SEC Suspends Smart Ventures, Inc. (SMVR)
On July 14, 2015, the Securities and Exchange Commission (SEC) announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the “Exchange Act”), of trading of the securities of Smart Ventures, Inc. (“Smart Ventures”), at 9:30 a.m. EDT on July 13, 2015, and terminating at 11:59 p.m. EDT on July 24, 2015. At the time of the trading suspension, Smart Ventures was quoted on the OTC Markets with the symbol SMVR.
The SEC announcement reflects that the trading suspension of Smart Ventures’ securities was issued because of questions regarding the accuracy and completeness of information in its OTC Markets reports and filings and press releases. This announcement specifically mentioned an OTC Markets report issued by Smart Ventures for the quarterly period ended March 31, 2015 and a June 30, 2015 press release with respect to the company’s business plans and activities, control persons, related party transactions and financial statements.
A review of the March 31, 2015, OTC Markets report filed on May 30, 2015, reflects that Smart Ventures claimed to have assets of $1,515,750 which consist of $1,450,000 “equity posted at cost” in The Green Fund Company, a cannabis marketing company, payment processing, and cannabis related holding company. According to this report, the interest in The Green Fund entitled Smart Ventures to 50% of its net profits and 9.99% equity represented by 1,450,000 common shares. According to the same report, Smart Ventures subsequently acquired a 9.9% equity and 5% Royalty for five years in Something Edible, Inc. cannabis infused edibles company in California. The OTC Markets report also reflects $0 cash on hand, $0 in revenues, $0 in accounts receivable and $0 cash used in operations for the period.
Even more puzzling than the claimed equity posted at cost is the June 30, 2015, press release which reflects that Smart Ventures was in negotiations for a private public partnership (PPP) to provide Engineering Procurement Construction (EPC) in East Africa to construct a 200 Mw power plant with a world known EPC partner. According to the press release, Smart Ventures would own an equity stake of approx. 15-20% of the power plant and earn EPC revenue during construction approx. 10% of the plant budget.
Could anyone really believe that an investment in Smart Ventures was advisable?
The SEC cautioned brokers, dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company. Further, brokers and dealers should be alert to the fact that, pursuant to Rule 15c2-11 under the Exchange Act, at the termination of the trading suspension, no quotation may be entered unless and until they have strictly complied with all of the provisions of the rule.
If any broker or dealer is uncertain as to what is required by Rule 15c2-11, he should refrain from entering quotations relating to Smart Ventures’ securities until such time as he has familiarized himself with the rule and is certain that all of its provisions have been met. If any broker or dealer enters any quotation which is in violation of the rule, the Commission will consider the need for prompt enforcement action.
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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Brenda Hamilton, Securities Attorney
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