The US Securities and Exchange Commission (SEC) has filed civil fraud charges accusing 15 people of either “acting as unregistered brokers” or “aiding-and-abetting” this kind of activity related to the solicitation of microcap issuer Intertech Solution’s “unregistered and fraudulent securities offerings.” Already, 11 of the defendants have consented to the entry of final judgments but without denying or admitting to wrongdoing.
The 15 individuals are:
- Daniel Broyles
- Michael Duke
- Richard Bohnsack
- Charles Davis
- Joel Duncan
- Mark Parman
- Paula Saccomanno
- William Roth
- Billy Ray Statham, Jr.
- Kenneth Shelton
- Dennis Swerdlen
- Martin Lewis
- Glenn Story
- Harold Wassermen
- Alexander Bevil
Intertech Solutions hired these individuals to solicit prospective retail investors. From 2/14 through 12/16, they raised about $7M from hundreds of investors in the US and Canada while allegedly earning 35-50% of this in commissions.
The SEC claims that investors were not apprised of these commission fees. Instead, they were sent a private placement memoranda that made it seem that “only 10% of investor proceeds” would go to commissions. Now, the regulator wants to impose penny stock bars, disgorgement of ill-gotten gains, and penalties against the defendants.
The SEC case against the men comes almost two years after the regulator filed its case against Intertech and principals David Naylor and William Scott Marshall. The charges said that they misled investors about the value of the company’s gold mine interest, its time schedule for making revenue, and commission payments. The two men were accused of stealing hundreds of thousands of dollars in investor money to cover their personal expenses.
All three settled without denying or admitting to the charges, with Marshall and his West Port Energy, a relief defendant, agreeing to disgorge almost $7.4M in proceeds. Marshall also agreed to pay a nearly $185K civil penalty, while Naylor’s penalty was over $92K.
Court Approves SEC Settlement In $22M Fraud that Bilked More than 200
A federal district court has approved a settlement reached by the SEC over a $22M fraud that harmed more than 200 retail investors. The alleged mastermind of the investor scam, Lawrence P. Schmidt, was ordered to pay over $25M while various entities, including FutureGen Company and Commercial Equity Partners, LLC were told to disgorge more than $12M.
In the SEC’s case, brought in 2014, the SEC accused Schmidt of setting up a number of companies that appeared legitimate when, in truth, they were meant to bring in investments while hiding the fact that he was mixing and misusing investor money.
More than 200 retail investors bought notes from these companies. Schmidt, meantime, allegedly took nearly $2M of that money either for his own use or to pay earlier investors. He later fired his staff and left the country.
This type of investor is typically an individual investor, not an entity, and is not considered a professional investor. Retail investors don’t usually invest as much as institutional investors or high net worth individual investors. Many retail investor are inexperienced, unsophisticated investors who may not understand the markets or the risks involved without an investment professional explaining all of this to them.
At Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm), our retail investor fraud lawyers work with individual investors throughout the US. Your first consultation with SSEK Law Firm is a free, no obligation case consultation.