Arizona Man to Pay $500K To Settle SEC Fraud Charges
James P. Toner will pay over $500K to settle charges accusing him of taking investors’ money. The Arizona man claimed to be a real estate manager and allegedly told investors that he would be personally managing three real estate ventures in which they were buying interests. The stated purpose of every investor’s offering was to buy a residential property in the Phoenix area. The property was to be renovated and then sold at a profit.
According to the SEC’s securities fraud complaint, Toner raised at least $915K from 18 investors from mid-’13 through ’14. The investors lost about $682K. Toner is accused of misappropriating about $51K of investor money that he purportedly tried to hide through bank account transfers. (The regulator’s complaint stated that Toner was paid $31K in undisclosed management fees even though he never actually managed the offerings, and that he flat-out stole $20K from an investor.)
Toner also purportedly did not perform any due diligence when he entrusted a real estate broker to manage the investments. This broker was later sent to jail for other crimes.
Toner allegedly told investors that he also would be personally investing in the projects even though he never put in any money of his own. He is accused of falsely stating that his compensation would come either only out of his capital contributions in the investments or after investors had received their profits. To get around registration requirements, he allegedly told certain investors to falsely identify themselves as accredited investors.
Fuel Cell Company Must Answer to SEC Claims of Securities Fraud
The US Securities and Exchange Commission is accusing Terminus Energy Inc. of defrauding investors. The regulator wants disgorgement of ill-gotten gains and interest, as well as penalties.
According to the regulator, the California-based stock company and four of its officers misled investors about their business, which supposedly involved making fuel cells and other power generation products. They raised about $7.9M from investors.
The SEC contends that Terminus and the four individuals touted a viable prototype that could be sold and make revenue when, in fact, Terminus lacked the fuel cell technology or funding to back up their claims. Meantime, the corporate executives were using investor funds for themselves.
Also, investors were not notified that George Doumanis, the operations manager of Terminus, was a convicted felon who previously went to jail for securities fraud and was barred from taking part in penny stock offerings. A Terminus board of directors’ member, Emanuel Pantelakis, had been permanently barred from the securities industry by FINRA.
Terminus is accused of using unregistered brokers to sell securities and paying them twice as much in commissions than what investors were told in offering documents that they would be paid. For example, Joseph Alborano, who also faces SEC charges, received over $1M in compensations for the investments that he sold and solicited.
Meantime, prosecutors in New York have brought a parallel criminal case against Doumanis, Pantelakis, and Terminus CEO Danny Pratte. Ex-terminus president Joseph L. Pittera is also charged in the SEC case.