SEC Obtains Securities Fraud Judgment in South Florida
On April 15th, 2025, the Securities and Exchange Commission (SEC) obtained a judgment against a Florida-based sports entertainment company in a securities fraud case. Xtreme Fighting Championships, Inc. and its CEO, Steve A. Smith, Jr. stand accused of engaging in a stock fraud scheme. Here, our Miami investment fraud attorney provides a comprehensive overview of the case.
Allegations: Unlawful Sale of Unregistered Securities
The SEC took enforcement action against Xtreme Fighting Championships, Inc. and the company’s Chief Executive Officer (Steve A. Smith Jr.) A complaint was filed in the United States District Court for the Southern District of Florida. Federal regulators alleged that the company and its leadership engaged in an illegal scheme to sell unregistered securities. According to the complaint, Mr. Smith and the company’s in-house counsel controlled the company’s stock and sold it through entities they falsely presented as unaffiliated. These transactions were neither registered with the SEC nor exempt from registration requirements. By concealing control, Mr. Smith and his associates sidestepped restrictions on insider sales. The scheme resulted in over $5 million in illicit gains.
Allegations: Xtreme Fighting Championships Made False Representations of Audits
Another issue raised by the SEC is that the company made false representations to actual and prospective investors about its financial documents. In April of 2022, Mr. Smith and Xtreme Fighting Championships filed a fraudulent annual report to the public. Specifically, the SEC noted that the documentations stated the company’s financials were independently audited. However, this was not true. The misrepresentation was made to circumvent restrictions on stock sales due to the company’s delinquent filing status. Notably. Mr. Smith also issued social media posts referencing the false report. The SEC contends this conduct was part of a broader manipulation scheme.
Securities Violation Judgement: Disgorgement, Civil Financial Penalties, and Injunctions
The SEC has obtained a successful securities fraud judgment. Xtreme Fighting Championships and its CEO Steve Smith Jr. consented to final judgments issued by the federal court. They did not admit or deny the allegations that were raised by the SEC. Notably, as part of the judgment they were permanently enjoined from violating multiple provisions of federal securities laws, including Sections 5 and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5.
The court ordered joint-and-several disgorgement of $436,000, plus $97,509 in prejudgment interest. Further, there were civil financial penalties as well. The company was fined an additional $436,000 and Mr. Smith was fined an additional $236,451. Further, Mr. Smith agreed to an officer and director bar and a penny stock bar. He is now permanently barred from participating in securities offerings—except for trading on a national exchange in his personal account.
Contact Our Miami Securities Fraud Attorney
At Carlson & Associates, P.A., our Miami securities fraud attorney put investors first. If you or your family member was the victim of securities fraud, we are here as a resource. Contact us today for a completely confidential, no obligation consultation. From our Miami office, we fight for justice for investors throughout all of South Florida.
Source:
sec.gov/enforcement-litigation/litigation-releases/lr-26285
