SEC v. Anderson - Securities Fraud Charges
Summary
The SEC filed charges against Mark D. Anderson, BBFY USA, Inc., and Captain Drake, LLC in the District of Minnesota for allegedly orchestrating a fraud scheme involving approximately $2.6 million in sham sales transactions in December 2021 and $391,000 in sham sales in 2022. The SEC alleges the defendants used false financial statements to raise approximately $1.5 million from investors in a 2022 convertible debt offering and more than $900,000 in a 2023 rights offering for preferred stock.
What changed
The SEC filed an enforcement action charging Mark D. Anderson (CEO/founder of Drake's Organic Spirits) and two entities he owned (BBFY USA, Inc. and Captain Drake, LLC) with securities fraud. The complaint alleges Anderson orchestrated approximately $2.6 million in sham sales in late December 2021 and $391,000 in sham sales in 2022 using round-trip transactions through bank accounts in the defendants' names. These false sales figures were then incorporated into offering documents used to raise approximately $1.5 million from investors in a 2022 convertible debt offering and more than $900,000 in a 2023 preferred stock rights offering.
The defendants face charges under the antifraud provisions of Sections 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The SEC seeks permanent injunctions, civil penalties, and a conduct-based bar against Anderson. Companies engaged in securities offerings should ensure financial representations are accurate and not inflated through round-trip transactions, as such conduct triggers substantial SEC enforcement risk with significant civil penalties and permanent injunctive relief.
What to do next
- Review internal controls for revenue recognition accuracy
- Ensure financial statements do not include sham or round-trip transactions
- Consult securities counsel if prior fundraising used potentially inflated sales figures
Penalties
Civil penalties and permanent injunctions sought against all defendants; conduct-based injunction sought barring Anderson from participating in any security issuance, purchase, offer, or sale except for personal accounts
Archived snapshot
Apr 9, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Mark D. Anderson; BBFY USA, Inc.; and Captain Drake, LLC
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26523 / April 8, 2026
Securities and Exchange Commission v. Mark D. Anderson, BBFY USA, Inc., and Captain Drake, LLC, No. 26-cv-02174 (D. Minn. filed Apr. 7, 2026)
SEC Charges Founder and CEO of Minnesota Company in Alleged Fraud Scheme
On April 7, 2026, the Securities and Exchange Commission filed charges against Mark D. Anderson, the founder and CEO of Drake’s Organic Spirits, Inc., and two entities he owned and controlled, BBFY USA, Inc. and Captain Drake, LLC, for allegedly orchestrating sham sales transactions and conducting an offering fraud using false financial statements to solicit investors.
The SEC’s complaint alleges that in the last two weeks of December 2021, Anderson directed Drake’s Organic Spirits staff to book approximately $2.6 million in sham sales. To accomplish these sham sales, Anderson allegedly utilized bank accounts in the names of BBFY USA and another Anderson d/b/a entity to transfer funds to Drake’s Organic Spirits. In a series of alleged round-trip transactions, Anderson then transferred approximately the same amount from Drake’s Organic Spirits to Captain Drake. The complaint alleges that between February and December 2022, using offering documents that included the 2021 sham sales, Drake’s Organic Spirits and Anderson raised approximately $1.5 million from investors in an offering of convertible debt. The complaint further alleges that, in 2022, Anderson again directed Drake’s Organic Spirits staff to book approximately $391,000 in sham sales and between approximately February and March 2023, using offering documents that included the false 2022 sales, Drake’s Organic Spirits and Anderson raised more than $900,000 from investors in a rights offering for preferred stock.
The SEC’s complaint charges Anderson with violating the antifraud provisions of Sections 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint charges BBFY USA and Captain Drake with violating the antifraud provisions of Sections 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder. The SEC seeks permanent injunctions and civil penalties against all defendants and a conduct-based injunction against Anderson, barring him from participating in the issuance, purchase, offer, or sale of any security, except for purchases or sales for his own personal accounts.
The SEC’s investigation was conducted by Emily Scruggs and Kimberly Steckling and supervised by Ian Karpel and Nicholas Heinke, all of the SEC’s Denver Regional Office. The litigation will be led by Zachary Carlyle and supervised by Gregory Kasper.
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