Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—Officers charged for fraudulent use of Paycheck Protection Program funds, (Jul 14, 2026)
Organizations Mentioned:iSun, Inc.
Three former officers and directors agreed to settle and pay disgorgement and civil penalties.
The SEC charged three former officers and directors of a Vermont-based solar energy company for creating fake payroll accounts to misappropriate $1.49 million in federal funds received through the Paycheck Protection Program (PPP). The three individuals agreed to settle without admitting or denying the charges and will pay disgorgement and civil penalties (In the Matter of Jeffrey Peck, Release No. 34-105884 (July 13, 2026)).
The SEC stated that the solar energy company received the PPP loan in April 2020 whereupon the three individuals devised a plan to increase their own pay. The Commission found that they created fake employment and payroll records for their spouses and paid them using the PPP funds.
Fictitious employment. In 2021 and 2022, the individuals caused the company to make additional payments in connection with their spouses’ fictitious employment, in part to conceal their prior fraud. In total, the SEC’s order found that the company paid the spouses of the three individuals $127,307 between 2020 and 2022.
The SEC alleged that the three individuals defrauded the company and its investors and made material misstatements to investors regarding the PPP loan. They also misrepresented the company’s financial condition and their executive compensation.
In addition, the SEC found that the three individuals falsified the company’s records and circumvented the company’s inadequate internal accounting controls. Finally, the Commission found that they caused the company to violate the laws governing public companies’ maintenance of accurate books and records and their obligation to file accurate reports with the SEC.
Violations. The SEC charged two of the individuals with violations of 1933 Act Section 17(a) and 1934 Act Section 10(b) and Rule 10b-5, as well as 1934 Act 13b2-2 for making false and misleading statements to the company’s external auditor. They also were charged with violating 1934 Act Rule 13a-14 for making false certifications in Commission filings, and Section 13(b)(5) for circumventing the company’s internal accounting controls. The third individual was charged with violating 1933 Act Sections 17(a)(2) and (a)(3).
All three individuals agreed to cease and desist orders and to pay civil penalties, disgorgement, and prejudgment interest. One of the individuals received a permanent officer-and-director bar, and another is barred for five years from serving as an officer and director.
Companies: iSun, Inc.
LitigationEnforcement: DirectorsOfficers FraudManipulation