Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—S.D.N.Y.: SEC charges individual with defrauding Napster out of 239 million shares, (Jun 17, 2026)
Organizations Mentioned:Beacon Heart, LLC | Heart of Humanity, LLC | Infinite Realty Inc. | Napster. | and Avranoc, LLC
The individual received the shares based on a false promise to invest more than $3 billion in the company.
The SEC charged a North Carolina-based individual with defrauding Infinite Realty Inc., now known as Napster, out of 239 million shares by promising a significant investment in the company which he never made. His attorney, who helped forge documents and falsify the investor’s net worth, was also charged. In a parallel action, the DOJ brought criminal charges against the individual (SEC v. Cole, No. 1:26-cv-04945 (S.D.N.Y. filed June 11, 2026)).
False promise. The SEC alleged that the individual, who controls Beacon Heart, LLC, Heart of Humanity, LLC, and Avranoc, LLC, promised to invest $3.36 billion in Infinite Reality and, together with his attorney, falsely told the company that he and/or Avranoc controlled at least $55 billion in assets.
Based on the individual’s promises, Infinite Reality issued 25 percent of its shares to him, Beacon Heart, and Heart of Humanity in 2024 and 2025. According to the complaint, the company never received any money from the individual.
The SEC further alleged that after obtaining the Infinite Reality shares, the individual pledged nearly 45 million of those shares to obtain a $1 million loan from a third-party lender. According to the Commission, the attorney forged documents purporting to verify the individual’s assets and made misleading assurances to the lender in connection with the loan. The SEC claimed that the individual benefitted from his fraud by retaining at least $552,800 of the $1 million loan.
Violations. The SEC charged the individual with violating the antifraud provisions of 1933 Act Section 17(a) and 1934 Act Section 10(b) and Rule 10b-5. The attorney was charged with Section 17(a)(1) and (3) and Section 10(b) Rule 10b-5 violations, as well as with aiding and abetting the individual.
The SEC is seeking permanent injunctions and disgorgement with prejudgment interest on a joint and several basis against the individual and the entities that he controls. The Commission also is seeking a conduct-based injunction against the individual.
The case is No. 1:26-cv-04945.
Attorneys: Alfred A. Day for the SEC.
Companies: Infinite Realty Inc.; Beacon Heart, LLC; Heart of Humanity, LLC; and Avranoc, LLC; Napster.
LitigationEnforcement: FraudManipulation GCNNews