HempAmericana, GenCap Management, Alexander Dillon, Cosmin Panait

A Story by console

The complaint asserts that HempAmericana misled investors regarding the use of offering proceeds, while other co-defendants funded promotions of HempAmericana's stock without disclosing GPL Ventures.

In a recent announcement, the U.S. Securities and Exchange Commission (SEC) has unveiled a significant enforcement action against a network of entities and individuals allegedly involved in a penny stock fraud scheme. The charges underscore the SEC's commitment to safeguarding investors and maintaining the integrity of the financial markets.

The SEC's actions were unveiled through a complaint filed in the United States District Court for the Southern District of New York. The agency has charged an issuer, its CEO, and six other entities and individuals with engaging in fraudulent activities aimed at manipulating the market and deceiving investors. The SEC also revealed that certain participants in the scheme were operating as unregistered dealers, compounding their violations of securities regulations.

The case centers around GPL Ventures, which is alleged to have purchased over 1.5 billion shares of HempAmericana Inc. stock through a Regulation A offering. Under the guise of this offering, GPL Ventures reportedly engaged in secretive stock promotions, intending to offload its HempAmericana shares at a profit. The complaint asserts that HempAmericana misled investors regarding the use of offering proceeds, while other co-defendants funded promotions of HempAmericana's stock without disclosing GPL Ventures' involvement.

The SEC's investigation further revealed that the defendants collectively profited approximately $11 million through this fraudulent scheme. Their deceptive practices violated antifraud provisions of federal securities laws. The SEC has since sought restitution of ill-gotten gains, civil penalties, injunctive relief, and restrictions on certain defendants' activities in the securities markets.

Highlighting the severity of the situation, Richard R. Best, Director of the SEC's New York Regional Office, stated, "Investors are entitled to accurate and complete information about how proceeds from Regulation A offerings will be used, and the identity and intent of people funding stock promotions." This sentiment underscores the SEC's unwavering dedication to ensuring transparency and protecting investors' interests in a fair and equitable market.

The SEC's actions did not stop at addressing the penny stock fraud scheme. The complaint also exposed GPL Ventures' owners, Alexander Dillon and Cosmin Panait, [both of them now runs GenCap Management] for falsely representing to their brokers that GPL Ventures was not involved in any stock promotions related to the shares they were depositing and selling.

The investigation unveiled that GPL Ventures, along with affiliate GPL Management LLC, Alexander Dillon, and Panait, were operating as unregistered securities dealers. These entities had reportedly obtained discounted stock in more than 140 microcap issuers and profited by reselling the stock to the public.

The SEC's regulatory vigilance did not end with the filing of the complaint. In light of the ongoing misconduct, the agency took swift action by obtaining an order restraining the defendants and freezing their assets. The SEC's continued oversight demonstrates its dedication to stemming deceptive practices and protecting investors from potential harm.

The investigation is ongoing, and the SEC's pursuit of justice in this case is being led by a team of diligent professionals, including Brenda Chang, John Lehmann, Peter Lamore, and Adam Grace. The litigation efforts are being spearheaded by Paul Gizzi, Ms. Chang, and Mr. Lehmann of the New York Regional Office, with oversight from Sanjay Wadhwa.

The SEC has acknowledged the cooperation and support of the Financial Industry Regulatory Authority (FINRA) in this matter, highlighting the importance of collaboration among regulatory bodies to ensure the integrity of the financial markets.

As the case unfolds, the SEC's actions stand as a reminder of the agency's commitment to pursuing those who manipulate the markets and defraud investors. This enforcement action serves as a clear signal that deceptive practices will not go unchecked, and that the SEC remains a steadfast guardian of investors' rights and market fairness.