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Stories of Interest
- SEC Adopts Statement and Interpretive Guidance on Public Company Cybersecurity Disclosures
- SEC Charges Former Bitcoin Exchange and Its Founder With Fraud
- JPMorgan Chase to Replace NYC Headquarters with 70-Story Skyscraper
- Citigroup Raises CEO Corbat's Pay 48% to $23Mn
- Should Congress Create a Crypto-Cop?
- JPMorgan Weighs Buying an Exchange-Traded Funds Firm
- Hey, Goldman Sachs: Wanna Buy BNY Mellon?
- SEC Order Rejecting Acquisition of Chicago Stock Exchange (CSX) by Chinese-Baesd Company
- Kyle Moffatt Named Chief Accountant in SEC CorpFinance
- SEC Suspends Trading in 3 Issuers Claiming Involvement in Cryptocurrency and Blockchain Technology
- Karen Garnett, Assoc. Director of SEC CorpFinance, to Leave After 23 Years of Service
- Louisiana Adviser Barred for Hiding Losses from Investors
- Connecticut HF Manager Illegally Diverted Investor Money - Now Owes Nearly $13Mn
- White House Cleaning House of Advisors Without Full Security Clearance
- Goldman Projects 30% Growth in Wealth Management Advisor Force
- Whistleblower Alleges Manipulation of CBOE Volatility Index
- FINRA Looking Into VIX (CBOE Volatility Index) Manipulation: WSJ
- Atlanta-Area Resident Charged with Misusing Investor Funds - SEC
- FINRA Announces 2018 West Region Networking Seminar
- Alberto Arevalo, Associate Director in Office of International Affairs, to Retire From SEC
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NEWSLETTERS & ALERTS
Marijuana Consulting Firm's Bogus Scheme Goes Up In Smoke – SEC
A California-based company and its founder agreed to pay $12.3 million in disgorgement, prejudgment interest and penalties to settle SEC charges that it falsely touted "record" revenue numbers to investors and claimed to be a leader in the marijuana industry, while some of its earnings came from sham transactions with a secret affiliate.
ACCORDING TO THE SEC'S COMPLAINT, … Medbox (now known as Notis Global) provided marijuana consulting services and claimed to sell vending machines known as "Medbox" devices capable of dispensing marijuana based on biometric identification. The SEC alleges that Vincent Mehdizadeh created a shell company called New-Age Investment Consulting to carry out illegal stock sales and used the proceeds from those sales to boost Medbox's revenue.
Medbox then issued press releases headlining the phony revenues as record earnings to legitimize itself as a viable commercial operation when in fact nearly 90% of the company's revenue in 2014 stemmed from sham transactions with New-Age.
Mehdizadeh used the money raised in New-Age's illicit stock sales, in part, to purchase a luxury home in the Pacific Palisades. [for a heady price, I'm sure.]
The SEC also charged Medbox's then-CEO Bruce Bedrick, New-Age and Yocelin Legaspi, Mehdizadeh's then-fiancée. The SEC's litigation continues against all three.