The Securities and Exchange Commission has charged Vuuzle Media Corporation, a purported online live streaming and entertainment company, and its founder Ronald Shane Flynn (a.k.a. Ronnie Shane) with fraudulently offering over $14 million in securities to investors across the United States using an aggressive boiler room sales scheme.
The SEC’s complaint alleges that between 2016 and 2020, Vuuzle and Flynn raised more than $14 million from individual investors using a boiler room of salespeople employing high-pressure tactics, based primarily in the Philippines.
According to the complaint, Vuuzle and Flynn promised investors that Vuuzle was a legitimate and growing company and a “pre-IPO” investment opportunity when in fact Vuuzle has never made a profit and has never made a public offering on any stock exchange. As alleged, only a small fraction of investor funds went towards the online streaming business.
The complaint further alleges that Flynn misappropriated $4.9 million of investor funds for his personal use, including by using it to pay for jewelry, luxury flights and hotel stays, subscriptions to dating websites, and nightclub visits. Vuuzle and Flynn also allegedly used at least $5.5 million of investor funds to sustain the boiler room and pay commissions to Flynn and others for recruiting investors.
The complaint also charged Richard Marchitto with aiding and abetting Flynn and Vuuzle’s fraud by allegedly acting as their U.S. corporate and financial presence and maintaining a U.S. bank account, corporate credit cards, and a New York office address for Vuuzle.
“We are committed to taking action to protect investors and pursuing relief for those who have been harmed,” said Melissa Hodgman, acting director of the SEC’s Division of Enforcement. “We will vigorously pursue fraudsters who enrich themselves at investors’ expense.”
“The defendants allegedly raised millions of dollars from investors through aggressive and deceptive sales techniques, and misappropriated the majority of those funds for personal use and to fund the boiler room operation,” said Jennifer S. Leete, Associate Director in the SEC’s Division of Enforcement. “Investors should be on alert for red flags of investor fraud such as unsolicited calls and high pressure sales tactics.”
The complaint, filed in federal court in the District of New Jersey, charges Vuuzle and Flynn with violating the antifraud and registration provisions of the federal securities laws, and Marchitto with aiding and abetting Vuuzle and Flynn’s violations. The SEC seeks permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties against each defendant.
The SEC’s Office of Investor Education and Advocacy has issued investor alerts on the red flags of investment fraud. Additional information is available on Investor.gov.
The SEC’s investigation was conducted by Devon Staren and Drew Grossman and was supervised by Stacy Bogert. The SEC’s litigation is being led by Ms. Staren and Daniel Maher under the supervision of Stephan Schlegelmilch. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Central District of California and the Federal Bureau of Investigation.