The penny stock world can be rough. So rough that breaking the rules in that corner of the securities markets ban bring its own kind of injunction, one that’s much more specific than the typical don’t-break-the-law-anymore kind of injunction that the SEC usually doles out. What happens is that those found liable for misconduct while “participating . . . in an offering of any penny stock” can be subject to a bar against participating in an offering of penny stock. Or, a penny stock bar.

And if you’re subject to a permanent penny stock bar, the SEC means it. You can’t, say, wait ten years after the bar is imposed and then jump back into penny stock offerings like nothing ever happened. It’s all right there in Section 15(b)(6)(B) of the Exchange Act. But it’s even worse than that. Because if you are subject to a penny stock bar, you’d better not even try to get back in that game.

Steven Wise can tell you all about it. Wise was subject to a 2005 penny stock bar entered to resolve a previous SEC enforcement action, In re Steven Wise, Exchange Act Rel. No. 51077 (Jan. 25, 2005). The SEC now claims in a case filed in the Southern District of New York on June 2nd that a decade later, Wise solicited several private companies to issue publicly trading shares, pitched the offerings to a New York-based hedge fund, and helped the private companies prepare to offer the shares to the public. Importantly for purposes of this post, the SEC’s litigation release says, “None of Wise’s efforts in 2015 resulted in a public offering.”

Now, a reasonable person might think that if a public offering never happened, one could not be liable for participating in the non-existent offering. But au contraire, mon frere! Because Section 15(b)(6)(C) says that “participating in a penny stock offering” includes “inducing or attempting to induce the purchase or sale of any penny stock.” So if you’re subject to a penny stock bar, and and are terrible at making penny stock offerings happen, even your flailing, ineffectual efforts could put you in the recidivist box, where Wise now is.

Wise is neither admitting nor denying the allegations, but he’s paying a $20,000 penalty to resolve them. Be careful out there.