Legal
NIR Group

NIR Head Says Good Intentions Paved Way to Wrongdoing

By |

Some of the very misdeeds NIR Group chief Corey Ribotsky stands accused of in the bankruptcy of his AJW funds show that he had the funds' best interest in mind, according to documents his attorneys filed in a bankruptcy case. "Indeed, the liquidators' complaint is replete with factual allegations in which the liquidators concede that defendants' conduct served to benefit the AJW funds primarily by representing the appearance of a successful fund, an thereby maintaining its continued success," the filing says. The funds imploded and, the Securities and Exchange Commission is suing Ribotsky for misleading investors, inaccurately valuing investments and conducting sham transactions to hide losses. The suit was filed in March of this year by AJW liquidators PwC Corporate Finance and Recovery in the New York State Supreme Court. The liquidators had already obtained Chapter 15 status from a U.S. District Court in February.

Legal

Court Says JBI Cooked Books before PIPE Offerings

By |

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

By |

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
Peter Siris

PIPE, Reverse Merger Cases Featured in SEC Whistleblower Eligibility List

By |

PIPE issuers and reverse merger companies are among parties named in a list of Securities and Exchange Commission enforcement actions that could earn cash rewards for whistleblowers. The list also includes an action against parties who allegedly reaped millions of dollars of illegal profits through improper sales of shares in a micro-cap company with negligible prospects. The Securities and Exchange Commission's Office of the Whistleblower published the list, which tracks enforcements where monetary sanctions exceed $1 million. "Subject to the Final Rules, individuals who voluntarily provided the Commission with original information after July 21, 2010 that led to the successful enforcement of a covered action listed below are eligible to apply for a whistleblower award," the commission's website says. It remains to be seen whether individuals will come forward to seek rewards.