SEC Files Fraud Charges Against Microcap Company and its Founder
Last week, The Securities and Exchange Commission charged a microcap company and its founder with fraud for painting a misleading picture of the company’s finances that deceived the investing public about its true financial condition as well as its technology.
The SEC’s complaint, filed on September 29, 2016, alleges that Accelera Innovations Inc.’s (OTCPINK: ACNV) public filings included the revenues of a separate company that it did not own or control and, as a result, Accelera improperly inflated its annual revenue by up to 90 percent. In addition, the complaint alleges that Accelera portrayed itself as a provider of software when, in reality, it was not providing software to anyone. Geoffrey Thompson, Accelera’s founder, allegedly signed Accelera’s annual reports. The complaint also alleges that Thompson, acting through Accelera and Synergistic Holdings LLC, sold approximately $1.7 million worth of Accelera stock to investors, and that the sale was not registered or subject to any exemption from registration.
The complaint seeks permanent injunctions, disgorgement of ill-gotten gains, civil penalties, an officer-and-director bar against Thompson, and penny stock bars against Thompson and Synergistic.
The SEC separately charged John Wallin, Accelera’s Chief Executive Officer and Chief Financial Officer, with signing certifications as to the accuracy of Accelera’s Forms 10-K and 10-Q that falsely attested that he had reviewed Accelera’s financial statements when he had not. The complaint, filed in the U.S. District Court for the Northern District of Illinois, charges Wallin with aiding and abetting Accelera’s violations of Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder and with violating Rule 13a-14 under the Exchange Act. Without admitting or denying the SEC’s allegations, Wallin agreed to the entry of a judgment that permanently enjoins him from violating the charged provisions of the federal securities laws and permanently bars him from acting as an officer or director. The judgment also provides that the amount of any civil penalty will be determined by the court at a future date. The settlement is subject to court approval.
The SEC also separately charged Daniel Caravette, of St. Charles, Ill., with acting as an unregistered broker-dealer. Caravette’s alleged violations involved sales of stock in Accelera and a Canadian company founded by Thompson which claimed to be involved in medical marijuana production, distribution, infusion, research, and testing. The SEC found that Caravette’s transactions violated Section 15(a)(1) of the Exchange Act and Sections 5(a) and 5(c) of the Securities Act. Without admitting or denying the SEC’s findings, Caravette agreed to the entry of an order requiring him to cease-and-desist from violating the charged provisions of the federal securities laws, to pay a total of $307,724.78, consisting of $243,332.13 in disgorgement, $24,392.65 in interest, and a $40,000 civil penalty, and to be barred from the industry, with a right to apply for reentry after three years.
The SEC’s investigation in this matter is continuing.
Learn more HERE.