The illinois Administrator has filed a complaint alleging misconduct by an attorney in his representation of a client convicted of conspiracy to commit securities fraud, mail fraud and wire fraud, as well as one count of securities fraud.

Respondent practiced law under the auspices of a firm he called the Securities Compliance Group, Ltd. (“SCG”). At SCG, Respondent provided information and advice to his firm’s clients regarding federal securities laws, and he filed documents with the Securities and Exchange Commission (“SEC”), including S-1 registration statements. The S-1 statement is a form used by companies to register their individual securities for sale with the SEC or to register restricted securities held by others for resale. The S-1 form requires the disclosure of, among other things, the names of the “directors, executive officers, promoters, and control persons,” for a company. If a company files an S-1 statement, and the SEC approves it, that company is then able to offer to sell its equity securities to its investors, as well as list the company’s equity securities on an over-the-counter (“OTC”) financial market.

In early April 2015, having completed his term of incarceration, Bret Steinhart, using the name “Tony Stark” (the alter ego of the Marvel Comics’ superhero Iron Man) contacted Respondent about forming a corporation to be called Sonant Communications Corp. (“Sonant”), which would provide telecommunications services for small to medium-sized businesses. Steinhart advised Respondent that Sonant planned to issue 10 million shares of its securities, at an offering price of $0.30 per share, for a total offering price of $3 million.

On April 6, 2015, Respondent sent “Tony Stark” an attorney engagement agreement. On that day, Steinhart responded with the following message:

      “…I received the agreements. I need the name changed on the agreements to Chad Steinhart. [sic] or Chad and Bret Steinhart, I use the name Tony Stark but its [sic] not my real name. The name the agreement should be put in my brothers [sic] name which is Chad Steinhart…
     For future reference my name is Bret. My brother will be the sole officer until further notice. There will probably be two other officers. I will be my brothers [sic] liaison and consultant because I am more familiar with these things and the process and he is not . [sic] … I don’t think I need to be on the agreements. I will consult the company but not be a part of it. I had an arrest like 10 years ago and It [sic] may be a conflict so leave me off of anything. I don’t think we need to deal with my past here for this, its [sic] not necessary.”

On April 10, 2015, Respondent sent Bret Steinhart another engagement agreement, this time listing the client’s name as Bret Steinhart instead of Tony Stark. According to the engagement agreement between Bret Steinhart and Respondent, Respondent agreed to assist Bret Steinhart in forming Sonant by drafting and filing Sonant’s S-1 registration statement with the SEC. Bret Steinhart and Respondent also agreed that Bret Steinhart would pay Respondent $25,000 in attorney’s fees and costs for his representation, made payable over four installments, based on Respondent’s filing of certain SEC documents, including an S-1 form, and Sonant’s commencement of trading.