Cannabis Company Infinex Ventures and CEO Ronald Salem Charged with Fraud
On September 30, 2016, the Securities and Exchange Commission (“SEC”) filed fraud charges against cannabis company Infinex Ventures, Inc. and its CEO Ronald Salem.
According to the SEC’s complaint filed in the U.S. District Court for the District of Colorado, Salem incorporated a new entity, Marijuana Funding Inc. in March 2014, and then caused Infinex to release a series of three press releases in May and June 2014 announcing its negotiations with, and ultimate acquisition of, Marijuana Funding, Inc. In those press releases, Infinex and Salem described Marijuana Funding, Inc. as a private company that specialized in funding companies in the marijuana industry. In the final release, Infinex claimed to have “secured access to $100 million for marijuana funding” through Marijuana Funding, Inc. Before and after issuing these press releases, Infinex released false financial information claiming that it had generated revenue of approximately $107,000 for the month of April 2014 and $512,000 for the full second quarter of 2014. In fact, Salem controlled Marijuana Funding, Inc., and neither Infinex nor Marijuana Funding, Inc. had any operations, revenue, or funding.
The SEC’s complaint alleges that this conduct violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctions and civil monetary penalties. With respect to Salem, the SEC also seeks officer-and-director and penny stock bars. In a separate action, the SEC temporarily suspended trading in the securities of Infinex.
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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