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Stories of Interest
- Credit Suisse Fully Compliant on Sanctions: CEO
- Ex-UBS Metals Trader Beats Spoofing Conspiracy Charge
- Investment Advisor, WCAS Management Corp, To Pay Nearly $800K Over Conflicts of Interest
- Altaba, fka Yahoo!, to Pay $35Mn for Failing to Disclose Massive Cybersecurity Breach - SEC
- SEC Formerly Bars Martin Shkreli from Industry
- HF Billionaire Steve Cohen Buying Into Fintech Start-Ups
- Deutsche Bank Is Weighing Massive Cuts in Its U.S. Cash Equities Unit
- Richard Jenrette, Co-Founder of DLJ Investment Bank, Dies at 89
- Goldman Sachs Makes First Hire in Cryptocurrency Markets Unit
- Special FINRA Election to Fill Large Firm Governor Vacancy
- Chicago-Based Investment Adviser Sentenced to 151 Months in Prison - SEC
- Dun & Bradstreet Hit With FCPA Violations - SEC
- SEC Charges Additional Defendant in Fraudulent ICO Scheme
- Warren Buffett Simply Blew it on Wells Fargo Stock: Dick Bove (Video)
- Barclays and Deutsche Bank to Lag U.S. Trading Peers
- NY AG Schneiderman Seeks to Close Loophole That Could Let Trump Pardons Block State Charges
- 'Fearless Girl' is Moving to NYSE After Year Staring Down 'Charging Bull'
- What's In Your Wallet - American Express Shares Soar After Earnings Release
- Deutsche Bank's Executive Departures Continue Following Change in CEO
- Reflections of an Economist Commissioner (SEC's Piwowar)
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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.