Initial Decision Release No. 1155

Administrative Proceeding

File Nos. 3-17984 to 17989

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

In the Matter of the Registration 

Statement of

Canso Enterprises Ltd.,

Privoz,

Universal Movers Corp.,

Lorilay Corp.,

Formous Corp., and 

Lion Print Corp.

Initial Decision on Default

July 26, 2017

Appearance: Britt Whitesell Biles for the Division of Enforcement,

Securities and Exchange Commission

Before: Brenda P. Murray, Chief Administrative Law Judge

The issue in this proceeding is whether the effectiveness of the 

registration statements of six companies, only one of which the Commission’s 

public files show became effective, should be suspended. 

Background

On May 12, 2017, the Securities and Exchange Commission issued six 

orders instituting proceedings (OIPs) pursuant to Section 8(d) of the 

Securities Act of 1933. The OIPs allege that the registration statements of 

Respondent Canso Enterprises Ltd. and Respondent Privoz contain material 

misstatements and omissions and that Respondent Universal Movers Corp., 

Respondent Lorilay Corp., Respondent Formous Corp., and Respondent Lion 

Print Corp. failed to cooperate with the Commission’s investigation under 

Section 8(e) of the Securities Act. The OIPs ordered a public hearing to 

determine whether a stop order suspending the effectiveness of Respondents’ 

registration statements should be imposed. The six proceedings were 
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consolidated for hearing. Canso Enters. Ltd., Admin. Proc. Rulings Release 

No. 4798, 2017 SEC LEXIS 1418 (ALJ May 15, 2017).

Each Respondent was served with the OIP by May 16, 2017.

Respondents did not answer the OIP or appear at the hearing on June 1, 

2017. Canso Enters. Ltd., Admin. Proc. Rulings Release No. 4814, 2017 SEC 

LEXIS 1469 (ALJ May 19, 2017); Admin. Proc. Rulings Release No. 4846, 

2017 SEC LEXIS 1611 (ALJ June 2, 2017). I allowed into evidence the sworn 

investigative testimony of James Burns and Mark Milman, and the 

declaration of Marlee Engel. Tr. 9-10, 72; 17 C.F.R. §§ 201.235(a), (b). The 

Division of Enforcement presented three witnesses—Brian Vann, Rogerio 

Morais, and Alevtina Michina—and introduced seventy-nine exhibits. I take 

official notice of Respondents’ EDGAR filings. 17 C.F.R. § 201.323. 

The Division filed its Findings of Fact and Conclusions of Law on June 

29, 2017.

Findings of Fact

Respondents are in default for failing to file an answer, appear at the 

hearing, or otherwise defend the proceeding. 17 C.F.R. §§ 201.155(a), .220(f), 

.310. I applied preponderance of the evidence as the standard of proof for 

factual findings beyond the allegations of the OIPs, the allegations of which 

are deemed to be true pursuant to Rule of Practice 155(a).1 17 C.F.R. 

§ 201.155(a); see Steadman v. SEC, 450 U.S. 91, 101-04 (1981). 

These stop-order proceedings arose from an investigation of potential 

misstatements and omissions in registration statements of various companies, 

including the Respondents. Tr. 13-16; Div. Ex. 1. The Commission initiated 

this investigation on April 23, 2014, based on a referral from the Division of 

Corporation Finance. Tr. 14. Corporation Finance and the Office of 

International Affairs assisted the Division’s investigation. Tr. 17. Vann and 

Brian Fitzsimmons, both senior counsel with the Division, led the 

investigation. Tr. 8, 16. 

Attorney Thomas E. Puzzo of Seattle, Washington, represented all the 

Respondents in their Form S-1, Registration Statement Under the Securities 

Act of 1933, filings.2 Tr. 7, 15, 45, 52; Div. Exs. 2-8; Div. Ex. 76 at 9-10; Div. 

 

1 Based on the Division’s concession, I do not deem as true the allegations 

in paragraphs 7 and 8 of the Lorilay Corp. OIP. See Tr. 9.

2 Form S-1 is for the registration of securities of registrants for which no 

other form is authorized or prescribed. 17 C.F.R. § 239.11. Generally, these 

are registrants that have never filed reports under the Exchange Act or have 

(continued...)
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Ex. 77 at 42. All respondents were incorporated in the state of Nevada, where 

their status has been revoked. Div. Exs. 85-90. Each registration statement 

describes the respondent as a “development stage” or “exploration stage” 

company. Tr. 19, 28; Div. Ex. 93 at 5; Div. Ex. 96 at 3; Div. Ex. 98 at 6; Div. 

Ex. 101 at 3; Div. Ex. 103 at 6; Div. Ex. 104 at 3.

Only one Respondent—Universal Movers—had its registration statement

declared effective, and except for one quarterly report it has not filed the 

periodic reports required by Section 13(a) of the Securities Exchange Act of 

1934 and Exchange Act Rules 13a-1 and 13a-13.3 Tr. 19; Div. Ex. 1 at 2. 

There is no indication that the registration statements of the other 

Respondents became effective, and on April 23, 2014, the Division notified 

Respondents that no action would be taken on their registration statements

while a Section 8(e) examination was pending.4 Div. Exs. 2-8.

False and misleading information and omissions

Canso Enterprises Ltd., incorporated in Nevada on June 26, 2013, and 

headquartered in Mexico City, Mexico, was purportedly formed for the 

purpose of acquiring, exploring, and, if warranted and feasible, developing 

natural resource properties. OIP at 1-2; Div. Ex. 20; Div. Ex. 101 at 3-4.

Burns has been Canso’s president, secretary, treasurer, sole employee, and 

one of two board members since its inception.5 Div. Ex. 99 at 18; Div. Ex. 76 

at 37. Burns described his job responsibilities as “[g]enerally, everything” at 

Canso. Div. Ex. 76 at 34-35. Canso has no revenue and has never sold shares 

to the public. OIP at 2.

On January 31, 2014, Canso filed a Form S-1 registration statement, 

amended on March 17, 2014, and April 7, 2014, seeking to register the offer 

 

been filing for less than one year. A.A. Sommer, Jr., Federal Securities Act of 

1933, § 7.01 (LEXIS 2017). Form S-1 requires more extensive disclosure than 

other registration forms, which are used by reporting companies. Id.

3 On February 12, 2014, Universal Movers filed a Form 10-Q for the 

quarter ended December 31, 2013. Universal Movers Corporation, Quarterly 

Report (Form 10-Q) (Feb. 12, 2014).

4 A company cannot sell securities covered by the registration statement 

while a Section 8(e) examination is pending. 15 U.S.C. § 77e(c). 

5 The other board member, German Martinez, is a friend of Burns who 

was willing to invest $5,000. Div. Ex. 76 at 36-37. Martinez, who lives in 

Mexico, does no work for the company. Id. at 17, 37.
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and sale of 1,650,000 common shares in a $247,500 public offering (together, 

registration statement). Div. Ex. 99 at i; Div. Ex. 100 at i; Div. Ex. 101 at i.

Soon after the investigation began, the Division notified Puzzo that it 

wanted to take testimony from Burns. Div. Ex. 55. Vann took Burns’s sworn 

testimony on August 4, 2014. Div. Ex. 76. Burns testified that forming Canso 

was his idea; he had worked in the diamond mining industry and traded 

Canadian penny stocks; and he and the other board member each invested 

$5,000 in Canso. Id. at 25, 27, 30, 37, 51. Canso did not have a bank account 

and used Puzzo’s trust account. Id. at 20. Canso’s address in the registration 

statement was a hotel room in Mexico City, Mexico, where Burns resided 

from December 2013 to May 2014. Id. at 15, 18. When Burns’s testimony was 

taken, Canso did not have a current address and Burns had a post office box 

in Toronto, Canada. Div. Ex. 76 at 18-19.

Canso’s registration statement represented that Canso has “a 100% 

undivided interest [in] the Arrow River property located in the Thunder Bay 

Mining District of the Providence Ontario, Canada,” and is “currently 

conducting mineral exploration activities” on that property. Div. Ex. 101 at 

18. The registration statement identified by name thirty-nine persons as 

existing shareholders of a total of 1,650,000 shares. Id. at 12-13. Vann 

testified that the Division’s investigation revealed that the assertion that 

Canso is conducting mineral exploration activities and the list of purported 

shareholders are untrue statements of material facts and the registration 

statement omits to state material facts necessary to make the statements 

contained therein not misleading. Tr. 37-38, 43; see OIP at 2.

Burns admitted during the examination that the registration statement 

was incorrect because no work was being done on the Arrow River property

and neither he nor anyone on behalf of Canso had ever visited the property.

Tr. 39-40; Div. Ex. 76 at 40, 65-67. The extent of Canso’s interaction with the 

Arrow River property was hiring a company who arranged for a prospector to 

stake out four claims on public lands in Ontario. Div. Ex. 76 at 37-40. Claims 

cost $100 to $400 per unit and are good for two years. They can be renewed 

but there is a minimum work requirement each year. Id. at 40-42. Burns 

acknowledged that a potential investor would consider it important to know 

whether the company was actually conducting exploration activities. Id. at 

66.

The Division concluded that the purported shareholders did not exist.

Canso produced a document with addresses for the thirty-nine shareholders 

listed in the registration statement; they allegedly lived in the Toronto area.

Tr. 41; Div. Ex. 50 at 2. The Commission is a signatory to the International 

Organization of Securities Commissions’ Multinational Memorandum of 

Understanding, which allowed the Office of International Affairs to request 
5

assistance from the Ontario Securities Commission in locating the thirty-nine 

individuals. Div. Ex. 49 at 1; Div. Ex. 50. The Ontario Securities Commission 

conducted land registry searches for the addresses and the home owners did 

not match any of the thirty-nine shareholder names. Tr. 41-42; Div. Ex. 49 at 

2. The Ontario Securities Commission opined that the names were likely 

fictitious. Tr. 43; Div. Ex. 49 at 2. The Division’s own searches in the many 

databases it has available did not locate any of the shareholders, and it found 

no records of any shares being sold. Tr. 20, 43. The Division ultimately found 

Canso’s claim to have thirty-nine shareholders to be false. Tr. 41.

Canso did not respond to a Wells notice that pointed out to it the false 

and misleading information in the registration statement.6 Tr. 43; Div. Ex. 

78.

Privoz was incorporated in Nevada on November 22, 2013, and is 

headquartered in Holon, Israel. Div. Ex. 24; Div. Ex. 94 at 3. On January 28, 

2014, Privoz filed a Form S-1 registration statement, amended on March 18,

2014, and April 22, 2014, seeking to register the offer and sale of 1,650,000 

common shares in a $115,000 public offering (together, registration 

statement). OIP at 1; Div. Ex. 94 at ii; Div. Ex. 95 at ii; Div. Ex. 96 at ii. In its 

registration statement, Privoz claimed to be a shipping-and-receiving 

company formed for the purpose of shipping packages from the United States 

to Israel for Israeli residents. OIP at 1; Div. Ex. 96 at 3.

Privoz’s registration statement includes three untrue statements of 

material fact and omits to state material facts necessary to make the 

statements contained therein not misleading. Tr. 29-36. In the registration 

statement, Privoz represents that it

 

6 The Division’s Enforcement Manual defines a Wells notice as

a communication from the staff to a person involved in an 

investigation that: (1) informs the person the staff has made a 

preliminary determination to recommend that the Commission 

file an action or institute a proceeding against them; (2) 

identifies the securities law violations that the staff has 

preliminarily determined to include in the recommendation; and 

(3) provides notice that the person may make a submission to 

the Division and the Commission concerning the proposed 

recommendation. 

Division of Enforcement, Enforcement Manual (Oct. 28, 2016) at 20, 

https://www.sec.gov/divisions/enforce/enforcementmanual.pdf; see 17 C.F.R. 

§ 202.5(c).
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1. “depend[s] entirely on Mr. Milman,” its sole employee, officer, and 

director, “for all of [its] operations”;

2. “ha[s] entered into two [three-year] contracts with shipping 

companies,” and “shipped to Israel two containers through General 

Container Line and one container through E Z Cargo Inc.”; and

3. “paid $9,000 to General Container Line and $4,000 to E-Z Cargo 

Inc.”

Div. Ex 96 at 6, 22.

Vann testified that 

there was an individual who was associated with Mr. 

Milman named Vladimir Shekhtman, who was in fact 

the individual who was conducting any business on 

behalf of Privoz. To the extent Privoz, had any business, 

it was done by Mr. Shekhtman and not Mr. Milman.

Tr. 29, 32. Vladimir Shekhtman is not mentioned in the registration 

statement. Tr. 32.

The investigation did not reveal any signed contract between Privoz and 

General Container Line or E-Z Cargo and established that neither General 

Container Line nor E-Z Cargo performed any services for Privoz. Tr. 35; OIP 

at 2.

Rogerio O. Morais, who works in the import-export business, was 

employed by General Container Lines in 2014. Tr. 59-60. He told 

investigators and testified at the hearing that Shekhtman was a customer of 

General Container Lines and that Shekhtman’s company, Arkadia

International, shipped automobiles overseas. Tr. 30, 60-61. Morais testified 

that Shekhtman asked him to sign a two-page shipping and service 

agreement with non-specific terms with Privoz, which Morais did. Tr. 63-64; 

Div. Ex. 34. Shekhtman told Morais the contract was pro forma and Privoz 

was a company only on paper.7 Tr. 31, 61, 64; Div. Ex. 34. General Container 

Lines did not perform any service for Privoz, but on approximately three 

occasions Shekhtman had the invoices for services provided to Arkadia

International transferred to Privoz, which was not an unusual occurrence 

among interconnected companies. Tr. 64-65. Morais never dealt with Milman.

Tr. 31.

 

7 Shekhtman’s e-mail transmitting the contract was in Russian, which 

Morais translated. Tr. 63; Div. Ex. 34
7

Alevtina Michina works at E-Z Cargo in customer relations and billing.

Tr. 68-69. Michina’s first language is Russian.8 Michina knew Shekhtman

because he was a client of E-Z Cargo. Tr. 31, 69. Shekhtman asked Michina 

to offer E-Z Cargo’s services to Privoz. Id. She signed and returned a paper 

for a contract but she never received a signed contract from Privoz. Tr. 69. EZ Cargo never provided any services to Privoz. Id. On March 4, 2014, a $4,000 

check was deposited in E-Z Cargo’s bank account. Shekhtman told Michina it 

was a fee for future services, but it was never used. Tr. 70. Michina did not 

know Milman and never spoke with anyone by that name. Tr. 31, 70.

On April 24, 2014, the Division issued a documentary subpoena to 

Privoz, and it notified Puzzo on May 13, 2014, that it wanted to take 

testimony from Mark Milman. Div. Exs. 10, 55. The Division issued a 

testimonial subpoena to Milman on May 16, 2014, and he gave investigative 

testimony on August 27, 2014. Div. Exs. 56, 77. Milman, age eighty-one when 

he gave his investigative testimony, lives in Israel and Ukraine. Div. Ex. 77 

at 17, 77. He came up with the idea for Privoz and arranged for United States 

citizens to establish Privoz’s bank accounts with $10,000 of his funds and to 

create a website, http://www.privoz.us/. Div. Ex. 24; Div. Ex. 77 at 18-36.

Privoz’s address is Milman’s home address in Israel. Milman had Inna 

Shekhtman,

9 who was recommended by persons in the Jewish community in 

Los Angeles, establish United States bank accounts for Privoz. Div. Ex. 77 at 

18-23. He had never met her before entrusting her with the $10,000 

investment. Id. at 22. Milman testified that the $10,000 was about a third of 

his personal funds. Id. at 28. Milman signed Privoz’s articles of incorporation 

as its owner. Div. Ex. 25. Milman got the name Privoz from a huge swap 

market in Kyiv, Ukraine. Div. Ex. 77 at 35. With the assistance of Puzzo, 

Milman received five million shares for $10,000, or $0.002 per share.10 Div. 

Ex. 77 at 45.

 

8 Michina was assisted in communicating with investigators by a 

coworker. Tr. 66-67. At the hearing, Michina testified in Russian and her 

coworker interpreted for her. The interpreter, whose name does not appear in 

the record, was not sworn and no evidence was offered about the interpreter’s 

ability to accurately translate between English and Russian. Nevertheless, 

Michina’s translated testimony was credible and supported by other evidence 

in the record, and I find it admissible under the reliability requirement of 17 

C.F.R. § 201.320. Even if I excluded Michina’s testimony as unreliable, my 

conclusions of law would remain the same.

9 Inna Shekhtman is Vladimir Shekhtman’s daughter.

10 There is no explanation of how Privoz justified offering the shares to the 

public for $0.07 per share on January 28, 2014, when Milman had bought 

(continued...)
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Milman admitted to investigators that: he had never interacted with 

General Container Lines or E-Z Cargo; only Shekhtman had contacted those 

companies; and there had been no shipments. Tr. 33; Div. Ex. 77 at 54, 83, 

85. Milman claimed that he and Puzzo prepared the registration statement, 

however, Milman did not know what items were included in the $5,000 per

month Privoz spent to fund operations or how Privoz intended to spend the 

$63,000 shown as part of its filing plan. Div. Ex. 77 at 69, 72-76; Div. Ex. 96 

at 3.

The Division sent Privoz a Wells notice but received no response and 

Privoz has not amended its S-1 registration statement subsequent to the 

Wells notice to correct the misstatements and omissions identified in the 

notice. Tr. 43-44.

Failure to cooperate in a Securities Act Section 8(d) investigation

Four Respondents—Formous Corp., Lion Print Corp., Lorilay Corp., and 

Universal Movers Corp.—failed to fully cooperate in a Commission 

investigation. Each respondent did not show up to provide investigative 

testimony, failed to respond to Commission staff (staff) inquiries, and became 

unreachable and unresponsive. Tr. 44.

Formous Corp., incorporated in Nevada on July 12, 2013, and 

headquartered in Bishkek, Kyrgyzstan, purportedly plans to engage in the 

business of distributing workwear, such as coveralls and construction jackets. 

Div. Ex. 22; OIP at 1-2. On January 30, 2014, Formous filed a Form S-1 

registration statement, amended April 7, 2014, seeking to register the offer 

and sale of 5,000,000 common shares in a $50,000 public offering (together, 

registration statement). Div. Ex. 97 at 2; Div. Ex. 98 at 2. Nurzada 

Kermalieva was Formous’s sole employee, officer, and director. Div. Ex. 97 at 

26. Formous has no revenue and has never sold shares to the public. Div. Ex. 

97 at 4, 7; OIP at 1-2.

Vann testified that Formous failed to cooperate with a Commission 8(d) 

investigation. Tr. 45-47. On April 24, 2014, the staff issued and properly 

served a document subpoena on Puzzo. Div. Ex. 9; Tr. 46. On May 6, 2014, 

Puzzo informed the staff that he had not yet been authorized to represent 

Formous in the ongoing examination, but that he had e-mailed the subpoena 

to the company. OIP at 2; Div. Exs. 53, 72. Puzzo subsequently informed the 

 

shares about four months earlier for $0.002. Div. Ex. 77 at 22; Div. Ex. 94 at 

16 (“The offering price ... has been determined arbitrarily by us. The price 

does not bear any relationship to our assets, book value, earnings, or other 

established criteria for valuing a privately held company.”).
9

staff that Formous would be submitting documents directly to the staff, 

which it did on May 7, 2014, and that Puzzo was authorized to represent the 

company going forward. Div. Ex. 54; OIP at 2. On May 13, 2014, staff 

informed Puzzo that it intended to take testimony from Kermalieva, and on 

May 16, 2014, the staff properly served a testimony subpoena on Kermalieva

through Puzzo. Tr. 45; OIP at 2; Div. Exs. 55, 56.

From May through August 2014, the staff made numerous unsuccessful 

attempts to schedule taking testimony from Kermalieva. OIP at 2. On August 

19, 2014, Puzzo e-mailed the staff that his attempts to contact Kermalieva 

had been unsuccessful. Tr. 46; OIP at 2; Div. Ex. 57. On May 19, 2016, Puzzo 

informed the staff that he no longer represented Formous. OIP at 2. No 

response was received to the e-mail the Division sent on May 24, 2016, to the 

e-mail address on Formous’s registration statement, urging Kermalieva as 

Formous’s CEO to respond so that the Commission could conclude the 8(e) 

investigation. Tr. 46-47; OIP at 2; Div. Ex. at 58. On July 11, 2016, the 

Division sent a Wells notice via e-mail to the address on the registration 

statement, with copies sent via UPS to Formous’s designated agent for 

service and to Formous’s address in Kyrgyzstan. Div. Ex. 79; OIP at 2.

Formous did not respond to the e-mail, and UPS returned the mailing as 

undeliverable. Tr. 47; OIP at 2. 

Lion Print Corp. is a Nevada corporation headquartered in Lviv, 

Ukraine, that purportedly was formed as a printing company to operate 

primarily in Ukraine. Tr. 52; Div. Ex. 103 at 3. On February 20, 2014, Lion 

Print filed a Form S-1 registration statement, amended April 7, 2014, seeking 

to register the offer and sale of two and a half million common shares in a 

$100,000 public offering (together, the registration statement). Div. Ex. 102 

at i, iii; Div. Ex. 103 at i, iii; OIP at 1. Liliia Yasinska was Lion Print’s sole 

officer and director. Div. Ex. 61; Div. Ex. 103 at 3. Lion Print has no revenue 

and has never sold shares to the public. OIP at 1; Div. Ex. 103 at 7.

On April 24, 2014, the staff properly served a document subpoena to Lion 

Print through Puzzo, and Lion Print produced responsive documents on May 

8, 2014. Tr. 52; OIP at 2; Div. Ex. 61. The Division notified Puzzo that it 

wanted to take testimony from Yasinska on May 13, 2014. Div. Ex. 55.

Yasinska provided telephonic testimony on August 28, 2014, in response to a 

testimony subpoena served on May 16, 2014; Lion Print’s and Yasinska’s 

cooperation ended in 2015. Tr. 52-53; OIP at 2; Div. Ex. 56.

On March 13, 2015, Puzzo informed the staff that he no longer 

represented Lion Print. OIP at 2. On March 16, 2015, the staff e-mailed Lion 

Print at two different e-mail addresses provided by Yasinska seeking 
10

additional information relevant to its examination. Div. Exs. 63, 67. One email was undeliverable and Lion Print did not respond to the other e-mail.11

Div. Ex. 63; OIP at 2. The staff attempted to call Yasinska on April 1, 2015, 

at the telephone number she had provided, and Vann testified that he 

believes Yasinska answered the telephone in Russian and hung up after the 

staff introduced themselves and stated that they had additional questions 

relevant to the examination. No one answered the phone when the staff 

called back. Tr. 53; OIP at 2.

The staff did not receive a response to e-mails sent to Yasinska on 

September 28, 2015 and May 24, 2016, seeking to arrange a telephone call.

Div. Exs. 65, 67. On June 21, 2016, the staff attempted to call Yasinska at the 

number she had provided, but the number had been disconnected. Tr. 53; OIP 

at 2.

On July 11, 2016, the staff e-mailed a Wells notice to Lion Print at a 

working e-mail address. Div. Ex. 66. The staff also sent the Wells notice via 

UPS to Lion Print’s designated agent for service in the United States and 

directly to Lion Print’s address in Ukraine. The staff did not receive a 

response to its e-mail; the UPS package sent to Ukraine was returned 

without any explanation; and the designated agent refused to accept delivery 

and informed the staff that the company was defunct. Tr. 53; OIP at 2-3.

Lorilay Corp., a Nevada corporation headquartered in Moscow, Russia,

purportedly plans to sell crepes through retail outlets in Russia. Div. Ex. 104

at 1, 20; OIP at 1. On April 17, 2014, Lorilay filed a Form S-1 registration 

statement seeking to register the offer and sale of four million common 

shares in an $80,000 public offering. Div. Ex. 104 at 3; OIP at 1. Elena 

Sheveleva was Lorilay’s president, treasurer, secretary, and director. Div. Ex. 

104 at 28, 29. The company has no revenue and has never sold shares to the 

public. OIP at 1; Div. Ex. 104 at 7-8.

Vann testified that Lorilay failed to cooperate with a Commission 8(e) 

investigation. Tr. 47-52. On April 24, 2014, the staff attempted to serve a 

document subpoena to Lorilay through Puzzo. Div. Ex. 12; Tr. 49. In May 

2014, Puzzo informed the staff that he had not yet been authorized to 

represent Lorilay, but that he had e-mailed the document subpoena to his 

 

11 There appears to be a typographical error in one of the e-mail addresses 

used by the Division in its attempt to reach Yasinska on March 16, 2015, 

which likely explains why Yasinska did not respond. The Division’s March 16 

e-mail was sent to an address ending in “.run.” Div. Ex. 63. In its other 

attempts to reach Yasinska, the Division used the same address except 

ending in “.ru.” Div. Exs. 65-67. 
11

contact at Lorilay. Div. Ex. 73. The staff informed Puzzo on May 13, 2014, 

that it wanted to take testimony from Sheveleva. Div. Ex. 55. The staff did 

not issue a testimony subpoena to Sheveleva on May 16, 2014, because Puzzo 

was still trying to determine whether he represented her. The staff continued 

to try to schedule her testimony with Puzzo, but he stated in e-mails and 

phone calls that he was never able to reach her despite numerous attempts to 

contact her.12 Tr. 48-52; OIP at 2; Div. Exs. 72, 73. Puzzo informed the staff 

on May 19, 2016, that he no longer represented Lorilay, and the staff began 

attempts to communicate with Sheveleva directly. OIP at 2. On May 24, 

2016, the staff e-mailed Lorilay at the address provided in its registration 

statement but did not receive a response. Tr. 50; Div. Ex. 74. On July 11, 

2016, the staff emailed a Wells notice to the same address, but received no 

response. Div. Ex. 75; OIP at 2. Similarly the staff did not receive a response 

to Wells notices it sent via UPS to Lorilay’s designated agent for service in 

the United States and its address in Russia. UPS returned both packages to 

the staff marked undelivered. Div. Ex. 82; OIP at 2.

Universal Movers is a Nevada corporation headquartered in London, 

United Kingdom, that purportedly plans to provide moving and storage 

services. Div. Ex. 91 at 5; OIP at 1-2. On October 25, 2013, Universal Movers 

filed a Form S-1 registration statement, amended November 26, 2013, and 

December 16, 2013, seeking to register the offer and sale of 3,000,000 

common shares in a $60,000 public offering (together, registration 

statement). OIP at 1; Div. Ex. 91 at 2; Div. Ex. 92 at 2; Div. Ex. 93 at 2. The 

registration statement named Shahzad Ahmed as President, CEO, Secretary, 

Treasurer, and Director. Div. Ex. 91 at 41; Tr. 54. The Commission issued a 

notice of effectiveness on December 27, 2013. OIP at 1; see also EDGAR.

Universal Movers has no revenues, no business operations, and no 

publicly sold shares. OIP at 2. Universal Movers describes itself as an 

emerging growth company as defined in the Jumpstart Our Business

Startups Act of 2012. Div. Ex. 91 at 10-11; see Jumpstart Our Business 

Startups Act, Pub. L. No. 112-106, § 101, 126 Stat. 306, 307 (2012) (codified 

at 15 U.S.C. §§ 77b(a)(19), 78c(a)(80)) (adding definition of an “emerging 

growth company”—an issuer with annual gross revenues of less than 

 

12 At the hearing, the Division explained that it would not be presenting 

any evidence in support of the allegations in paragraphs 7 and 8 of the OIP, 

which represented that “[o]n May 13, 2014, the staff contacted company 

counsel and informed him that the staff intended to take testimony from 

Respondent’s [CEO]. . . . On May 16, 2014, the staff properly served a 

testimony subpoena to Respondent’s CEO via company counsel, who resides 

in the United States.” OIP at 2; Tr. 9.
12

$1,000,000,000, adjusted for inflation—to the Securities Act and Exchange 

Act).

On April 24, 2014, the staff issued and properly served on Universal 

Movers a document subpoena. OIP at 2; Div. Ex. 11. The staff received 

material in response to the subpoena on May 7, 2014; Puzzo informed the

staff on May 9, 2014, that he had been authorized to represent Universal 

Movers. Tr. 54; OIP at 2; Div. Ex. 53. On May 13, 2014, the staff informed 

Puzzo that it intended to take testimony from Ahmed, and it properly served 

a testimony subpoena on May 16, 2014. Div. Exs. 55, 56. During the 

subsequent months, the staff attempted to schedule the taking of testimony 

from Ahmed. OIP at 2. 

Puzzo informed the staff in an August 8, 2014, e-mail that Ahmed had 

decided not to provide testimony to the Division. Tr. 55-56; Div. Ex. 71; OIP 

at 2. On May 19, 2016, Puzzo informed the staff that he was no longer 

representing Universal Movers. Tr. 56; OIP at 2. The staff then tried to 

communicate directly with Universal Movers. On May 24, 2016, the staff 

attempted to e-mail Universal Movers directly at the e-mail address provided 

in the company’s S-1 filing, however, the e-mail was returned as 

undeliverable. Tr. 56; Div. Exs. 68, 69. On June 8, 2016, the staff called the 

telephone number that Universal Movers provided in its registration 

statement and was told by the individual who answered the phone that it was 

the wrong number. OIP at 2. 

On July 11, 2016, the staff sent a Wells notice to Universal Movers via 

its designated agent for service in the United States and directly to the 

company’s address in the United Kingdom that appeared on the registration 

statement. Tr. 57; OIP at 2; Div. Ex. 70. On July 20, 2016, the staff received 

an e-mail from an individual in the United Kingdom returning the Wells 

notice and stating that Shahzad Ahmed did not live at that address. Div. Ex. 

70; OIP at 2. On October 13, 2016, the Wells notice sent via UPS package to 

Universal Movers’ domestic registered agent was returned with a note 

stating, “receiver did not want, refused delivery.” OIP at 3. The Division has 

received no communications from Universal Movers. Tr. 57.

Conclusions of Law

Section 8(d) of the Securities Act authorizes the Commission to issue a 

stop order suspending the effectiveness of a registration statement if it 

appears “that the registration statement includes any untrue statement of a 

material fact or omits to state any material fact required to be stated therein 

or necessary to make the statements therein not misleading.” 15 U.S.C. 

§ 77h(d). Section 8(e) of the Securities Act empowers the Commission to 

undertake an examination to determine whether a stop order should issue 
13

under Section 8(d), and makes failure to cooperate with such an examination 

itself “proper ground for the issuance of a stop order.” 15 U.S.C. § 77h(e); see

Blimpie Corp. of Am., Securities Act Release No. 5146, 1971 SEC LEXIS 470, 

at *2 (May 6, 1971) (refusal to cooperate in a Section 8(e) examination 

“constitutes a ground for the issuance of a stop order”).

The purpose of a registration statement is to “protect investors by 

promoting full disclosure of information thought necessary to informed 

investment decisions.” mPhase Techs., Inc., Exchange Act Release No. 74187, 

2015 SEC LEXIS 398, at *22 (Feb. 2, 2015) (quoting SEC v. Ralston Purina 

Co., 346 U.S. 119, 124 (1953)). “Information in a registration statement is 

material when there is a substantial likelihood that a reasonable investor 

would attach importance to it in determining whether to purchase the 

security in question.” Petrofab Int’l, Inc., Securities Act Release No. 6769, 

1988 SEC LEXIS 782, at *16 (Apr. 20, 1988); accord 17 C.F.R. § 230.405

(defining “material”). 

The substantial and undisputed evidence shows that issuance of a stop 

order is appropriate for each Respondent’s filed registration statement 

because each Respondent violated Section 8(d) of the Securities Act by 

misrepresenting and omitting material information in their filed registration 

statement or violated Section 8(e) of the Securities Act by failing to cooperate 

with the Division’s examination. 

Privoz’s registration statement falsely represented that: (1) Milman was 

solely responsible for its activities and it depended entirely on him for its 

operations; (2) Privoz had entered into three-year contracts with two cargo 

shippers to ship customers’ deliveries; and (3) Privoz paid $9,000 to General 

Container Line and $4,000 to E-Z Cargo to ship three containers for 

customers. Vladimir Shekhtman and Inna Shekhtman acted for Privoz by 

attempting or appearing to enter into contracts with shippers and opening 

Privoz’s bank accounts.

13 Vladimir Shekhtman held himself out as a 

 

13 The Division alleges that Privoz’s registration statement was materially 

deficient because it failed to identify Vladimir Shekhtman as a promoter and 

control person. Div. Br. at 18. Rule 405 of Regulation C of the Securities Act

defines “control” as the “possession, direct or indirect, of the power to direct 

or cause the direction of the management and policies of a person, whether 

through the ownership of voting securities, by contract, or otherwise.” 17 

C.F.R. § 230.405. Rule 405 defines “promoter” as including any person, who, 

acting alone or with others, founds or organizes the business of the issuer, or 

who, in connection with the founding or organizing of the issuer, receives in 

consideration of services or property ten percent or more of the issuer’s 

securities. Id. There is not sufficient evidence about Shekhtman’s 

involvement in Privoz to conclude that he meets either definition.
14

representative of Privoz and, to the extent that Privoz had any business 

activities, Shekhtman performed them. Privoz had no contracts with cargo 

shippers, it had not shipped three containers for customers, and it had not 

paid a total of $13,000 to General Container Line and E-Z Cargo.

These false representations were material. A company’s leadership is 

always of importance to investors. SEC v. Husain, No. 2:16-cv-3250, 2017 

U.S. Dist. LEXIS 29131, *21-22 (C.D. Cal. Mar. 1, 2017) (“[A] corporation’s ...

leadership, the nature of its operations, and its plan for the future would 

seem to be[, other than its financials,] the most important pieces of 

information available to an investor.”). It is particularly important when 

investing in an allegedly one-person operation. An investment in Privoz, 

which has few assets, would be an investment in Milman, the person that the 

registration statement asserted Privoz depended on for everything. That 

others had significant roles in conducting Privoz’s business is a fact a 

reasonable investor would want to know before investing. The 

misrepresentations that Privoz entered into multi-year contracts with 

shippers and had shipped three containers were material because they made 

Privoz’s limited operations appear more advanced than they actually were.

The difference between having started operations with long-term contractual 

relationships and having no operations at all is significant and something 

investors would want to know. See Organized Producing Energy Corp., 

Securities Act Release No. 6527, 1984 SEC LEXIS 1649, at *8 (May 1, 1984) 

(finding, in accepting an offer of settlement, that the false representation that 

a company had entered into distribution contracts when it had not was 

material). A stop order is appropriate.

Canso’s registration statement falsely represented that Canso had 

begun mineral exploration operations and that thirty-nine people had Canso 

shares. These representations were material because investors could 

reasonably think that a company that was conducting business activities and 

that had attracted investments from thirty-nine people was a more attractive 

investment than a company with no operations or investors. A stop order 

suspending the effectiveness of Canso’s registration statement should be 

issued.

Formous, Lion Print, Lorilay, and Universal Movers failed to 

cooperate in a Commission investigation by ignoring subpoenas for testimony 

issued by the Division. Despite numerous attempts by the Division to 

communicate with the person designated as the officer or founder or director 

of operations of these four Respondents through their attorney and then 

directly, only Yasinska, an officer and sole director of Lion Print, was willing 

to give investigative testimony on one occasion and then she too refused to 

respond to Division inquiries that were part of the investigation. See Sci. 

Research Dev. Co., Securities Act Release No. 5040, 1970 SEC LEXIS 671, at 
15

*4 (Jan. 26, 1970) (finding that the refusal of the registrant’s president and 

controller to testify pursuant to a subpoena issued under Section 8(e) 

constituted a failure to cooperate and was a basis for a stop order). The 

refusal to cooperate or respond was intentional and stop orders against these 

four Respondents are warranted.

One final issue should be addressed. Section 8(d) authorizes the 

Commission to “issue a stop order suspending the effectiveness of [a] 

registration statement.” 15 U.S.C. § 77h(d). This could be read to apply only 

to registration statements that have become effective, and only Universal 

Movers received a notice of effectiveness. The Commission, however, has 

interpreted Section 8(d) to permit it to suspend registration statements that 

have not yet become effective because to interpret it otherwise “would lead to 

absurd and inequitable results from the point of view of decent 

administration and investor protection.” Red Bank Oil Co., Securities Act 

Release No. 3095, 1945 SEC LEXIS 204 (Oct. 11, 1945) (“We think it utterly 

repugnant to the objectives of the Act to interpret it to require us to sit by 

until a false and misleading registration statement becomes effective before 

commencing action under Section 8(d).”); see William R. McLucas, Stop Order 

Proceedings Under the Securities Act of 1933: A Current Assessment, 40 Bus. 

L. 515, 530-31 (1985) (noting that courts have implicitly upheld the 

Commission’s position). It is appropriate, therefore, to suspend the 

effectiveness of all six Respondents’ registration statements.

Record Certification

Pursuant to Commission Rule of Practice 351(b), 17 C.F.R. § 201.351(b), 

I certify that the record includes the items set forth in the Record Index 

issued by the Secretary of the Commission on July 6, 2017.

Order

Pursuant to Section 8(d) of the Securities Act of 1933, I ORDER that

the effectiveness of the registration statement filed by Canso Enterprises Ltd.

is suspended;

the effectiveness of the registration statement filed by Privoz is suspended;

the effectiveness of the registration statement filed by Universal Movers 

Corp. is suspended 

the effectiveness of the registration statement filed by Lorilay Corp. is 

suspended;

the effectiveness of the registration statement filed by Formous Corp. is 

suspended; and 
16

the effectiveness of the registration statement filed by Lion Print Corp. is 

suspended.

This initial decision shall become effective in accordance with and 

subject to the provisions of Rule 360. See 17 C.F.R. § 201.360. Pursuant to 

that rule, a party may file a petition for review of this initial decision within 

twenty-one days after service of the initial decision. A party may also file a 

motion to correct a manifest error of fact within ten days of the initial 

decision, pursuant to Rule 111. See 17 C.F.R. § 201.111. If a motion to correct 

a manifest error of fact is filed by a party, then a party shall have twenty-one 

days to file a petition for review from the date of the undersigned’s order 

resolving such motion to correct a manifest error of fact. The initial decision

will not become final until the Commission enters an order of finality. The 

Commission will enter an order of finality unless a party files a petition for 

review or motion to correct a manifest error of fact or the Commission 

determines on its own initiative to review the initial decision as to a party. If 

any of these events occurs, the initial decision shall not become final as to 

that party.

In addition, a respondent has the right to file a motion to set aside a 

default within a reasonable time, stating the reasons for the failure to appear 

or defend, and specifying the nature of the proposed defense. 17 C.F.R. 

§ 201.155(b). The Commission can set aside a default at any time for good 

cause. Id.

_______________________________

Brenda P. Murray

Chief Administrative Law Judge