Company’s Principal Agrees to Settlement Following Fraud Allegations
By Dolores Quintana
The Securities and Exchange Commission (SEC) revealed today that Esos Rings, Inc., along with its principal, Michelle Silverstein, also known as Michelle Silverstein Bisnoff, have reached a settlement regarding allegations of investor fraud. The charges revolved around the sale of Esos stock through deceptive practices related to Esos’s business and the operation of a Ponzi-like scheme.
According to the SEC’s complaint, which was filed in the U.S. District Court for the Central District of California, between February 2017 and June 2022, Esos and Bisnoff unlawfully raised $1.95 million from investors. The complaint asserts that Esos claimed to be engaged in the manufacturing and sale of smart rings and wearable devices functioning as debit cards.
Allegedly, Esos and Bisnoff secured funds from investors using false claims, including ownership of patents for the smart rings and an acquisition by Apple. Additionally, the complaint contends that Esos and Bisnoff operated a Ponzi-like scheme, using new investments to repay earlier investors.
Esos and Bisnoff, while neither admitting nor denying the SEC’s allegations have consented to the entry of final judgments pending court approval. These judgments would permanently prohibit them from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Act of 1934, and Rule 10b-5. They would also make them jointly and severally liable for paying $566,483 in disgorgement and $46,836 in prejudgment interest.
Bisnoff, in addition, agreed to an officer-and-director bar, a $233,229 civil penalty, and a permanent injunction preventing her from participating in the issuance, purchase, offer, or sale of any unregistered security, except for transactions involving securities listed on a national exchange for her personal account.
The SEC’s investigation was conducted by staff from the SEC’s Los Angeles Regional Office.
