Each month, we publish a roundup of the most important SEC enforcement developments for busy in-house lawyers and compliance professionals. This month, we examine:
Following leadership changes earlier this year (covered in our Top 5 SEC Enforcement Developments for January 2026), the SEC announced the appointment of David Woodcock as Director of the Division of Enforcement on April 8, 2026. Woodcock joins the SEC from private practice, and he previously served as the Director of the Fort Worth Regional Office from 2011 to 2015. He replaced Acting Director Sam Waldon effective May 4, 2026.
On April 7, 2026, the SEC charged Mark D. Anderson, CEO of Drake’s Organic Spirits, Inc. (“Drake’s”), and two entities he controlled—BBFY USA, Inc. (“BBFY”) and Captain Drake, LLC—for alleged booking of sham sales through the pass-through entities and false statements to investors regarding sales. The SEC alleges that, in order to raise funds for Drake’s (which is now defunct), Anderson orchestrated numerous sham “purchases.” In a series of alleged round-trip transactions, the SEC says Anderson used bank accounts belonging to BBFY and another unregistered entity to transfer funds to Drake’s without ever transferring inventory or preparing sales documents. Anderson then transferred approximately the same amount from Drake’s to Captain Drake, LLC, to recoup his funds. Anderson allegedly used these inflated sales figures in offering documents and raised more than $2.4 million from investors.
The complaint, filed in the District of Minnesota, charges Anderson with violations of Exchange Act Section 10(b) and Rule 10b-5, and charges all defendants with violations of Exchange Act Section 10(b), Rules 10b-5(a) and (c), and Securities Act Sections 17(a)(1) and (3). The SEC is seeking injunctive relief and civil monetary penalties, but it is not seeking disgorgement of any ill-gotten gains. This may be a strategic decision, as the Supreme Court recently heard oral argument in Sripetch v. SEC to resolve a circuit split on whether equitable disgorgement is available as a remedy without proving actual pecuniary harm to investors. For more on Sripetch, see our April 20, 2026 Quarterly Federal Securities and Corporate Litigation Newsletter and our Top 5 SEC Enforcement Developments for January 2026.
On April 17, 2026, the SEC filed charges against Donald G. Basile and two entities he controlled—GIBF GP, Inc. and Monsoon Blockchain Corporation—for violations of the Securities Act and Exchange Act. The SEC alleges that Basile made a number of false and misleading statements in offering and selling “Simple Agreements for Future Tokens” (“SAFTs”) for the “right to receive” a future cryptocurrency asset. In the offering documents, Basile marketed the SAFTs as unregistered “securities” or “security instruments,” which were presented as an entitlement to the asset after Basile’s entity determined a “Milestone” had been satisfied. The alleged false statements included that the cryptocurrency asset was “insured” and “asset-backed,” and that “80%” or more of the proceeds from the offering would go into an “underlying fund,” which the SEC alleges never existed. Basile allegedly disseminated information through offering materials, social media accounts, marketing entities, and in personal statements to investors. In addition, the SEC alleges that rather than placing the proceeds into the fund, Basile spent the funds on personal expenses, including real estate, his credit card bills, and a horse for his daughter.
The SEC’s complaint, filed in the Eastern District of New York, charged Basile with violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, Rule 10b-5, and aiding and abetting violations of Securities Act 17(a)(2) and Exchange Action Section 10(b), and charged the entities with violations of Securities Act Section 17(a)(2), Exchange Act Section 10(b), and Rule 10b-5. The SEC is seeking injunctive relief, disgorgement, penalties, and an officer-and-director bar against Basile.
On April 20, 2026, the SEC filed a settled complaint against Rakesh Ahuja, a former employee of an investment advisory firm, for alleged insider trading based on information he learned from his employer while using a close relative’s account. As a senior associate at the investment advisory firm, he researched biopharmaceutical and biotechnology companies to identify investment opportunities for the firm’s funds. The SEC alleged that he breached his duty to his employer by trading based on material nonpublic information regarding the firm’s funds’ potential investment targets on at least four separate occasions, despite knowledge of the firm’s policies prohibiting these trades. In addition, the complaint alleges that Ahuja used a close relative’s brokerage account to execute the trades, including in advance of announcements regarding financing and clinical trial data. For more information on another recent biopharmaceutical insider trading enforcement, see our Top 5 SEC Enforcement Developments for January 2026.
The SEC’s complaint, filed in the Southern District of New York, charged Ahuja with multiple violations of Section 10(b) of the Exchange Act and Rule 10(b). He agreed to a final judgment providing for a permanent injunction against further violations, barring him from working as or being associated with any broker, dealer, or investment adviser for two years, disgorgement of approximately $65,000 in profits, a civil monetary penalty in the same amount, and prejudgment interest.
On April 27, 2026, the SEC filed a settled complaint against RYVYL, Inc. and its two founders. According to the complaint, although RYVYL’s public filings stated that it was a “financial technology company” offering “innovative blockchain-based payment solutions” relying on “proprietary blockchain-based technology,” RYVYL was actually reselling credit card or ACH processing services of other companies. The SEC alleges that RYVYL never possessed proprietary blockchain technology, never processed blockchain transactions, and failed to disclose to the public that most of the transactions it handled involved high-risk merchants, such as cannabis dispensaries.
The SEC’s complaint, filed in the Southern District of California, charged RYVYL and its founders with violations of Section 10(b) of the Exchange Act, Rule 10b-5, and Section 17(a) of the Securities Act. RYVYL was also charged with violations of Section 13(a) of the Exchange Act, Rules 12b-20, 13a-1, 13a-11, and 13a-13, and the founders were charged with aiding and abetting these violations. Each defendant agreed to a consent judgment permanently enjoining further violations of the Exchange Act and Securities Act, imposing civil penalties of $230,464 against the co-founders, and barring them from serving as an officer or director of a public company for five years.
Two additional insider trading cases last month reflect the SEC’s continued focus on individual insider trading enforcement. First, on April 1, 2026, the SEC announced charges against Michael A. Smith, former president and Chief Operating Officer of PetIQ, Inc., a pet products company, and his friend Douglas Joshua Dalton, in advance of the announcement that PetIQ would be acquired by a private equity firm. The SEC alleges that Smith learned about the impending transaction in the course of his employment and purchased PetIQ shares using his ex-wife’s brokerage account, breaching his duty to PetIQ and its shareholders. According to the complaint, shortly after the purchase of shares, Smith disclosed the material nonpublic information to Dalton, his close friend, who then purchased PetIQ stock options. Smith also allegedly knew that Dalton had previously traded in PetIQ securities.
The SEC’s complaint, filed in the District of Idaho, alleges that both defendants violated Section 10(b) of the Exchange Act and Rule 10b-5, and seeks permanent injunctions, disgorgement of their ill-gotten gains, prejudgment interest, civil monetary penalties, and an officer-and-director bar against Smith. Smith pleaded guilty to criminal securities fraud on November 18, 2025, and Dalton pleaded guilty on March 31, 2026. Both are awaiting sentencing in the criminal proceedings.
Second, on April 28, 2026, the SEC filed a settled action against Jai Sondhi, a certified public accountant who was employed as senior director of internal audit and controls at Canoo, Inc., a public company. According to the complaint, Sondhi learned during internal meetings that Canoo was in the final stages of negotiating a major contract to sell thousands of electric vehicles. Sondhi allegedly purchased Canoo common stock and call options while in possession of this material nonpublic information, shortly before the transaction was announced. The SEC charged Sondhi with violating Section 10(b) of the Exchange Act and Rule 10b-5. The settled order imposes a permanent injunction on future violations and requires Sondhi to pay disgorgement of his ill-gotten gains of $54,965, a monetary penalty of the same amount, and prejudgment interest.