SEC Charges Manny Shulman and David Hirschman
On September 3, 2015, the Securities and Exchange Commission (“SEC”) charged Manny J. Shulman and David Hirschman for their involvement in the fraudulent, unregistered sale of securities of Caribbean Pacific Marketing, Inc. (“Caribbean Pacific”), a now-defunct Florida corporation that purported to be a sun-care and skin-care products start-up company. The Commission also charged Shulman for making misstatements and omissions in Caribbean Pacific’s registration statement.
According to the SEC’s complaint, Caribbean Pacific’s Form S-1 registration statement filed with the SEC, failed to disclose that Manny Shulman, a securities fraud recidivist, controlled the company’s day-to-day operations. According to the SEC charges, the Form S-1 registration statement failed to disclose the managerial role in the company of a securities attorney, William J. Reilly, who is also a securities fraud recidivist and a disbarred attorney. According to the SEC Charges, although two other individuals were listed in the Form S-1 registration statement as the corporate officers and directors of Caribbean Pacific, Shulman and Reilly actually controlled the company and ran it on a day-to-day basis. The SEC subsequently issued a trading suspension of Caribbean Pacific’s registration statement based on findings that it was materially misleading and deficient.
In addition, the SEC complaint alleges that from June 2012 through October 2012, Shulman and Hirschman engaged in a private, unregistered offering of Caribbean Pacific stock, raising $271,500 from 18 investors located in various states. The complaint also alleges that Shulman and Hirschman told investors that Caribbean Pacific would serve as a public shell that would later engage in a reverse merger with another company called Dreamscapes International Properties, Inc. (“Dreamscapes”). Instead of using investors’ money for expenses related to Caribbean Pacific’s Initial Public Offering (IPO) and the business development of Dreamscapes, the complaint alleges that Shulman and Hirschman misappropriated most of their money.
The Commission’s complaint alleges that Shulman and Hirschman both violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder and that Hirschman also violated Section 15(a) of the Exchange Act. The Commission is seeking financial penalties, disgorgement of ill-gotten gains plus prejudgment interest, and permanent injunctions against both Shulman and Hirschman and a penny stock bar against Hirschman. Shulman has consented, without admitting or denying the allegations of the complaint, to the entry of judgment ordering permanent injunctive relief against him and requiring him to pay disgorgement and a civil penalty, in amounts to be determined by the Court at a later date.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, or to [email protected]lawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. For more information about going public and the rules and regulations affecting the use of Rule 144, Form 8K, crowdfunding, FINRA Rule 6490, Rule 506 private placement offerings and memorandums, Regulation A, Rule 504 offerings, SEC reporting requirements, SEC registration statements on Form S-1 , IPO’s, OTC Pink Sheet listings, Form 10 and OTC Markets disclosure requirements, DTC Chills, Global Locks, reverse mergers, public shells, direct public offerings and direct public offerings please contact Hamilton and Associates at (561) 416-8956 or [email protected]. Please note that the prior results discussed herein do not guarantee similar outcomes.
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