The Securities and Exchange Commission (SEC) has charged New Jersey resident John Francis Forsythe, III, and an entity he owns and controls, Tri-Bridge Ventures, LLC, with failing to register with the SEC as securities dealers.
As part of their business, Forsythe and Tri-Bridge allegedly engaged in financing convertible notes and sold billions of shares of stock converted from such notes, generating millions of dollars in gross sales.
The SEC’s complaint, filed in the U.S. District Court for the District of New Jersey, alleges that, from at least February 2017 through at least November 2022, Forsythe and Tri-Bridge engaged in trading convertible notes with penny stock issuers or purchase convertible notes or shares already converted from such bonds from unrelated third parties, convert the bonds into shares at large discounts from market prices, and sell these newly issued shares in the public market at a substantial profit. Forsythe and Tri-Bridge allegedly acquired convertible bonds or shares that had already been converted from such bonds with respect to at least 31 separate issuers.
From approximately May 2019 to November 2022, with respect to at least 25 of these issuers, Forsythe and Tri-Bridge sold at least 10 billion penny shares in the market, generating millions in profits.
At the time of their misconduct, Forsythe and Tri-Bridge were not registered with the Commission and Forsythe was not associated with a registered broker-dealer.
The SEC’s complaint charges Forsythe and Tri-Bridge with violating the registration provision of Section 15(a)(1) of the Securities Exchange Act of 1934.
The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest on a joint and several basis, civil penalties, penny stock bars and delivery to cancel any shares, conversion rights or unexercised warrants acquired by Tri-Bridge through a note conversion or executing commands.