SEC Charges Medical Device Company The Eye Machine and Founder Pocklington With Fraud

The Securities and Exchange Commission today charged convicted felon and former NHL team owner Peter H. Pocklington, his medical device company, and others with defrauding investors by hiding Pocklington’s recidivist history and by misappropriating inv…

Joel R. Levin Named Director of Chicago Regional Office

The Securities and Exchange Commission today announced that Joel R. Levin has been named Director of the Chicago Regional Office.  He will join the agency next month.

Mr. Levin is a veteran federal prosecutor who has served in various senior leadershi…

SEC Awards More Than $2.2 Million to Whistleblower Who First Reported Information to Another Federal Agency Before SEC

The Securities and Exchange Commission today announced a whistleblower award of more than $2.2 million to a former company insider whose tips helped the agency open an investigation that led to an enforcement action.  The whistleblower first reported t…

SEC Names Peter Henry as Director of the Office of Equal Employment Opportunity

The Securities and Exchange Commission today announced that Peter Henry has been named Director of the agency’s Office of Equal Employment Opportunity (OEEO).  Mr. Henry joined the SEC as OEEO Deputy Director in 2014, and has been serving as the office…

SEC Warns of Government Impersonators

The Securities and Exchange Commission today issued an Investor Alert warning investors of fraudsters claiming to be SEC employees in an attempt to trick investors into sending money or revealing sensitive account information.  The alert makes clear th…

SEC Promotes Investor Awareness During National Financial Capability Month

As part of National Financial Capability Month, the Securities and Exchange Commission’s Office of Investor Education and Advocacy (OIEA) is encouraging investors to go to Investor.gov to learn about the importance of saving and investing early, and to…

SEC Halts Fraudulent Scheme Involving Unregistered ICO

The Securities and Exchange Commission today charged two co-founders of a purported financial services start-up with orchestrating a fraudulent initial coin offering (ICO) that raised more than $32 million from thousands of investors last year.  Criminal authorities separately charged and arrested both defendants.   

The SEC’s complaint alleges that Sohrab “Sam” Sharma and Robert Farkas, co-founders of Centra Tech. Inc., masterminded a fraudulent ICO in which Centra offered and sold unregistered investments through a “CTR Token.”  Sharma and Farkas allegedly claimed that funds raised in the ICO would help build a suite of financial products.  They claimed, for example, to offer a debit card backed by Visa and MasterCard that would allow users to instantly convert hard-to-spend cryptocurrencies into U.S. dollars or other legal tender.  In reality, the SEC alleges, Centra had no relationships with Visa or MasterCard.  The SEC also alleges that to promote the ICO, Sharma and Farkas created fictional executives with impressive biographies, posted false or misleading marketing materials to Centra’s website, and paid celebrities to tout the ICO on social media.  

According to the complaint, Farkas made flight reservations to leave the country, but was arrested before he was able to board his flight.  Criminal authorities also arrested Sharma.  

“We allege that Centra sold investors on the promise of new digital technologies by using a sophisticated marketing campaign to spin a web of lies about their supposed partnerships with legitimate businesses,” said Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement.  “As the complaint alleges, these and other claims were simply false.”

“As we allege, the defendants relied heavily on celebrity endorsements and social media to market their scheme,” said Steve Peikin, Co-Director of the SEC’s Division of Enforcement.  “Endorsements and glossy marketing materials are no substitute for the SEC’s registration and disclosure requirements as well as diligence by investors.” 

The SEC’s complaint, filed in federal court in the Southern District of New York, charges Sharma and Farkas with violating the anti-fraud and registration provisions of the federal securities laws.  The complaint seeks permanent injunctions, return of allegedly ill-gotten gains plus interest and penalties, as well as bars against Sharma and Farkas serving as public company officers or directors and from participating in any offering of digital or other securities.  In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Sharma and Farkas.  

The SEC’s investigation, which is continuing, is being conducted by Jon A. Daniels, Luke M. Fitzgerald, and Alison R. Levine of the SEC’s Cyber Unit and New York Regional Office, and supervised by Valerie A. Szczepanik and Robert A. Cohen.  The litigation is being conducted by Mr. Daniels, Mr. Fitzgerald, and Ms. Levine, and supervised by Ms. Szczepanik.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority. 

Investors in the Centra ICO who believe they may be a victim should contact www.SEC.gov/tcr.  The SEC’s Office of Investor Education and Advocacy has issued an Investor Bulletin on initial coin offerings and additional information is available on Investor.gov and SEC.gov.

SEC Charges Fintech Company Founder With Scheme to Defraud Investors and Misappropriate Funds

The Securities and Exchange Commission has charged Michael Liberty, the founder of the fintech startup now known as Mozido Inc., with a scheme to trick hundreds of investors into investing in his shell companies instead of Mozido.  Liberty and his acco…

SEC Charges Prominent Pastor, Financial Planner in Scheme to Defraud Elderly Investors

The Securities and Exchange Commission yesterday charged the pastor of one of the largest Protestant churches in the country and a self-described financial planner in a scheme to defraud elderly investors by selling them interests in defunct, pre-Revol…

Broker-Dealer Admits It Failed to File SARs

Aegis Capital Corporation, a New York-based brokerage firm, has admitted that it failed to file Suspicious Activity Reports (SARs) on numerous suspicious transactions.

Broker-dealers are required to file SARs for certain transactions suspected to invo…

SEC Charges Recidivist Broker-Dealer in Employee’s Long-Running Pump-and-Dump Fraud

The Securities and Exchange Commission announced charges against Wedbush Securities Inc. for failing to supervise employee Timary Delorme after the broker-dealer ignored numerous red flags indicating that Delorme was involved in a long-running pump-and…

SEC Charges Energy Storage Company, Former Executive in Fraudulent Scheme to Inflate Financial Results

The Securities and Exchange Commission today charged a California-based energy storage and power delivery product manufacturer and one of its former sales executives in a fraudulent revenue recognition scheme designed to inflate the company’s reported …