In the Matter of
ORDER INSTITUTING CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933, MAKING FINDINGS, AND IMPOSING A CEASE-AND-DESIST ORDER
II. In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over it and the subject matter of these proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Making Findings, and Imposing a Cease-and-Desist Order (the "Order"), as set forth below.
III. On the basis of this Order and Respondent's Offer, the Commission finds1:
A basic purpose of Section 5 of the Securities Act is to ensure that full and accurate information concerning an issuer and its securities is disseminated in connection with an offer and sale of the issuer's securities.2 Securities Act Section 5(b)(1) requires that any prospectus used to offer a security after the filing of a registration statement comply with Securities Act Section 10. Prospectuses that fail to disclose to investors the information required by Section 10 could artificially affect the price of an issuer's security. Issuers of securities, underwriters, and dealers must be cognizant of their obligations to refrain from improperly stimulating investor interest or conditioning the markets prior to or during securities offerings through the direct or indirect transmission of prospectuses that fail to comply with Securities Act Section 10.
OTHER RELEVANT INDIVIDUALS/ENTITIES
The restrictions on offering communications imposed by the federal securities laws commenced no later than when
6. Between that time and the end of the
8. As a result of the conduct described above,
Respondent has undertaken to:
A. In connection with this action and any related judicial or administrative proceeding or investigation commenced by the Commission or to which the Commission is a party, (i) agree to appear and be interviewed by Commission staff at such times and places as the staff requests upon reasonable notice; (ii) accept service by mail, email, or facsimile transmission of notices or subpoenas issued by the Commission for documents or testimony at depositions, hearings, or trials, or in connection with any related investigation by Commission staff; (iii) appoint Respondent's counsel in these proceedings as agent to receive service of such notices and subpoenas; (iv) with respect to such notices and subpoenas, waive the territorial limits on service contained in Rule 45 of the Federal Rules of Civil Procedure and any applicable local rules, provided that the party requesting the testimony reimburses Respondent's travel, lodging, and subsistence expenses at the then-prevailing
In determining whether to accept the Offer, the Commission has considered the undertaking set forth above.
IV. In view of the foregoing, the Commission deems it appropriate to impose the sanctions agreed to in Respondent's Offer.
Accordingly, it is hereby ORDERED that:
A. Pursuant to Section 8A of the Securities Act, Respondent CytRx cease and desist from committing or causing any violations and any future violations of Section 5(b) of the Securities Act.
B. Within 14 days of the entry of this Order, Respondent CytRx shall pay a civil money penalty in the amount of
Payment must be made in one of the following ways:
(1) Respondent may transmit payment electronically to the Commission, which will provide detailed ACH transfer/Fedwire instructions upon request;
(3) Respondent may pay by certified check, bank cashier's check, or
Accounts Receivable Branch
Payments by check or money order must be accompanied by a cover letter identifying the payor as the respondent in these proceedings, and the file number of these proceedings; a copy of the cover letter and check or money order must be sent to
C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be treated as penalties paid to the government for all purposes, including all tax purposes. To preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any award of compensatory damages by the amount of any part of Respondent's payment of a civil penalty in this action ("Penalty Offset"). If the court in any Related Investor Action grants such a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting the Penalty Offset, notify the Commission's counsel in this action and pay the amount of the Penalty Offset to the
By the Commission.
1 The findings herein are made pursuant to Respondent's Offer and are not binding on any other person or entity in this or any other proceeding.
2 See Publication of Information Prior to or after the Effective Date of a Registration Statement, Securities Act Release No. 3844, 22 Fed. Reg. 8359 (
3 The information about
4 These prospectuses did not meet the requirements for final prospectuses, preliminary prospectuses, or free writing prospectuses.
5 Seeking Alpha maintains a website (www.seekingalpha.com) that describes itself as a "platform for investment research, with broad coverage of stocks, asset classes, ETFs and investment strategy," where "articles frequently move stocks, due to a large and influential readership which includes money managers, business leaders, journalists and bloggers."
6 DreamTeam refunded
9 DreamTeam's payment of the writer was contrary to DreamTeam's representation, before
11 See, e.g., Securities Offering Reform, Securities Act Release No. 8591, Exchange Act Release No. 52056, Investment Company Act Release No. 26693, 70 Fed. Reg. 44722, 44745 n.211 (