MIAMI, July 23, 2019 /PRNewswire/ -- Mr. Altahawi, of Adamson Brothers, recently settled his case with the SEC and has stated the following, "I have great respect for the Securities and Exchange Commission's mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. I have enjoyed and still enjoy a great relationship with the agency as a consultant/filer, where I help my clients to qualify their offering under Regulation A+ and under other regulations."

Mr. Altahawi stated that, "My reputation and my family's reputation were tarnished by print media from known and unknown online publications since April of 2018, relating to my involvement with Longfin as a consultant. Since the initial SEC allegation that were filed in the Southern District of New York in Manhattan on April 5th, 2018 I was advised by my attorneys that I shouldn't be vocal or comment publicly on the case until I settled the allegation with the SEC."

The SEC's Second Amended Complaint alleged the following, "On December 11, 2017, Altahawi falsely reported to NASDAQ that Longfin had sold a total of 1,140,989 shares at $5 per share in the offering.  Altahawi represented that (i) Longfin had sold 1,140,989 shares in the Regulation A offering at $5 per share; (ii) the total number of shares outstanding after closing was 44,040,898; and (iii) there were 364 shareholders in total, each holding at least 100 shares.  Altahawi also sent NASDAQ a final list of shareholders, their addresses, and the quantity of shares each held in book entry.  Altahawi knew or recklessly disregarded that the December 6 Shareholders were company insiders or Meenavalli affiliates who were provided shares in order for Longfin to improperly meet NASDAQ listing requirements."

Mr. Altahawi stated, "In early December of 2017 and during the IPO closing days, I was still a consultant/coordinator between, Longfin, the transfer agent, the underwriter and the NASDAQ. Those were very busy days, I worked long hours remotely from my office in Miami coordinating with various parties.

"I was the one collecting information from Longfin executives, the underwriter and the transfer agent to coordinate with the NASDAQ. Among the documents required was the Reg A shareholders list from the underwriter, and the company. And since the company conducted a direct public offering prior to engaging the underwriters, the company also provided a shareholders list for its direct public offering.

"At one point on December 11 of 2017 the NASDAQ asked me and cc'd the CEO by email if any of the shareholders are related parties. I went back to the company and I asked the same question, and the answer was no.  Immediately I answered the NASDAQ that there are no related parties. The question is, did I know if there were shareholders who were related parties or not.  (The SEC alleges that I passed false information about the related parties and the number of shares sold to the NASDAQ). I wasn't a principal, nor employee, or the underwriter or the company legal counsel at the time. I was an outside consultant and coordinator, and I answered the NASDAQ by email based on the info provided by the company."

The SEC also alleged that, "On September 15, 2017, Longfin issued 2,025,000 Class A common shares to Altahawi in consideration of legal and business consulting services he had performed for the company (the "Consulting Shares").  The Consulting Shares were restricted securities that could not be resold, except under limited circumstances."

Mr. Altahawi stated, "After a lapse of one year since February 1st, 2017, I did seek a legal opinion to lift the restricted legend on my shares in reliance on the Rule 144 exemption (One year holding period). I obtained the legal opinion from a securities lawyer, and I sold some of my consultancy shares. (The SEC alleges that I violated section 5, for selling unregistered securities). The intent of the agreement was that the two million shares were to be issued on February 1st, 2017 because of the advisory work that was rendered since 2015. To be clear, the equity component was compensation for work already done by me as a consultant to Longfin subsidiary since 2015."

The SEC alleged, "Between January 31, 2018 and March 6, 2018, Altahawi acquired 121,000 additional restricted shares of Longfin from ten of the December 6 Shareholders (the "Private Transaction Shares").  Altahawi's agreements with the ten shareholders were memorialized in a single stock purchase agreement, dated January 12, 2018, even though the ten individuals from whom Altahawi purchased were located in multiple locations.  Altahawi agreed to purchase the 121,000 shares at a price of $30 per share, well below the market price for Longfin shares on January 12."

Mr. Altahawi stated, "I acquired additional shares from several private parties who desired to sell their shares, and due to their country's restrictions, they couldn't open a US based brokerage account. Those shares were acquired by those investors during the direct public offering as far as I know, the company was allowed by its June 16th, 2017 SEC Regulation "A" qualification to sell shares directly to its investors and receive the funds directly to the company account, which explained in detail in my April 17th, 2018 court declaration."

Mr. Altahawi finally stated that, "I will continue to work as a consultant to help young companies go public, and I will be very careful not to violate my settlement agreement with the SEC or any rules or regulations, and  according to my settlement agreement with the SEC, I do not admit nor deny the alleged violations."

Contact: Adamson Brothers, 201-281-2211

SOURCE Adamson Brothers