The Securities and Exchange Commission today announced fraud charges and an asset freeze obtained against a Connecticut man accused of misleading people into investing in his company and then taking their money for his personal use. His victims include several women he met through an online dating website.
The SEC alleges that Thomas J. Connerton told investors that his company Safety Technologies LLC was developing a material to make surgical gloves better resistant to cuts or punctures. He claimed that several major glove manufacturers wanted the technology and Safety Technologies was on the brink of imminent deals that would result in large payouts for investors in his company. But no deals have ever been anywhere close to materializing, and Connerton has emptied the company’s bank account by writing a series of checks to himself and using investor funds for his own expenses.
According to court documents filed by the SEC, among Connerton’s improper spending of investor funds was $20,000 for an engagement ring for his latest online date turned investor. There are more than 50 investors in Safety Technologies, including six women Connerton met through online dating and 14 others who are family or friends of those women.
“We charge Connerton with lying about the state of his business and exploiting personal connections to lure in investors,” said Paul G. Levenson, Director of the SEC’s Boston Regional Office. “Investors beware: a rosy picture of a business that’s about to take off could still lead to a total loss of investment.”
According to the SEC’s complaint, Connerton failed to comply with the requirements for private offerings exempt from registration under the federal securities laws, such as providing investors with appropriate financial information and confirming that they have sufficient knowledge and experience to evaluate the merits and risks of the investment. Connerton also is not registered to sell investments. Investors can quickly and easily check whether people selling investments are registered by using the SEC’s investor.gov website.
The SEC has obtained a court order freezing the assets of Connerton and Safety Technologies. The SEC’s complaint seeks a permanent injunction as well as the return of allegedly ill-gotten gains plus interest and a penalty.
The SEC’s investigation was conducted by Jonathan R. Allen, Sofia Hussain, Alfred Day, and Amy Gwiazda of the Boston office.