SEC Sues Officers for Alleged Torchlight Energy Stock Scheme (1)

The Securities and Exchange Commission (SEC) sued the alleged perpetrators of a stock scheme that raised $137.5 million for Torchlight Energy Resources Inc., which was financially strapped prior to a merger.

The complaint, filed in the US District Court for the Southern District of New York, says that John Brda, Torchlight’s then-CEO, devised a series of transactions that saw the oil and gas company’s stock price increase by 200% in a one-week span in 2021.

The plan devised by Brda involved the creation of a short squeeze—a sharp rise in the price of Torchlight’s stock that would make holders who ...