The SEC charged both Gad and Guido with violating anti-fraud provision in section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder, and the tender-offer provision in section 14(e) of the Exchange Act and Rule 14e-3 thereunder. In separate settlements, each consented to cease and desist from any further securities violations. Gad agreed to pay a $51,700 civil monetary penalty, and Guido agreed to pay $40,700, with an acknowledgement by the SEC Guido’s cooperation with investigators.
On the same day, the US Attorney’s Office announced criminal charges against Gad and Guido. According to the criminal information, Gad and Guido were each charged with two counts of securities fraud. At his June 30, 2021 arraignment, Gad pleaded not guilty but informed the court that he had signed a written agreement with federal prosecutors in which he would enter a guilty plea. Gad’s change of plea hearing is currently scheduled for August 4, 2021. Guido also pleaded not guilty and informed the court that he had entered into a deferred prosecution agreement with the government to defer his prosecution as long as he complies with the terms of the agreement.