UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC Admin Release 34-79453, IA Release 40-4582, December 2, 2016: The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Daniel P. McKelvey ("Respondent" or "McKelvey"). On July 5, 2016, a final judgment was entered by consent against McKelvey, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(b)(5) and 20(b) of the Exchange Act and Rules 10b-5 and 13b2-1 thereunder, and aiding and abetting violations of Sections 13(a), 13(b)(2)(A), 13(b)(2)(B), 13(b)(5) and 15(d) of the Exchange Act and Rules 12b-11, 12b-20, 13a-1, 13a-13, 13a-14, 13a-15, 13b2-1, 13b2-2, 15d-1, 15d-13, 15d-14 and 15d-15 thereunder, and Rule 302 of Regulation S-T, in the civil action entitled Securities and Exchange Commission v. Daniel P. McKelvey, et al., Civil Action Number 9:15-cv-80496, in the United States District Court for the Southern District of Florida.

Order

Bar (Permanent)

association with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or NRSRO

Indefinite

12/2/2016

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE 23243, APRIL 16, 2015: THE SEC TODAY ANNOUNCED FRAUD CHARGES AGAINST INDIVIDUALS INVOLVED IN A SCHEME TO OFFER AND SELL PENNY STOCK IN UNDISCLOSED "BLANK CHECK" COMPANIES BOUND FOR REVERSE MERGERS WHILE MISREPRESENTING TO THE PUBLIC THAT THEY WERE PROMISING STARTUPS WITH BUSINESS PLANS. BLANK CHECK COMPANIES GENERALLY HAVE NO OPERATIONS AND NO VALUE OTHER THAN THEIR STATUS AS A REGISTERED ENTITY, WHICH MAKES THEM ATTRACTIVE TARGETS FOR UNSCRUPULOUS INDIVIDUALS SEEKING REVERSE MERGERS WITH CLEAN SHELLS RIPE FOR PUMP-AND-DUMP SCHEMES. THE FEDERAL SECURITIES LAWS IMPOSE VARIOUS REQUIREMENTS ON BLANK CHECK COMPANIES TO PREVENT SUCH ILLICIT USE. THE SEC ALLEGES THAT DANIEL P. MCKELVEY OF FOSTER CITY, CALIFORNIA AND TWO OTHERS ROUTINELY EVADED THESE REQUIREMENTS BY CREATING UNDISCLOSED BLANK CHECK COMPANIES AND INSTALLING FIGUREHEAD COMPANY OFFICERS WHILE FALSELY DEPICTING IN REGISTRATION STATEMENTS AND OTHER SEC FILINGS THAT THE COMPANIES WERE PURSUING REAL BUSINESS VENTURES UNDER THESE OFFICERS. ALLEGEDLY CONCEALED FROM THE PUBLIC WAS THE FACT THAT THE COMPANIES WERE CONTROLLED AT ALL TIMES BY MCKELVEY OR THE OTHER TWO INDIVIDUALS FOR THE SOLE PURPOSE OF ENTERING INTO REVERSE MERGERS WITH UNIDENTIFIED COMPANIES SO THEY COULD PROFIT FROM THE SALES. ACCORDING TO THE SEC'S COMPLAINT FILED IN U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA, MCKELVEY AND THE TWO INDIVIDUALS COLLECTIVELY DEVELOPED NEARLY TWO DOZEN UNDISCLOSED BLANK CHECK COMPANIES AND SOLD MOST OF THEM FOR A TOTAL OF APPROXIMATELY $6 MILLION IN ILL-GOTTEN GAINS. THEY WERE THWARTED FROM FURTHER SALES WHEN THE SEC INSTITUTED STOP ORDER PROCEEDINGS LAST YEAR THAT LED TO THE SUSPENSION OF THE REGISTRATION STATEMENTS OF FOUR ISSUERS BEFORE THEY COULD BE FURTHER PACKAGED FOR SALE. THE SCHEME ALLEGEDLY INVOLVED FORGING OR FALSIFYING HUNDREDS OF CERTIFICATIONS FILED WITH THE COMPANIES' SEC FILINGS AS WELL AS COMMUNICATIONS FROM IMPERSONATING E-MAIL ACCOUNTS, MANAGEMENT REPRESENTATION LETTERS TO ACCOUNTANTS, NOTARIZATIONS ON APPLICATIONS TO THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, AND SECURITIES PURCHASE AGREEMENTS USED IN THE SALES OF THE UNDISCLOSED BLANK CHECK COMPANIES. THE SEC'S COMPLAINT ALLEGES THAT OTHER INDIVIDUALS ASSISTED THE SCHEME BY ACTING AS CORPORATE NOMINEES WITH KNOWLEDGE OF THE FALSE BUSINESS PLANS, DRAFTING OR PROVIDING FALSE BUSINESS PLANS, OR RECRUITING OTHER NOMINEE OFFICERS. THE SEC'S COMPLAINT CHARGES MCKELVEY WITH VIOLATING OR AIDING AND ABETTING VIOLATIONS OF THE ANTIFRAUD, REPORTING, RECORDKEEPING, AND INTERNAL CONTROL PROVISIONS OF THE FEDERAL SECURITIES LAWS.

Judgment Rendered

Injunction

penny stock bar