The New Jersey Bureau of Securities: A Shift for the Calculation of Civil Penalties?
February 17, 2026
CK Insights:
The New Jersey Bureau of Securities’ stance on civil penalties dramatically changed over the course of a recent case. CK’s Josh Sherman draws upon his deep experience with regulatory and government securities enforcement matters to consider why respondents and their attorneys must have a strong understanding of the law to assert their best possible negotiation positions and defenses:
In late-2025, the Chief of the New Jersey Bureau of Securities (the “Bureau”) resolved a civil securities fraud enforcement action entitled Platkin v. Bowmo, Inc., Docket No. BER-C-000217-24. The case provides an interesting look at the evolution of the Bureau’s position on the amount of civil monetary penalties it sought from the defendants.
According to the Bureau’s complaint in Bowmo, the case involved one investor whom the defendants allegedly defrauded out of approximately $90,000 in a single transaction. In a letter to the Court dated May 2, 2025, the Bureau initially took the aggressive position that the three defendants faced civil monetary penalties of up to $330,000 each based upon their alleged violations of the New Jersey Uniform Securities Law (“Securities Law”). In addition to seeking penalties, the Bureau also sought restitution and disgorgement from the defendants and a nominal defendant totaling over $90,000.
The Bureau may request civil monetary penalties under Section 49:3-70.1 of the Securities Law. Per this statute, any person who violates the Securities Law is liable for civil penalties payable to the State not to exceed $10,000 for the first violation and $20,000 for each subsequent violation. Although the statute further provides that “one or more violations may occur at the same time or be part of the same conduct or pattern of conduct,” it does not offer more specific guidance about how the Bureau and New Jersey courts should calculate the number of violations and determine the proper amount of penalties in securities enforcement actions.
A prior case brought by the Bureau, In re Burlum1, is instructive as to how the Bureau and courts historically calculated violations and assessed penalties. In Burlum, the Bureau administratively ordered $1,125,000 of civil penalties against the defendants, which was affirmed by the Appellate Division of the Superior Court of New Jersey. In that case, the defendants fraudulently sold $2.8 million of securities to 225 investors over the course of three years, and in doing so committed four statutory violations and violated the Bureau’s Cease and Desist Order by continuing to sell securities during the investigation. The Bureau explained that it arrived at the penalty figure “[i]n light of the number of violations, the duration of the unlawful conduct, the number of impacted investors, the amount of money raised by the illegal sale of the securities, and the egregiousness of [defendants’] conduct.”2 In affirming the Bureau’s assessment of penalties, the court ruled that the penalties “were not disproportionate to defendants’ offenses as to be shocking to one’s sense of fairness, and thus were neither arbitrary, capricious, nor unreasonable.”3
By comparison, in the Bowmo case, the Bureau’s initial request for $330,000 of penalties against each defendant appears to be overly-inflated and not based upon the same factors considered in Burlum. In contrast to the wide-ranging fraud in Burlum, the Bowmo case involved only one investor and a single investment of approximately $90,000, but the Bureau sought penalties more than triple that amount. The Bureau arrived at the $330,000 penalty amount for each defendant by asserting that each one committed a total of six statutory violations penalties (with each defendant’s first violation subject to a $10,000 penalty and second through fifth violations subject to a $20,000 penalty), which adds up to $110,000 for each defendant. The Bureau then apparently assessed the total amount of penalties ($330,000) jointly and severally against each of the three defendants. But the Securities Law does not provide for joint and several liability for penalties, and federal courts have declined to assess joint and several liability for civil penalties in securities cases.4 To the extent that the Bureau was actually seeking to separately assess $330,000 of penalties against each of the three defendants in Bowmo, for a total of $990,000 of penalties, it would amount to a triple penalty, rather than joint and several liability against each defendant. Under the doctrine of joint and several liability, only one defendant can be liable for the full $330,000, and it is unclear how the Bureau ever had the authority to assess a triple penalty, if that is indeed what it sought.
The Bureau’s position on penalties in the Bowmo case significantly softened over time: it ultimately resolved the case for far lesser penalties than the aggressive amounts it sought initially. In October 2025, the Bureau filed two separate consent orders that fully resolved the case with the Bowmo defendants. In settlement, defendants Michael Lakshin and Bowmo, Inc. agreed to a total penalty in the amount of $100,000, which is far more in accord with the Burlum factors than the Bureau’s initial demand. Notably, the Bureau agreed to suspend and not even collect the penalty from Lakshin and Bowmo, Inc.—due to their financial hardship—if they paid $60,000 of restitution to the victim. In other words, so long as these two defendants repaid the victim, they did not have to pay a nickel of penalties to the Bureau. The other defendant, Edward Aizman, resolved the Bureau’s claims against him by agreeing to pay $15,000 of restitution to the victim, without any penalties to the Bureau.
CK’s Takeaway:
Individuals and entities who are being investigated by the New Jersey Bureau of Securities and face potential sanctions require a close understanding of the applicable law and the Bureau’s approach to civil monetary penalties. For more information on CK’s securities law practice, please contact Josh Sherman, author of this post.
1Matter of Burlum, No. A-3316-17T3, 2019 WL 4566889, at *8 (N.J. Super. App. Div. Sept. 20, 2019).
2Id.
3Id.
4See, e.g., SEC v. Pentagon Cap. Mgmt., 725 F.3d 279, 287-88 (2d Cir. 2013).