The SEC Also Took Action Against Gery Shalon
Perhaps what is even more remarkable than Gery Shalon’s extensive and significant criminal background, specifically as it pertains to financial fraud, is the fact that the SEC was one of the agencies to initiate formal action against Gery Shalon.
The lawsuit that the SEC filed against Gery Shalon and the two co-conspirators named in the SDNY federal indictment is linked below:
The SEC’s lawsuit is substantially more descriptive about the crimes it asserts Gery Shalon and his co-conspirators had committed.
Notably, the lawsuit also states:
“Defendants Aaron and Shalon violated — and unless permanently enjoyed, will continue to violate — Section 17(a) of the…”
Thus, in the statement above, the SEC actively states that they do not believe that there is any means of ensuring that Gery Shalon will not continue to commit financial crime unless he is permanently barred / disabled from doing so.
The SEC reinforces this belief by seeking relief from the defendants that includes a permanent ban from engaging with U.S. citizens as it pertains to securities law:
In the lawsuit, the SEC laid out numerous findings and conclusions derived from their investigation into Gery Shalon and his co-conspirators.
However, rather than simply listing these out, this report will take the time to outline how similar the Shalon’s activities are to the behavior that can be observed in the cryptocurrency space now
Claim #1 — Pumping Stocks With Artifical News
In the portion of the indictment that details the findings by the SEC, they start by asserting that:
The parallels between the scheme outlined above and observable behaviors in the cryptocurrency space are numerous.
However, there are a few elements of the pump-and-dump scheme that the SEC outlined that strongly mirror what is occurring at present in the crypto space.
Below is a List of the Elements the SEC Outlined as Part of the P&D Scheme by Gery Shalon et. al:
- “Defendants controlled at least twenty stock promotion sites” (Element #1)
- “Defendants sent multiple emails touting the same issuer, purporting to come from different, seemingly unrelated sources” (Element #2)
- “Prior to these promotions…Defendants…generally obtained stock in the issuers that they were promoting” (Element #3)
- “At the same time that they were encouraging the email recipients to buy the promoted stocks, the Defendants or their associates sold their shares into the buying activity that they generated.” (Element #4)
- “Disclaimers did not reveal the promoters’ stock ownership or their intention to immediately sell their shares and profit from the increase in price and demand that their touts generated.” (Element #5)
Parallels Can Be Seen in Trilliant’s ICO Promotion Campaign:
Despite the glaring errors in Trilliant’s value offering (listed in the first section of this report), there was a near-unanimous consensus among all ICO review websites that Trilliant was a great offering by competent and legitimate people.
In fact, its difficult to find a review of Trilliant that contains any criticism.
Element #1 of the P&D Scheme
Below is an annotated screenshot of Google search results for the term, ‘Trilliant ICO review’:
As detailed by the annotations in the picture above, almost every website begins ‘ico’ and has some variant that alludes to a list or ranking system of some sort — most likely to take advantage of Google SEO that more than likely provided these sites as results to unwitting investors using search queries like ‘What are the best ICOs?’ or ‘Rank the best ICOs’.
Below is an excerpt from the website ‘icotokennews’, which was listed among the search results for our query, ‘Trilliant ICO review’:
It Appears That There is One Controller of Many of These Sites
As noted in the first element of the pump-and-dump schemes perpetuated by Gery Shalon et. al in the SEC lawsuit, the defendants were able to inundate consumers with a multitude of reports and e-mails from entities that appeared to be separate from one another, but were, in fact, related.
A similar phenomenon can be seen via analysis of the Trilliant ICO promotional content.
As a disclaimer, the author(s) of this report cannot definitively prove that these sites are owned by the same entity, it is clear that there is at least one central, unifying force pushing identical content across a multitude of ‘ICO review’ sites that users more than likely thought were unrelated to one another.
This discovery was made by copying a statement from the ‘icoranker’ Trilliant review, then pasting it into Google with quotes — which instructs Google to spit out results with the exact phrasing contained within the quotes.
Below is the quote:
The quote extracted was the highlighted phrase, “your own Fractional Ownership Units let you participate in our lucrative crypto hardware, while we do all the work.”
Below are the results Google gives when asked to search for other sites containing this exact quote (_note that the “_intext:” operator is not needed with quotes):
As shown in the screenshots above, there are dozens of ICO review sites that all contain the exact same information about Trilliant.
Another criticism of the SEC that could be leveled in the larger context of Gladius Network is that the SEC has also done almost nothing to mitigate the rigid control of all information about the blockchain space.
While it is possible that the author(s) of this report simply overlooked possible candidates, the author(s) were unable to find one website or source that provided a legitimate, non-bias review of Trilliant that critically analyzed the project’s offering or its merits.
Claim #2 — False Identities
This claim by the SEC is extremely straightforward and it also mirrors the activities that Gery Shalon and others are still engaged in, as subsequent reports in this series will uncover.
Claim #3 — Elaborate Long Lasting Promotion Campaigns Resulting in Inconceivable Exponential Gains
The parallels between the behaviors described in the screenshot above and observable occurrences in the digital currency space should be obvious to any reader that is familiar with the space itself.
The greatest parallel between the digital currency space and the outlined behaviors of Gery Shalon et. al by the SEC can be found in the portion of the excerpt that states:
“On May 20, 2011, the closing share price reached $0.33, an increase of over 1,800% over to the average closing price of $0.017 during the trading days immediately preceding the promotion, and, on May 23, 2011, the trading volume exceeding 30 million shares, compared to the average daily trading volume of approximately 1.2 million shares for the three months immediately preceding the promotion.”
Wrapping Up the Exposition on Gery Shalon’s Background
There are numerous additional schemes perpetrated by Gery Shalon that the lawsuit outlines that will not be covered in this report because these schemes, by themselves, could produce another volume of reports.
To clarify, the extensive presentation on Gery Shalon’s background was provided because:
- He is explicitly attached to Gladius Network and this is corroborated via public reporting (court documents), which will be analyzed in the following section.
- The fact that there is public information attaching Gery Shalon to Gladius Network months before the SEC published their press release stating that they would assess no penalties on Gladius Network makes the decision even more ludicrous in context.
- This report spent a substantial amount of time outlining the SEC’s dissection of Gery Shalon’s crimes in their lawsuit against him in 2015 to make the greater point that the SEC is extremely well aware of the activities, connections, tendencies and behaviors of Gery Shalon. Armed with this information, its hard to assess the SEC’s treatment of Gladius Network with extreme skepticism.
Disclaimer: The purpose of this report is not to put forth conspiracy theory, but rather probe and ask questions as a concerned citizen and eligible investor that is targeted by nefarious entities such as Gery Shalon, whose reputation makes him arguably one of the most effective financial criminals of the 21st century, in league with the likes of Bernie Madoff.
The information provided above should make it clear that any individual or entity working with or in affiliation with Gery Shalon deserves significant scrutiny.
Gery Shalon plays a bigger role in the grand scheme of cryptocurrency fraud. This will be detailed in subsequent reports.