U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25904 / November 29, 2023

Securities and Exchange Commission v. Andrew DeFrancesco, Marlio Mauricio Diaz Cardona, Carlos Felipe Rezk, Nicola Faukovic, and Catherine DeFrancesco, No. 1:23-civ-00131 (S.D.N.Y. filed Jan. 6, 2023)

SEC Obtains Final Judgments Against Former Public Company Officers and Directors, Concluding the Litigation in Fraudulent Filings and Pump-And-Dump Scheme

On November 21, 2023, the U.S. District Court for the Southern District of New York entered final consent judgments against Marlio Mauricio Diaz Cardona and Carlos Felipe Rezk, former officers and directors of Cool Holdings, Inc. (“Cool Holdings”), for their roles in a scheme involving false statements and omissions of material information in filings with the Commission, as well as a fraudulent pump-and-dump of Cool Holdings’ stock. Entry of the final judgments against Diaz and Rezk concludes this litigation.

According to the SEC’s complaint, filed on January 6, 2023, from March 2018 through June 2019, Cool Holdings made false statements and omitted material information in SEC filings, including about a critical business relationship, in each of its quarterly and annual SEC filings, all signed by Diaz, Cool Holdings’ CEO.  Cool Holdings also filed false and misleading registration statements that were all signed by Diaz, Rezk, Cool Holdings’ chief marketing officer, and Andrew DeFrancesco, Cool Holdings’ Chairman of the Board.  In addition, in the second half of 2018, Diaz and Rezk assisted DeFrancesco in conducting a pump-and-dump of Cool Holdings’ stock. 

Both Diaz and Rezk consented to the entry of final judgments permanently enjoining them from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 thereunder.  The final judgments also ordered each to pay a civil money penalty of $223,229 and barred each from serving as an officer or director of a public company.  

The SEC's litigation was conducted by David Stoelting, Mao Yu Lin, and Melissa Coppola of the New York Regional Office; Jason Schall and Danielle Srour of the Home Office; and Katherine Bromberg of the Boston Regional Office. For further information, see Litigation Release No. 25610, January 6, 2023, and Litigation Release No. 25771, July 7, 2023