SEC v. Nicholas H. Shermeta and Napa Properties, LLC (2016)

Settled

Checked against the primary document on October 3, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, with sampled and disputed records read a second time. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

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In October 2016 the SEC settled administrative proceedings against Minnesota stockbroker Nicholas Shermeta and his firm Napa Properties for brokering Dakota Plains stock sales through the unregistered firm instead of his employer, with $75,000 disgorgement, $11,075.49 interest and a $50,000 penalty, plus a three-year securities industry bar.

The record

Structured fields for this action, as recorded in our case library.
Agency	SEC
Release number	LR-23680
Date filed	2016-11-01
Date resolved	2016-11-01
Status	settled
Asset class	equities
Criminal parallel	No
Bars imposed	securities industry bar
Defendants	Nicholas H. Shermeta (individual) ; Napa Properties, LLC (entity)
Cited as charged or alleged	Exchange Act s.10(b) and Rule 10b-5 ; Exchange Act s.13(d) and 13(g) ; Exchange Act s.16(a) ; Securities Act s.17(a) ; Securities Act s.5 (statutes and rules cited in the document; not a finding that they were violated)
Techniques

What was ordered

Civil penalty: $50k
Disgorgement: $75k
Prejudgment interest: $11.1k
Total relief: $136k
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 announced on November 1, 2016 (litigation release 23680) the settled administrative order against Shermeta and Napa Properties, issued October 31, 2016 as proceeding 3-17652, alongside a federal complaint against others in the Dakota Plains matter.

The release says Shermeta solicited investors for Dakota Plains and recommended the stock to clients of the registered brokerage where he worked, but brokered the sales through his unregistered firm. Without admitting or denying the findings, he and Napa agreed to a cease-and-desist order as to Section 15(a) of the Exchange Act, to pay $75,000 disgorgement, $11,075.49 interest and a $50,000 penalty, and to a securities industry bar with a right to apply after three years.

The release also describes the wider case against Ryan Gilbertson and Michael Reger, in which a reverse merger is part of the background. Shermeta's own conduct is acting as an unregistered broker, so the reverse-merger tag is removed. The record had shown $6.5 million disgorgement, which is Reger's figure, and a district-court venue that belongs to the other defendants.

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.

Timeline

2016-11-01 Litigation release published

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 litigation release

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.

Record added September 10, 2026. submit a correction.