Florida companies face SEC probe
South Florida Business Journal - by Paul Brinkmann
southflorida.bizjournals.com
The Securities and Exchange Commission is cracking down on a network of businesses that allegedly reaped about $7 million from illegal, unregistered stock sales.
In a complaint filed Thursday in federal court in Orlando, the SEC names three businessmen and three companies that operated in Florida and Indiana that allegedly sold unregistered stocks in what is called a wraparound agreement.
The defendants allegedly bought debt owed to officers at three other companies, converted the debt to stock ownership in those companies, and sold it at large profits in the form of unregistered securities.
One of the issuer companies, which are not named as defendants, is Weston-based Cross Atlantic Commodities, which purports to develop “life enhancement products,” including a product called Re Juv by Caci, an anti-aging cream. The company was formerly known as Business Advantages 17.
Cross Atlantic is registered in Nevada. The chairman and CEO of Cross Atlantic is Jorge Bravo, 46, of Weston, and the secretary is Jesse Starkman, also of Weston.
According to the suit, K&L International Enterprises, a Florida corporation based in Casselberry, northeast of downtown Orlando, paid Cross Atlantic about $226,704 and received 1.4 billion shares of its stock. Within six weeks, K&L resold those shares.
The suit also alleges that Signature Worldwide, a Minnesota company with a mailing address in Casselberry, paid Cross Atlantic about $31,210, and received 74 million shares of its stock.
Combined, the sales of shares equaled about 37 percent of Cross Atlantic’s publicly available shares.
The suit seeks disgorgement of ill-gotten gains, civil penalties and an order barring defendants from participating in penny stock offerings.
Attempts to reach the SEC and Cross Atlantic for more information about the allegations were not immediately successful.
Paul Montoya, an attorney and assistant director in the Chicago office of the SEC, said the investigation into the stock sales is ongoing.
“In cases like this, there’s varying degrees of involvement. Sometimes, stock distributors are in charge and selling out shares without the issuer’s knowledge. Then, there are other cases where the issuers are involved,” he said. “When, or if, we determine there’s evidence the issuers violated the law, we would take action against them as well.”
Other defendants are:
Signature Leisure, a Colorado corporation with its main office in Casselberry.
Enzyme Environmental Solutions, a Nevada corporation located in Fort Wayne, Ind., purporting to produce enzyme-based products for cleaning and dietary supplements.
Stephen Carnes, 45, of Apopka, president of Signature Leisure and managing member of Signature Worldwide.
Lawrence Powalisz, 45, of Winter Park, sole officer of K&L.
Jared Hochstedler, 33, of Fort Wayne, Ind.
California attorney Irving Einhorn represents K&L International, the Signature companies, Powalisz and Carnes. He pointed out that the SEC is merely alleging registration violations, not fraud.
“We’re going to try and work something out. The judge entered a temporary restraining order,” Einhorn said. “My clients are considering their options and will respond in the course of time.”
Besides Weston-based Cross Atlantic, the issuer companies named in the suit are:
International Power Group, a Delaware corporation located in Celebration the purports to operation a “waste to energy” business.
Revenge Designs, a Nevada corporation located in Decatur, Ind., purporting to develop modification packages for cars.
Click here to read the SEC complaint.
assets.bizjournals.com
southflorida.bizjournals.com |
