This case was last updated from PACER on 09/28/2021 at 06:33:38 (UTC).

Securities and Exchange Commission v. VerdeGroup Investment Partners, Inc. et al

Case Summary

On September 27, 2021, Securities and Exchange Commission (“SEC” or “Plaintiff”), represented by Michael Raymond Sew Hoy attorney at SEC’s Los Angeles regional office, filed a civil enforcement action against VerdeGroup Investment Partners, Inc. (“VerdeGroup”), Thomas Gaffney (“Gaffney”), Lisa Gordon (“Gordon”) (collectively, ”Defendants”) and Tommy’s Pizza Ventures, Inc. (“Tommy’s Pizza”), Cynthia Gaffney (“Cynthia Gaffney”) (collectively, “relief Defendants”), seeking injunctive relief, civil monetary penalties, and disgorgement of all ill-gotten gains along with prejudgment interest for the alleged securities offering fraud by Defendants. This case was filed in the U.S. District Court in the Central District of California.

 

In the complaint Plaintiff alleged that, “This action involves a securities offering fraud by an issuer and its director and control person that raised over $612,765 from investors located in multiple states from January 2018 through July 2019, ostensibly to finance marijuana businesses. In soliciting investor funds to invest in marijuana businesses, recidivist violator of the securities laws Gaffney who was the principal and control person of VerdeGroup misled and deceived actual and prospective investors about how their monies would be used.”

 

Plaintiff further alleged that, “Rather than receiving money in his own name, Gaffney disguised his role by directing investors to send their funds to a third party account. Investor funds were then used for Gaffney’s personal expenses, and a pizza parlor business, among other things. VerdeGroup and Gaffney misappropriated approximately $467,110 of investor money. Defendants also made material misrepresentations to investors and prospective investors about VerdeGroup’s business partners and its efforts to undertake an initial public offering.”

 

Plaintiff also alleged that, “VerdeGroup and Gaffney used general solicitation to attract investors, including advertisements in newspapers and the use of VerdeGroup’s website, verdegroupinvest.com. Defendant Lisa Gordon, hired by Gaffney to handle VerdeGroup investor relations, acted as an unregistered broker-dealer in connection with the offering and directly offered and sold securities by soliciting investors through phone calls and emails. The securities offering was not registered with the SEC as required by the Securities Act. At least some of the investors were not provided with the information that a registration statement is required to provide for the protection of investors.”

 

There are five claims for relief laid down by Plaintiff. The first claim deals with the alleged unregistered offer and sale of securities in violations of Sections 5(a) and 5(c) of the Securities Act. The second claim deals with the alleged fraud in the offer or sale of securities in violations of Section 17(a) of the Securities Act. The third claim deals with the alleged fraud in connection with the purchase or sale of securities in violation of Section 10(b) of the Exchange Act and Rule 10b-5. The fourth claim deals with the alleged unregistered Broker-Dealer in violation of Section 15(a) of the Exchange Act. The fifth claim deals with the control person liability Section 20(a) of the Exchange Act.

 

In its prayer for relief Plaintiff has requested the court to permanently enjoin Defendants from violating Sections 5(a) and 5(c) of the Securities Act. Plaintiff also requested the court to order Defendants to disgorge all funds received from their illegal conduct along with prejudgment interest, permanently enjoin Gordon from violating Section 15(a) of the Exchange Act, and order Defendants to pay civil penalties under Section 21(d)(3) of the Exchange Act and Section 20(d) of the Securities Act.

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    2:21-CV-07663

  • Filing Date:

    09/27/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

 

Party Details

Plaintiff

Securities and Exchange Commission

Defendants

VerdeGroup Investment Partners, Inc.

Thomas Gaffney

Lisa Gordon

Tommy's Pizza Ventures, Inc.

Cynthia Gaffney

Attorney/Law Firm Details

Plaintiff Attorney

Michael Raymond Sew Hoy

Attorney at Securities and Exchange Commission

444 South Flower Street Suite 900

Los Angeles, CA 90071

 

Court Documents

#3

(#3) Request for Clerk to Issue Summons on Complaint (Attorney Civil Case Opening) #1 filed by Plaintiff Securities and Exchange Commission. (Sew Hoy, Michael) (Entered: 09/27/2021)

#2

(#2) CIVIL COVER SHEET filed by Plaintiff Securities and Exchange Commission. (Sew Hoy, Michael) (Entered: 09/27/2021)

#1

(#1) COMPLAINT No Fee Required - US Government, filed by Plaintiff Securities and Exchange Commission. (Attorney Michael Raymond Sew Hoy added to party Securities and Exchange Commission(pty:pla))(Sew Hoy, Michael) (Entered: 09/27/2021)

 

Docket Entries

  • 09/27/2021
  • View Court Documents
  • Docket(#3) Request for Clerk to Issue Summons on Complaint (Attorney Civil Case Opening) #1 filed by Plaintiff Securities and Exchange Commission. (Sew Hoy, Michael) (Entered: 09/27/2021)

    Read MoreRead Less
  • 09/27/2021
  • View Court Documents
  • Docket(#2) CIVIL COVER SHEET filed by Plaintiff Securities and Exchange Commission. (Sew Hoy, Michael) (Entered: 09/27/2021)

    Read MoreRead Less
  • 09/27/2021
  • View Court Documents
  • Docket(#1) COMPLAINT No Fee Required - US Government, filed by Plaintiff Securities and Exchange Commission. (Attorney Michael Raymond Sew Hoy added to party Securities and Exchange Commission(pty:pla))(Sew Hoy, Michael) (Entered: 09/27/2021)

    Read MoreRead Less