The Securities and Exchange Commission (SEC) has initiated cease-and-desist proceedings against Christian Fernandez, also known as Christian Crockwell, for his involvement in a scheme to deceive investors. The scheme involved concealing undisclosed compensation paid by two issuers in exchange for supposedly independent recommendations from an investment newsletter.

Fernandez, along with William Mikula, chief analyst and author of the newsletter, Palm Beach Venture, engaged in activities to promote certain issuers while concealing their compensation. Fernandez negotiated secret compensation for Mikula in exchange for endorsements of the issuers in the newsletter. He funneled the compensation through offshore entities and accounts that he controlled, retaining half for himself and passing the other half to Mikula.

As a result of his actions, Fernandez violated Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder, and caused violations of Section 17(b) of the Securities Act.

Fernandez, a Mexican citizen residing in Marrietta, Georgia, controls Nucleo de Negocios Dialin SA DE CV, a Mexican entity through which some of the funds were funneled. The Commission previously charged Fernandez for similar conduct related to three other issuers.

The scheme involved two issuers, with Fernandez playing a central role in concealing compensation from them in exchange for promotion. In one instance, Fernandez negotiated with an executive to pay undisclosed compensation for promoting Issuer 1, using some of the funds to purchase and insure a Range Rover for Mikula. Similar actions were taken for Issuer 2, with Fernandez sending fake invoices to collect payment for the promotion.

As part of the settlement, Fernandez agreed to cease and desist from committing or causing any violations of securities laws and pay disgorgement of $331,782.11 and prejudgment interest of $30,094.34 to the SEC. The Commission will hold the funds in an account pending a decision on distribution.