SEC Obtains Final Judgement Against Julio Cruz for Targeting Latino Communities with Pyramid Scheme
On September 17, 2015, the Securities and Exchange Commission (SEC) announced that on September 16, 2015, the federal court in Boston, Massachusetts, entered a final judgment against defendant Julio Cruz of Duluth, Georgia, a defendant in a previously-filed actio. On February 2015, the (SEC) charged two Portuguese companies operating under the name Wings Network, plus three company officers and 12 promoters of Wings Network, including Cruz, with carrying out an international pyramid scheme targeting Latino communities in the U.S.
In settling the SEC’s charges, Cruz confessed that he was a promoter of defendants Tropikgadget Unipessoal LDA and Tropikgadget FZE, which operated under the name Wings Network, appearing in promotional videos on the internet and traveling to several states, including Texas, during 2014 to present at Wings Network promotional events. Cruz also confessed that while in Texas he solicited friends to attend a Wings Network presentation given by Wings Network principal Carlos Barbosa, who lauded the Wings Network opportunity. Barbosa is also a defendant in the SEC’s enforcement action.
Cruz complied to the opening of the judgment entered by the United States District Court of the District of Massachusetts, which permanently restrains and enjoins him from violating the unregistered securities offering provisions of Sections 5(a) and 5(c) of the Securities Act of 1933. The judgment also permanently restrains and enjoins him from offering, operating, or participating in any marketing or sales program in which a participant is compensated or promised compensation solely or primarily (1) for inducing another person to become a participant in the program, or (2) if such induced person induces another to become a participant in the program. Finally, the judgment orders Cruz to pay a total of $3,232.32 in disgorgement of ill-gotten gains, prejudgment interest, and a civil penalty.
On September 14, 2015, the SEC voluntarily dismissed charges against defendant promoter Pablo Andres Garcia.
The SEC’s litigation in this matter continues against the Tropikgadget companies, their officers and the remaining promoters of the Wings network pyramid scheme.
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, by email at [email protected] or visit www.securitieslawyer101.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 and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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