U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23428 / December 15, 2015
Securities and Exchange Commission v. Jessica Gilbertson, Civil Action No. 15-cv-4341 (D. Minn.)
SEC Files Subpoena Enforcement Action Against Jessica Gilbertson for Failing to Produce Documents or Appear for Testimony
The Securities and Exchange Commission has filed an action in U.S. District Court for the District of Minnesota to enforce compliance with document and testimony subpoenas served upon Jessica Gilbertson in an SEC investigation for possible violations of the securities laws captioned In the Matter of Dakota Plains Holdings, Inc.
According to the SEC’s application filed on December 10, 2015:
Dakota Plains Holdings, Inc. is a Wayzata, Minn.-based company that became publicly traded as a result of a reverse merger. Prior to the reverse merger, it obtained $9 million in loans from several individuals and entities to whom it issued promissory notes.
- The promissory notes provided that the noteholders would receive bonus payments based on the average price of the company’s stock in its first 20 days of public trading.
Ms. Gilbertson was one of the holders of the promissory notes and a significant Dakota Plains stakeholder.
Upon being publicly listed, the stock price of Dakota Plains almost immediately rose to $12 per share on very light volume and stayed at or near $12 per share for almost exactly 20 days. The price then declined gradually and the stock is currently trading under $1. As a result of the stock price during the initial 20-day period, Dakota Plains disclosed that the noteholders were entitled to receive payments of approximately $32.9 million.
- As part of its investigation, in April 2015, the staff in the SEC’s Chicago Regional Office served an SEC subpoena on Ms. Gilbertson seeking, among other things, documents related to Dakota Plans and transactions in Dakota Plains securities, and served a further SEC subpoena for testimony in September 2015.
Despite multiple attempts by SEC staff, Ms. Gilbertson has not complied with the subpoenas, refusing to produce any documents or appear for testimony.
The SEC’s application seeks an order from the federal district court compelling Ms. Gilbertson to comply fully with the SEC’s subpoenas. The SEC is continuing its fact-finding investigation and, to date, has not concluded that anyone has violated the securities laws.
See also: SEC Application