Reverse merger
A reverse merger takes a private business public by merging it into an existing public shell, avoiding the disclosure and scrutiny of a registered offering. The structure is legal; its use to distribute unregistered stock is not.
Where does reverse merger come up?
This term is used in the following manipulation techniques, each explained in full on its own page.
Enforcement actions involving these techniques
| Action | Agency | Filed | Technique | Penalty | Status |
|---|---|---|---|---|---|
| SEC v. Brian Quinn and David Skriloff (Environmental Packaging, 2024) | SEC | 2024-10-18 | Reverse Merger Schemes , Undisclosed Control Blocks | $461k | judgment |
| SEC v. Meta Materials, Inc. ( and others (engineered short squeeze, 2024) | SEC | 2024-06-25 | Engineered Short Squeeze , Reverse Merger Schemes | $1m | settled |
| SEC v. Darren Ofsink and Michael T. Morris (CodeSmart, 2023) | SEC | 2023-04-03 | Reverse Merger Schemes , Undisclosed Control Blocks +1 | — | judgment |
| SEC v. James T. Patten, Peter L. Coker Sr. and Peter L. Coker Jr. (reverse merger schemes, 2022) | SEC | 2022-09-27 | Reverse Merger Schemes , Price Manipulation | — | filed |
| SEC v. Charles Parkinson Lloyd (reverse merger schemes, 2021) | SEC | 2021-09-15 | Reverse Merger Schemes , Unregistered Distributions | $40k | settled |