Florida Man Implicated in Scam Involving Black Check Companies’ StocksThe U.S. Securities and Exchange Commission has filed civil fraud charges against Sheldon R. Rose. The Florida man established over a dozen blank check companies, which the SEC contends are worthless and have no operations despite that they are registered to sell stock.According to the regulator, Rose appointed relatives and friends as figurehead officers and shareholders but concealed that he was the one controlling the entities and their securities. Although corporate filings made it seem as if the companies were legitimate startups, the SEC contends that this was only so that reverse mergers could be conducted, the securities could be sold, and Rose and others could profit illicitly.In addition to settling the civil charges, Rose is barred from engaging in penny stock offerings in the future or working as a director/officer of a public company. He also faces criminal charges.Rose’s civil case is connected to the one that the SEC filed last year against 10 individuals in a penny stock scam involving blank check companies headed for reverse mergers.
SEC Pursues Case Involving Illegal Stock Sales of a Marijuana-Related CompanyFusion Pharm, William J. Sears, his brother-in-law Scott Dittman, and Cliffe R. Bodden have settled SEC charges accusing them of their roles in an illegal stock sale scam involving a company that manufactures containers for growing pot. The regulator said that Sears and Boden engineered the securities fraud. Dittman was Fusion Pharm CEO and its only officer.The two men hired Bodden to allegedly help them generate fraudulent documents that allowed the marijuana container maker to put out common stock to three companies that Sears controlled.Sears then allegedly moved part of the illegal proceeds back to Fusion Pharm so the funds could be (falsely) reported as revenue. Investors were notified through financial reports and press releases that this “revenue” was from product sales.The three men, Fusion Pharm, and three of Sears’s other companies will settle the case through monetary sanctions. They are barred from future penny stock offerings, among other penalties. The U.S. Attorney’s Office for the District of Colorado has brought a criminal case against Dittman and Sears.Empowered Products Inc. CEO and Paid Promoter Accused of Fraudulent Stock PromotionThe SEC is accusing Scott S. Fraser and Nathan Yeung of running fraudulent promotional campaigns to sell company stock. Fraser is the CEO of Empowered Products Inc., a sexual health products retailer, and a major shareholder in the company. Yeung is a promoter whom he hired.According to the Commission, Fraser, who also ran a newsletter publishing business, retained Yeung to help him promote Empowered Products via online news articles that were supposedly written by independent writers. They then hired other promoters to distribute the promotions to different subscriber lists and paid for the listings. The promotions, however, did not disclose that Fraser and his company had paid for and approved the ads. The SEC said that such a failure to disclose creates a false impression to investors that the recommendation is unbiased.
Even if the SEC is pursuing a civil case, you want an experienced securities law firm representing you and your claims. Contact Shepherd Smith Edwards and Kantas, LTD LLP today.
Marijuana-Related Company Charged with Scheming Investors, SEC, September 16, 2016