UNITED STATES OF AMERICA

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 99688 / March 7, 2024

ADMINISTRATIVE PROCEEDING

File No. 3-20393

In the Matter of

Momentus, Inc., Stable Road

Acquisition Corp., SRC-NI

Holdings, LLC, and Brian Kabot,

Respondents.

I.

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ORDER APPROVING PLAN OF

DISTRIBUTION

OVERVIEW

On July 13, 2021, the Commission issued an Order Instituting Cease-and-Desist Proceedings,

Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act

of 1934, Making Findings, and Imposing a Cease-and-Desist Order (the “Order”)1 against Momentus,

Inc. (“Momentus”), Stable Road Acquisition Corp. (“Stable Road”),2 SRC-NI Holdings, LLC (“SRCNI”), and Brian Kabot (“Kabot”) (collectively, the “Respondents”). In the Order, the Commission

found that Momentus, a privately held space company that aspires to provide space infrastructure

services, and its former Chief Executive Officer (“CEO”) Mikhail Kokorich (“Kokorich”), made

materially false statements, omitted to state material facts, and engaged in other deceptive conduct as

Momentus sought to go public through a business combination with Stable Road, a publicly traded

special-purpose acquisition company (“SPAC”). Specifically, the Commission found that Momentus’

business plans and multi-billion-dollar revenue projections, as provided to investors and described in

Stable Road’s Form S-4 registration statement/proxy statement filed in connection with the anticipated

merger, were materially false and misleading.

According to the Order, Stable Road also engaged in negligent misconduct by repeating and

disseminating Momentus’ misrepresentations in Commission filings without a reasonable basis in fact

and its due diligence failures compounded Momentus’ and Kokorich’s misrepresentations and

omissions, resulting in the dissemination of materially false and misleading information to investors.

Additionally, the Commission found that Kabot, Stable Road’s CEO, who signed Commission filings

that included misrepresentations about Momentus’ technology and national security risks, caused

Stable Road’s disclosure violations. According to the Order, Stable Road’s public filings, including

registration statements signed by Kabot that incorporated Momentus’ and Kokorich’s false and

1

Securities Act Rel. No. 10955 (July 13, 2021).

The short cite of (“SRAC”) used to refer to Stable Road Acquisition Corp. has been changed to “Stable Road” in the

Plan.

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misleading claims, caused investors to be misled about material aspects of Momentus’ business. The

Commission further found that Kabot was a managing member of Stable Road’s sponsor, SRC-NI, and

his conduct as described in the Order, was also attributable to SRC-NI.

The Commission ordered the Respondents to pay a collective total of $8,040,000.00 in civil

money penalties to the Commission. The Commission also created a Fair Fund, pursuant to Section

308(a) of the Sarbanes-Oxley Act of 2002, so the penalties collected can be distributed to harmed

investors (the “Fair Fund”). The Respondents have paid in full. The Fair Fund has been deposited in a

Commission-designated account at the United States Department of the Treasury, and any accrued

interest will be added to the Fair Fund.

On February 24, 2023, the Division of Enforcement (the “Division”), pursuant to delegated

authority, appointed Epiq Class Action & Claims Solutions, Inc. as the fund administrator of the Fair

Fund and set the administrator’s bond at $8,040,000.00.3

On June 27, 2023, the Division, pursuant to delegated authority, published a Notice of

Proposed Plan of Distribution and Opportunity for Comment (“Notice”),4 pursuant to Rule 1103 of the

Commission’s Rules on Fair Fund and Disgorgement Plans (the “Commission’s Rules”).5 The Notice

advised all interested persons that they may obtain a copy of the proposed plan of distribution

(“Proposed Plan”) from the Commission’s public website at

http://www.sec.gov/litigation/fairfundlist.htm or by submitting a written request to Noel Gittens,

United States Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-5876.

All persons who desired to comment on the Proposed Plan could submit their comments, in writing, no

later than July 27, 2023. The Commission received one public comment during the comment period

(the “Comment Letter”).

After considering the Comment Letter received on the Proposed Plan, the Commission staff,

recommends that the Proposed Plan be approved without modification.

After careful consideration, the Commission concludes that the Proposed Plan should be

approved without modification.

I.

A.

Public Comment on the Proposed Plan

By letter dated July 27, 2023, Chicago Clearing Corporation (“Chicago Clearing”), objected to

paragraph 84 of the Proposed Plan which describe the procedures relating to claims submitted by

Third-Party Filers,6 and to paragraph 18(g), which excludes claim purchasers from the distributions.

See Order Appointing Fund Administrator and Setting Administrator’s Bond Amount, Exchange Act Rel. No. 96981

(Feb. 24, 2023).

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Exchange Act Rel. No. 97801 (June 27, 2023).

5

17 C.F.R. § 201.1103.

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A Third-Party Filer is defined in the Proposed Plan as “a third party, including without limitation a nominee, custodian,

or an intermediary holding in street name, who is authorized to submit and submits a claim(s) on behalf of one or more

Preliminary Claimants.” Proposed Plan, ¶ 30.

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1.

Objection to Paragraph 18(g)

Chicago Clearing objects to paragraph 18(g) of the Proposed Plan, claiming that the exclusion

of claim purchasers could eliminate the opportunity for many harmed investors to benefit from the Fair

Fund sooner than through a distribution. Chicago Clearing requests that paragraph 18(g) be altered to

clearly permit purchasers of claims to be eligible for a distribution from the Fair Fund. The

Commission has previously considered a similar objection and for the reasons set forth in prior orders,

concludes that paragraph 18(g) of the Proposed Plan does not require modification.

By including paragraph 18(g) in the Proposed Plan, the Commission does not take a position on

investors selling their claims. Rather, the Proposed Plan specifies to whom the distribution payment

will be made.

The Commission finds the payment restriction to be fair and reasonable. The purpose of a

Commission plan of distribution is to distribute a fund established for the benefit of harmed investors.

See Section 308(a) of the Sarbanes Oxley Act of 2002 (stating that, in the context of Fair Funds, a fund

is “established for the benefit of victims of” federal securities law violations). The Commission

believes that the best way to ensure that distribution payments are made for the benefit of investors is

to correlate the harm caused by the misconduct underlying its enforcement actions to the specific

investors who suffered the harm, and to compensate those investors for as much of that harm as

possible from the distribution fund.

2.

Objection to Paragraph 84

In its Comment Letter, Chicago Clearing requests that the Proposed Plan be revised to allow

recipients of distribution payments to authorize payments to be made directly to Third-Party Filers.

Chicago Clearing requests that the Proposed Plan be modified to permit Third-Party Filers to deduct

their own compensation from distribution payments before remitting these payments to the harmed

investors for whom the distributions are intended. Chicago Clearing requests these changes to

facilitate payment for its services, claiming alternative methods of payment to be “extremely difficult,

if not impossible.” Chicago Clearing asserts that Third-Party Filers help to maximize participation in

distributions, and that retail investor participation in Commission’s distributions will decrease if ThirdParty Filers do not participate due to the restrictions on their ability to offset their fees under the

current provisions of the Proposed Plan. Chicago Clearing further states that its clients

“overwhelmingly prefer” to pay for Chicago Clearing’s third-party filing services through contingency

fee arrangements.7

The Commission has considered these comments and, for the same reasons set forth in prior

orders approving the substance of the paragraph at issue, has determined that the requirements of

paragraph 84 are necessary to protect the Fair Fund. See In the Matter of Bayerische Motoren Werke

Aktiengesellschaft, et al., Exchange Act Rel. No. 99016 (Nov. 22, 2023); In the Matter of Baxter

International Inc., et al, Exchange Act Rel. No. 97208 (Sept. 25, 2023); see also In the Matter of

MagnaChip Semiconductor Corporation, et al., Exchange Act Rel. No. 97470 (May 10, 2023) (finding

plan provisions precluding the sending of payments to Third-Party Filers and the offset of Third-Party

Filer compensation from distribution payments to be appropriate as a “means to protect the integrity of

Commission distributions”); see also In the Matter of The Kraft Heinz Co., et al., Exchange Act Rel.

No. 96578 (Dec. 23, 2022) (finding plan provisions precluding the sending of payments to Third-Party

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Comment Letter, p. 3. The Comment Letter is accessible at https://www.sec.gov/comments/3-20393-494462.pdf.

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Filers and the offset of Third-Party Filer compensation from distribution payments to be “necessary to

reduce risks to the Commission’s distribution program and to harmed investors”); see also In the

Matter of Wells Fargo & Company, Exchange Act Rel. No. 90898 (Jan. 11, 2021) (approving the plan

without modification, observing that provision directing payments to harmed investors as opposed to

Third-Party Filers also allows alternative payment arrangements upon Commission staff consultation

and harmed investor authorization, and finding the preclusion of offsets of Third-Party Filer

compensation from distribution payments to be appropriate as a “means to protect the integrity of

Commission distributions” that “will not significantly restrict distribution participation”).

Accordingly, the Commission finds paragraph 84 of the Proposed Plan to be fair and reasonable and

approves its inclusion without modification.

B.

Approval of the Proposed Plan

For the reasons stated above, the Commission finds that the Proposed Plan is fair and

reasonable and should be approved without modification.

II.

Accordingly, it is hereby ORDERED, pursuant to Rule 1104 of the Commission’s Rules,8 that

the Proposed Plan is approved, and the approved Plan of Distribution shall be posted simultaneously

with this order on the Commission’s website at www.sec.gov.

By the Commission.

Vanessa A. Countryman

Secretary

8

17 C.F.R. § 201.1104.

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