U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25964 / April 3, 2024
Securities and Exchange Commission v. Jason Nielsen, 5:20-cv-03788 (N.D. Cal. filed June 9, 2020)
SEC Obtains Final Judgment Against California Trader Engaged in Manipulative Trading Scheme Involving COVID-19 Claims
On March 28, 2024, the Securities and Exchange Commission obtained a final judgment against Jason C. Nielsen.
According to the SEC's complaint, beginning around March 2, 2020, Nielsen attempted to drive the stock price of Arrayit Corporation securities higher using online posts encouraging investors to purchase shares, including numerous messages repeating a false assertion regarding an approved COVID-19 test, without telling them about his large position in Arrayit stock or his plans to sell the shares while others were buying. Nielsen also allegedly created the false impression of high demand for Arrayit stock by placing and subsequently canceling several large orders to purchase shares in a tactic known as "spoofing." According to the SEC's complaint, Nielsen made approximately $137,000 in six weeks, but based on questions regarding the accuracy and adequacy of publicly available information concerning Arrayit, the SEC temporarily suspended trading in Arrayit securities on April 13, 2020, before Nielsen was able to profit further from the scheme.
Without admitting or denying the allegations, Nielsen consented to the entry of a final judgment permanently enjoining him from violating Section 17(a) of the Securities Act of 1933, Sections 9(a)(2) and 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Exchange Act Rule 10b-5. Nielsen further consented to a final judgment: (1) ordering him to pay disgorgement and prejudgment interest in the amount of $149,915; and (2) permanently enjoining him from participating in an offering of penny stock.
The litigation against Nielsen was led by John Han and was supervised by Susan LaMarca and Jason H. Lee, all of the San Francisco Regional Office.