Prejudgment interest

$14.4k

Total relief

$960k

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

This library tags the matter as boiler rooms, based on the conduct the document describes. 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.

Outcome. The court's final default judgment against Gray, entered February 26, 2018 after he did not respond to the complaint, permanently enjoins him from violating the antifraud provisions and orders $473,000 in disgorgement, $14,398.46 in prejudgment interest and a $473,000 civil penalty, $960,398.46 in total. An SEC filing in a separate administrative proceeding says Vitale pleaded guilty to one count of mail fraud and was sentenced on August 22, 2017 to 57 months in prison, so a criminal parallel exists, but that sentence is Vitale's and is not recorded as a record-wide sentence. This outcome covers Gray; I did not open documents showing the final result for LottoNet Operating Corp. or for Vitale's civil case. Checked on 2026-10-04.

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.

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

Timeline

1. 2017-03-27 Litigation release published
2. 2018-02-26 Final default judgment against David Gray
3. 2017-08-22 Vitale sentenced to 57 months in the criminal case (as described in the SEC Division motion)

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
• Final default judgment against David Gray
• SEC Division motion for sanctions against Joseph Vitale (describes criminal case)

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.