The U.S. Securities and Exchange Commission (SEC) obtained a final judgment against Michael Gastauer, the German founder of the high-risk payment processor Black Banx (PC42 profile) scheme, for his role in an international scheme that generated more than $165 million of illegal sales of stock on the U.S. markets in at least 50 microcap companies. He is ordered to pay over $17 million. In 2018, the SEC charged Gastauer and six of his US-based entities with aiding and abetting a vast securities fraud scheme orchestrated by UK citizen Roger Knox.
Black Banx (previously WB21) and Michael Gastauer denied the SEC allegations but didn’t fight them either. Contesting the lack of personal jurisdiction and lack of valid service, following the advice of his legal team Gastauer did not participate in the U.S. court proceedings. Michael Gastauer claims to be a billionaire and FinTech Guru. However, we doubt these claims! Gastauer and his entities have been facilitating many schemes as payment processors over the last decade. Lately, the UK Financial Conduct Authority (FCA) issued a warning against Black Banx.
Gastauer apparently has a Napoleon complex. In a tweet, he attacks the SEC and also addresses Elon Musk in this tweet. Gastauer threatens everyone (including FinTelegram) with lawsuits in case of negative coverage of his black money businesses (Black Banx).
The SEC’s complaint alleged that Roger Knox and his network helped sellers of large volumes of microcap securities evade US securities laws that restrict sales by controlling shareholders. On October 26, 2018, the court entered a preliminary injunction and continued an asset freeze against Knox, Gastauer, and the entities they used in the scheme. On October 31, 2019, the court entered judgment by consent against relief defendant Simone Gastauer Foehr, who, as a result of the final judgment against Michael Gastauer, is now required to pay $736,000. In a parallel criminal action, Roger Knox pled guilty to securities fraud. His sentencing remains pending.
On March 23, 2022, the court determined that Michael Gastauer is liable for disgorgement of ill-gotten gains of $11,264,415 plus $1,736,559 in prejudgment interest thereon civil penalty of $4,350,843.