Markets Wired

On April 11, 2019, two federal court judges entered final judgments against a New York City man, Joseph Meli, and six of his companies, in connection with two SEC cases that charged Meli with operating multi-million dollar fraudulent schemes involving purported purchases and resales of tickets to popular concerts and Broadway shows. Meli and his companies settled with the SEC and collectively agreed to pay more than $58 million in disgorgement and prejudgment interest.

In January 2017, Meli was charged by the SEC, arrested by the FBI, and charged criminally by the U.S. Attorney for the Southern District of New York. In the SEC case, Meli’s wife and mother were named as relief defendants based on their alleged receipt of stolen investor funds. In September 2017, the SEC charged Meli in a second case also involving an alleged ticket resale scheme, along with New York-based sports radio personality Craig Carton and six of their companies. Meli pled guilty to securities fraud in the parallel criminal case in October 2018 and was sentenced in April 2018. In connection with his guilty plea, Meli admitted to raising millions of dollars from investors, including by providing some investors with fake agreements containing fraudulent signatures that claimed to show Meli’s company had agreements with various production and management companies to purchase large blocks of tickets. Meli was sentenced to 78 months’ imprisonment followed by three years’ supervised release, and was ordered to pay restitution and forfeiture totaling more than $160 million. The criminal charge to which Meli pled guilty arose from the same conduct alleged by the SEC.

The final judgments entered against defendants Meli and his companies (127 Holdings, LLC, Advance Entertainment, LLC, and Advance Entertainment II, LLC) permanently enjoin them from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and order them to pay disgorgement and prejudgment interest collectively totaling more than $58 million. The final judgment entered against Meli’s companies that were named as relief defendants (127 Iconic Holdings, LLC, 127 Partners, LLC, and Nineteen Two Productions, LLC) orders them to pay disgorgement and prejudgment interest totaling more than $728,000. Disgorgement and prejudgment interest against Meli and each of his companies is deemed satisfied by entry of the restitution order entered against Meli in June 2018 in the parallel criminal case. Meli’s mother, Anna Meli, who was named as a relief defendant, also agreed to settle with the SEC and to pay more than $336,000 in disgorgement and prejudgment interest. Meli’s co-defendant in the first SEC case, Matthew Harriton, and several of Harriton’s companies, settled the SEC’s charges against them in July 2018. Meli’s wife, Jessica Ingber Meli, who was named as a relief defendant, settled with the SEC in November 2018.

The SEC’s cases are being handled by Dahlia Rin, John McCann, Martin Healey, and Celia Moore of the Boston Regional Office. These settlements fully resolve the first SEC case. The second SEC case remains pending as to Carton and his companies. The SEC appreciates the assistance of the FBI and the U.S. Attorney’s Office for the Southern District of New York.