SEC v. Michael J. Muellerleile, Esq. and M2 Law Professional Corp. (shell factories, 2016)

Settled

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In December 2016 the SEC settled with California attorney Michael Muellerleile and his firm M2 Law over creating five public microcap shells with friends as officers, false registration statements and sham IPOs through straw shareholders while he kept control. They owe $73,058 disgorgement, $11,209.68 interest and a $70,000 penalty.

The record

What was ordered

Civil penalty

$70k

Disgorgement

$73.1k

Prejudgment interest

$11.2k

Total relief

$154k

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 instituted and settled this proceeding on December 16, 2016 (Securities Act release 10268), without admission or denial by the respondents.

The order finds that Muellerleile handpicked family and friends to incorporate Nevada microcap companies and serve as officers, wrote their Form S-1 and SB-2 statements knowing they were materially false, staged sham IPOs, and gave a transfer agent and a broker-dealer false information to obtain unrestricted shares in the names of straw shareholders while he kept control of them. That produced price quotations for five companies, with most shares later moved to overseas market participants. M2 Law was paid $73,058 in fees. One of the five, On Time Filings, later did a reverse merger, but the conduct charged is the construction of the shells.

This library tags the matter as shell factories and undisclosed control blocks; it previously carried the reverse-merger tag. The tagging is ours, not the regulator's.

The respondents were ordered to cease and desist from Sections 17(a)(2) and (3), Muellerleile was denied the right to practise before the Commission as an attorney and barred from penny-stock offerings, and they must jointly pay disgorgement of $73,058, prejudgment interest of $11,209.68 and a $70,000 penalty.

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 2 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.

• Shell factories — 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. 2016-12-16 Administrative proceeding instituted (102e)

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 20, 2026. submit a correction.