Michael Andre Jones Charged for Fraudulent Offering and Sales of Unregistered Securities
On August 22, 2016 the Securities and Exchange Commission (“SEC”) announced that, on August 19, 2016, the SEC filed a settled civil action in U.S. District Court for the District of Columbia against Michael Andre Jones, alleging that he conducted a fraudulent offering and sales of unregistered securities.
The SEC’s complaint alleges that, from April of 2010 through July of 2013, Jones sold more than $700,000 worth of convertible promissory notes of Green Bash LLC to twenty investors in twelve states. Jones formed Green Bash and was its sole shareholder and director. Jones told investors that Green Bash arranged and promoted “event after-parties” by utilizing a “viral e-commerce platform.” In reality, the company never generated any revenue from operations. According to the complaint, in connection with the offer and sales of the notes, Jones knowingly or recklessly made multiple fraudulent statements and otherwise engaged in a scheme and practices to defraud investors. In fact, Jones lived off the proceeds of the note sales. The complaint further alleges that the Green Bash promissory notes were not registered with the SEC and were not subject to any exemption from registration and that Jones acted as an unregistered broker in conducting the offering. Finally, the complaint alleges that Jones separately defrauded two investors by selling his restricted stock in a small unrelated biotechnology company: when Jones was unable to obtain an opinion letter lifting the restrictions on the stock, he conveniently kept both the restricted stock and the funds the investors had paid him for the stock.Without admitting or denying the SEC’s allegations, Jones agreed to settle the civil action against him by consenting to entry of a final judgment that permanently enjoins him from future violations of Sections 5 and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 (Exchange Act), and Exchange Act Rule 10b-5; enjoins him, directly or indirectly, including, but not limited to, through any entity owned or controlled by him, from participating in the issuance, purchase, offer, or sale of any security, provided however, that such injunction shall not prevent him from purchasing or selling securities listed on a national securities exchange for his own personal account; orders him to pay disgorgement of $709,645, plus prejudgment interest thereon of $77,673, and imposes a civil penalty of $709,645. The proposed settlement is subject to the approval of the district court.
Jones has also agreed to settle a proposed administrative proceeding against him pursuant to Exchange Act Section 15(b)(6), to be based on the entry of the proposed injunctions, and, accordingly, he would consent to the issuance of a Commission order barring him from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, and barring him from participating in any offering of a penny stock.
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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