Renee
12 months ago
HMPQ: Securities and Exchange Commission v. GPL Ventures LLC, GPL Management LLC, Alexander J. Dillon, and Cosmin I. Panait, No. 1:21-cv-06814 (S.D.N.Y. filed Aug. 13, 2021)
Courtesy Samsamsamiam:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171833649
Litigation Release No. 25706 / May 3, 2023
SEC Obtains Final Judgments Against Firm and Its Principals for Acting as Unregistered Dealers and Engaging in a Penny Stock Fraud Scheme
On May 2, 2023, the U.S. District Court for the Southern District of New York entered final judgments against Alexander J. Dillon, Cosmin I. Panait, and their corporate entities GPL Ventures LLC and GPL Management LLC, whom the SEC charged with acting as unregistered dealers and engaging in a penny stock fraud scheme. To settle the case, the defendants consented to pay more than $39 million in civil penalties and disgorgement.
The SEC's complaint, filed on August 13, 2021, alleged that between July 2017 and August 2021, the defendants acted as unregistered securities dealers by privately acquiring numerous microcap stocks at a discount and subsequently publicly selling the securities to the investing public. In addition, the complaint charged the defendants with orchestrating a fraudulent scheme in which they acquired shares in microcap issuer HempAmericana, Inc. and secretly arranged for HempAmericana to use a percentage of the stock proceeds to fund stock promotions while the defendants sold their shares into the market.
Without admitting or denying the allegations in the SEC's complaint, the defendants consented to the entry of final judgments permanently enjoining them from violating Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a)(1) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The final judgments also order the defendants to pay $29,681,569 in disgorgement and $2,489,799 in prejudgment interest, orders Dillon and Panait to pay civil money penalties of $3,500,000 each, directs the defendants to surrender for cancelation all remaining unconverted convertible notes still held, with a face value of approximately $11 million, and imposes five-year penny stock bars against defendants.
The SEC's investigation was conducted by Brenda Chang, John C. Lehmann, Peter A. Lamore, and Adam S. Grace, and the litigation, which remains ongoing against other defendants, is being handled by Paul Gizzi, Ms. Chang, and Mr. Lehmann. The case is being supervised by Thomas P. Smith, Jr.
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https://www.sec.gov/litigation/litreleases/2023/judg25706.pdf
https://www.sec.gov/litigation/litreleases/2021/lr25169.htm
Pennyes
2 years ago
According to the SEC's complaint, filed in the United States District Court for the Southern District of New York, GPL Ventures purchased, since at least July 2017, more than 1.5 billion shares of HempAmericana Inc. stock through a Regulation A offering, with the understanding that HempAmericana would use a portion of the offering proceeds to secretly finance stock promotions that would enable GPL Ventures to sell its HempAmericana shares at a profit. The complaint alleges that HempAmericana misled investors regarding its use of the offering proceeds, and that co-defendants Seaside Advisors and Lawrence Adams paid a stock promoter who, in turn, funded promotions of HempAmericana’s stock that failed to disclose HempAmericana's role in financing the promotions and that GPL Ventures intended to unload its shares into the promotion. GPL Ventures and certain of the defendants allegedly reaped about $11 million in illegal profits from this fraudulent scheme.
https://www.sec.gov/news/press-release/2021-153
Realtalknofaketalk
2 years ago
Just saw this today. I remember all the hype by this punk back in 2019-2020. The oil machines Jamie from hempwerks remember him ??? He was the brains lol. Wow I’m glad I got out This guy kept talking about how honest he was. How he was a war vet. True blue collar worker. Lol scum bag old fart
The first clue was when some of the investors were driving to the site in New York and nothing was happening lol
How does one make $11 million when the company records less than $10,000 in revenue for a year? Apparently by pumping and dumping the stock says the SEC (Securities and Exchange Commission). The SEC is opposing an attempt by HempAmericana (OTC: HMPQ) to have its complaint dismissed.
Hemp Americana
HempAmericana was incorporated in 2014 with a factory and equipment aimed at processing, bottling, and selling products made of industrial hemp, including CBD oil. Since its incorporation, HempAmericana has never been profitable. From 2017 through May 2020, HempAmericana generated a mere $9,727 in revenues. Salvador E. Rosillo is HempAmericana’s CEO. The complaint alleges that almost a third of the company’s money was used for stock promotion – not for actually growing the business.
The company reported that for the year ended in February 2021, it had revenues of $7,793 and expenses of $478,064, leaving a net loss of $551,291. For the quarter ending in May, the company had revenues of $300 and the quarter ending in August had no revenues and just $12,000 in cash.
SEC Complaint
In August 2021, The SEC accused GPL Ventures and GPL Management of acting as unregistered dealers by privately acquiring large blocks of stock in approximately 140 microcap issuers and publicly selling those blocks into the market for their own account, generating gross proceeds of at least $81 million. The most lucrative of the penny stocks was HempAmericana which generated a profit of $11 million.
The GPL defendants are accused of secretly funding promotional activity in penny stocks in a scheme known as “scalping.” Scalping is when someone buys shares of a stock for his or her own benefit before recommending that stock to others and doesn’t say anything during that recommendation of plans to sell them. The action is then followed by selling the shares once they rise after the recommendation. It’s also called a pump and dump scheme. The SEC accuses the GPL Defendants of buying and selling large blocks of HempAmericana securities from 2017 through at least late 2019.
The SEC complaint alleges that HempAmericana, through Rosillo sold shares to Alexander Dillon, Cosmin Panait, GPL Ventures LLC, and GPL Management LLC on the condition that HempAmericana then pays a portion of the proceeds from those sales to stock promoters in order to tout the company’s stock. The filing stated, “HempAmericana then issued stock to the GPL Defendants under Regulation A—an exemption from the requirement that securities offerings be registered—and indeed provided a significant portion of the proceeds to stock promoters or their intermediaries. The GPL Defendants sold (or “dumped”) the stock at a profit once the promoters had touted the stock and “pumped” up its volume and price. As Rosillo knew, the GPL Defendants would not purchase more HempAmericana stock each time until they had sold their prior holdings. This practice took place over the course of three years, through multiple issuances of shares, and was never disclosed to other investors in the company.”
Dillon and Panait co-own and control GPL Ventures and GPL Management, through which they invest in microcap companies. Dillon previously held a Series 7 securities license and was briefly employed at a registered broker-dealer from April 2013 to July 2013. Panait is a Romanian citizen.
Stock Promoters
Seaside Advisors, LLC and Lawrence B. Adams were hired to promote the HempAmericana stock. They didn’t disclose that the GPL Defendants funded the promotions, and they are accused of failing to disclose that the GPL Defendants intended to sell HempAmericana stock at the same time that Seaside and Adams were paying promoters to recommend that investors purchase the stock. Adams owns Seaside and is also the CEO of a microcap issuer, Image Protect Inc. (ticker OTC: IMTL).
The SEC alleges that the GPL Defendants repeatedly bought HempAmericana stock at a discount and then sold with HempAmericana sending a portion of its resulting stock sale proceeds to Seaside. Once HempAmericana sent stock proceeds to Seaside, Seaside used the proceeds to pay a professional stock promoter. That stock promoter hired other promoters to tout the stock. The GPL Defendants would sell their HempAmericana stock during the promotional campaigns.
For example, in August 2017, when the GPL Defendants purchased 16 million shares of stock for $80,000, the funds went to a HempAmericana escrow account from which Dillon then provided instructions for $50,000 to be sent to HempAmericana and $30,000 to be sent to Seaside. Overall, of the $7.4 million in stock purchase proceeds that the GPL Defendants paid to HempAmericana during the scheme, HempAmericana paid $2.18 million to Seaside, and Seaside in turn forwarded nearly 60% of the amount it received to an unnamed individual hired to promote the stock.
The unnamed individual then is accused of using two kinds of promoters. First, he hired people whom he understood to have email lists or social media mechanisms that would enable them to get buyers into the stock, apparently with the promise of buying cheaper stock in advance of the promotion. Second, he hired people who would in turn pay others to engage in more traditional promotional activity during the “pump” of HempAmericana’s stock price (before the GPL Defendants “dumped” their stock).
The complaint stated, “As an example of how the scheme unfolded, in January 2018, the GPL Defendants purchased $170,000 of HempAmericana stock. $70,000 of the sales proceeds went to Seaside, and $55,000 of that amount went to Individual A, who in turn paid an entity, “Entity A.” Later that month, another entity, “Entity B,” put out email blasts promoting HempAmericana stock and disclosing that it was compensated by Entity A, which was described as a non-affiliated third party. The promotion’s disclaimer said that Entity B did not own any shares in HempAmericana and made no reference to anyone intending to sell shares into the promotion. Individual A’s hiring of such intermediaries further insulated the GPL Defendants (and HempAmericana) from any apparent connection to the promotional campaign.”
OTC Skull & Crossbones
While the SEC case didn’t mention the stock promoters, back in 2018 when the OTC placed a warning on the stock, that information was disclosed. At the time, the company had paid $71
stockscamalerter
2 years ago
"As to that scheme, I find that the Complaint plausibly alleges that HempAmericana and Rosillo had the requisite scienter to be held liable for their participation. First, it plausibly alleges that HempAmericana and Rosillo were willing participants in the scheme. They were aware of the terms of the GPL Defendants' investment, and that more than half of the investment was going to fund the promotional activity. Indeed, Rosillo paid Individual A because the GPL Defendants' brokerage firm would not allow the funds to come from HempAmericana's escrow account. In addition, the Complaint alleges that Individual A was in contact with both Rosillo and the GPL Defendants, leading to a strong inference that all of the various actors in this complex scheme were working in concert and with the express understanding that the purpose was to drive up the price of HempAmericana's stock. Finally, based upon the allegations that prior to the GPL Defendants' investment, HempAmericana had never been profitable, it strains credulity to think that neither HempAmericana nor Rosillo knew what was going on. And if they simply thought that previously uninterested investors suddenly saw substantial value in HempAmericana's stock, despite no other changes in business operations or financial prospects, then they were willfully blind to the material circumstances surrounding HempAmericana's sudden change in fortune."
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