SEC v. Michael L. Reger (undisclosed control blocks, 2016)

Settled

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In October 2016 the SEC settled with Michael Reger, co-founder of Dakota Plains Holdings, finding he secretly controlled the company through figurehead executives and split a 21.4 per cent stake across ten accounts to avoid ownership reporting. He agreed to $6.5 million disgorgement, $669,365.85 interest and a $750,000 penalty.

The record

What was ordered

Civil penalty

$750k

Disgorgement

$6.5m

Prejudgment interest

$669k

Total relief

$7.9m

Alleged gain

—

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

The Securities and Exchange Commission instituted and settled this proceeding on October 31, 2016 (Securities Act release 10241), without admission or denial by Reger.

The order finds that Reger and his partner Ryan Gilbertson named their fathers as figurehead chief executive and president and later installed a friend as CEO, while they made the material decisions, and that none of the private-placement materials disclosed Reger's role or his loans to the company. When Dakota Plains first became public, Reger beneficially owned about 21.4 per cent of its stock but held it across ten accounts in different names to avoid the disclosure requirements of Sections 13(d) and 16(a), and he received lucrative payments. The company's reverse merger is background to those payments, not the violation.

He was ordered to cease and desist from Sections 17(a)(2) and (3) of the Securities Act and Sections 13(d) and 16(a) of the Exchange Act, and to pay disgorgement of $6,500,000, prejudgment interest of $669,365.85 and a $750,000 penalty in three instalments. The record had shown a $250,000 penalty, which is one instalment, and the reverse-merger tag.

This library tags the matter as undisclosed control blocks. The tagging is ours, not the regulator's.

For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the release.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Undisclosed control blocks — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2016-10-31 Administrative proceeding instituted (cease-and-desist)

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEC order

The linked release is a work of the United States government and is not subject to copyright. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added September 10, 2026. submit a correction.