Legal
Virginia Sourlis

Attorney Sourlis Accepts Five-year Ban in Share Registration Fraud Case

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Reverse merger attorney Virginia Sourlis has agreed to a five year bar from practicing securities law in a settlement after the SEC found her liable for fraud for playing a key role Greenstone Holdings’ hawking of over 6 million unregistered shares. The SEC originally proposed to ban Sourlis in February after the agency claimed she had made false statements regarding the company’s issuance of promissory notes, its note holders, and conversations with investors that the agency’s investigators found to not exist. Sourlis was denied a hearing to appeal the decision, and in July settled for a five-year ban from the SEC with the right to re-apply after the five years had concluded. In the complaint filed in February of last year, the SEC accused Sourlis of writing a Jan. 11, 2006 opinion letter falsely claiming that 12.3 million Greenstone shares could be converted from convertible notes and issued without restriction.

Legal

Court Says JBI Cooked Books before PIPE Offerings

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Serial PIPE issuer JBI Inc. (JBII) and founder John Bordynuik massively inflated the value of assets and then used fraudulent financials to obtain over $8 million from PIPE investors, according to a judgment obtained by the Securities and Exchange Commission. The commission filed the case this January in a Boston U.S. District Court. JBI raised over $40 million since 2009 in eight PIPE transactions, including transactions in 2009 when the company was known as 310 Holdings (TRTN). JBI formed from the acquisition of shell 310 Holdings in 2009. Investors in the PIPEs were almost never disclosed.

Legal
IMGGQ

Imaging3 Lied about FDA Disapproval, SEC Says

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Imaging3 (IMGGQ) management concealed negative FDA information from investors, according to a lawsuit filed by the Securities and Exchange Commission. In a November 2010 conference call, the SEC alleges, the company's CEO Dean Janes  avoided discussing serious FDA criticisms that were later disclosed in 2011 by an investor who obtained a copy of the Oct. 22, 2010 FDA letter and posted it on his blog. Imaging3 is a Burbank, Calif.-based medical imaging device maker that filed for Chapter 11 bankruptcy protection in September 2012. The conference call took place on Nov.

Legal

China MediaExpress Charged with Fraudulent Financial Reporting by SEC

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The Securities and Exchange Commission is charging China-based reverse merger company China MediaExpress (CMEE) and its CEO with fraudulently misleading investors about its financial condition. China MediaExpress claimed that their cash balances were millions of dollars higher than actual amounts. The charges come more than two years after reports in the financial media and from short-biased research firms began suggesting the company, once named by Forbes China as the country's top "up-and-comer," was actually a massive fraud. China MediaExpress operates a television advertising network on airport express and inner-city public transit. The June 20 complaint charges CEO Zheng Cheng and China MediaExpress with violations of multiple antifraud provisions of federal securities laws, which could result in financial penalties, permanent injunctions, disgorgement, and an officer and director bar against Zheng.