SEC Charges Two Florida Men With Defrauding Investors in Purported Television Network
The Securities and Exchange Commission today announced charges against two Florida men for defrauding investors in a purported startup television network and production company by providing false information about its revenues and future prospects, including that former basketball star Michael Jordan planned to invest in the company. The SEC alleges that Vision Broadcast Network’s then-CEO Erick Laszlo Mathe with assistance from consultant Ashif Jiwa raised at least $5.7 million in startup capital from approximately 100 investors nationwide through the sale of the company’s common stock and convertible debentures. Mathe and Jiwa misrepresented to investors that Vision Broadcast owned low-power television…
Read MoreSEC Charges Four Insurance Agents in Securities Fraud Targeting Elderly Investors
The Securities and Exchange Commission today announced charges against four insurance agents for unlawfully selling securities in what turned out to be a multi-million dollar offering fraud targeting elderly investors. The SEC previously charged a Colorado man who allegedly orchestrated the scheme and recruited active insurance agents to help him solicit investors in Colorado and several other states. The scheme raised approximately $4.3 million during a nearly 18-month period. The SEC’s investigation further found that the four insurance agents charged today solicited funds without registering with the SEC as a broker-dealer as required under the federal securities laws. “When individuals…
Read MoreSEC Announces Cases Targeting International Pyramid Scheme Operators
The Securities and Exchange Commission today announced charges against the operators of an international pyramid scheme that raised more than $129 million from investors worldwide, primarily in the U.S., China, and Taiwan. The case follows another against a separate pyramid scheme that lured investors in the U.S., China, and Korea with seminars, webinars, and YouTube videos. The newest case, filed in federal court in San Francisco, charges Hong Kong-based eAdGear Holdings Limited and California-based eAdGear, Inc., along with operators Charles S. Wang and Qian Cathy Zhang, of Warren, N.J., and Francis Y. Yuen, of Dublin, Calif. According to the SEC…
Read MoreSEC Charges Arizona-Based Software Company for Inadequate Internal Accounting Controls Over Its Financial Reporting
The Securities and Exchange Commission today sanctioned a Scottsdale, Ariz.-based software company for having inadequate internal accounting controls over its financial reporting, which resulted in misstated revenues in public filings. An SEC investigation found that JDA Software Group Inc. failed to properly recognize and report revenue from certain software license agreements it sold to customers because its internal accounting controls failed to consider information needed for determining a critical component of revenue recognition for software companies. If companies are unable to demonstrate this component – known as vendor specific objective evidence of fair value (VSOE) – when determining the fair…
Read MoreSEC Suspends Trading in Nine Penny Stocks in Ongoing Initiative to Combat Microcap Fraud
The Securities and Exchange Commission today announced suspensions in trading for nine different penny stocks as part of an ongoing enforcement initiative to combat microcap fraud. Trading suspensions provide the SEC with a means to immediately neutralize potential threats to investors when questions have arisen pertaining to the accuracy and adequacy of information about publicly traded companies. Under the federal securities laws, the SEC can suspend trading in a stock for 10 days and generally prohibit a broker-dealer from soliciting investors to buy or sell the stock again until certain reporting requirements are met. More information about the trading suspension…
Read More