UNITED STATES SECURITIES AND EXCHANGE COMMISSION v. CICCONE et al

On September 29, 2021, the United States Securities and Exchange Commission (“SEC” or “Plaintiff”), represented by Leslie J. Hughes, attorney at SEC’s Denver regional office, filed a civil enforcement action against Gregory A. Ciccone and Platinum Travel and Entertainment L.L.C. (“Platinum”) (collectively, “Defendants”) and Platinum Enterprises & Concierge Services, Inc. (“Platinum Enterprises”) (“Relief Defendant”), seeking injunctive relief, civil money penalties, and disgorgement of all ill-gotten gains along with prejudgment interest for the alleged defraud committed by Defendants. This case was filed in the U.S. District Court in the District of New Jersey with Judges Claire C. Cecchi and Andre M. Espinosa presiding.

In the complaint Plaintiff alleged that, “Defendant Gregory A. Ciccone, a convicted felon acting through his company, Platinum defrauded investors out of over $1.5 million. From July 2018 through February 2020 (the “Relevant Period”), Ciccone and Platinum offered and sold promissory notes to investors for the purported purpose of securing hotel reservations as part of Platinum’s luxury travel business. Ciccone and Platinum told investors that Platinum was a successful business that reserved blocks of rooms at luxury hotels and resold the reservations at a profit, from which investors would be repaid principal and interest on their notes.”

Plaintiff further alleged that, “Rather than use investor money in connection with Platinum’s luxury travel business as he had promised, Ciccone misappropriated the vast majority of the money and used much of the remainder to make Ponzi-like payments. Ciccone initially solicited investors directly and later recruited an acquaintance (referred to here as “Sales Agent 1”) to solicit investors in Platinum. Ciccone told Sales Agent 1 his phony story about his successful, luxury travel business with the knowledge and expectation that Sales Agent 1 would disseminate those false and misleading statements to prospective investors. Ciccone never disclosed to investors that he was looting the money raised.”

Plaintiff also alleged that, “From August through September 2019, Ciccone directed investors who purchased promissory notes from Platinum to transfer their funds to bank accounts held in the name of Platinum Enterprises & Concierge Services, Inc. (“Platinum Enterprises”), an entity he controlled. Platinum Enterprises provided no consideration for receipt of the investors’ funds and was unjustly enriched.”

There are five claims for relief laid down by Plaintiff. The first claim deals with the alleged fraud—Section 10(b) of the Exchange and Rule 10b-5 thereunder. The second claim deals with alleged fraud – violations of Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder as Prohibited by Section 20(b) of the Exchange Act. The third claim deals with alleged fraud – Section 17(a) of the Securities Act. The fourth claim deals with the alleged offer and sale of unregistered Securities – Section 5(a) and (c) of the Securities Act. The fifth claim deals with the alleged disgorgement from Relief Defendant – Section 6501 of the National Defense Authorization Act for Fiscal Year 2021, Pub. L. No. 116-283 and Equitable Principles.

In its prayer for relief Plaintiff has requested the court for an injunction permanently restraining and enjoining Ciccone from participating in the issuance, purchase, offer, or sale of any security. Plaintiff also requested the court to order Defendants and Relief Defendants to disgorge all ill-gotten gains, together with pre-judgment interest, and order Defendants to pay civil money penalties pursuant to Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act.

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