A pair of unlicensed and unregistered brokers scammed investors across the country, raking in millions in commissions, the Securities and Exchange Commission alleges in a new complaint.
Jason Allan Arthur of Nevada and Christopher Joseph Bongiorno of Ohio are charged with engaging in fraud and acting as unregistered brokers in connection with the securities offerings of two issuers, US Lighting Group, Inc. (USLG) and Petroteq Energy, Inc. (PQEFF), the SEC said.
For more than three years, Arthur and Bongiorno allegedly solicited individual investors throughout the United States to invest in securities issued by USLG and PQEFF, the complaint said.
Arthur and Bongiorno received commissions of 35% to 50% of investor funds, the SEC alleged, totaling at least $1,174,057.10 and $2,356,358.91, respectively.
Alleged Fake Names Used
According to the SEC complaint filed with the U.S. District Court for the Northern District of Ohio, Arthur and Bongiorno both met USLG CEO Paul Spivak at separate times and gave him fake names. The men encouraged Spivak to check the names on Brokercheck as a way of performing a background check.
After Spivak found the fake names existed in Brokercheck, he hired the men to solicit investors to buy USLG securites, the complaint said.
Arthur and Bongiorno cold-called leads and pitched them the value of investing in USLG, a Florida corporation. Sales generated the men 40% to 50% commissions, the SEC said.
Arthur and Bongiorno were also hired by PQEFF to engage in similar investor solicitation activities as part of a securities offering conducted by PQEFF, a Canadian corporation headquartered in Sherman Oaks, Calif., the complaint said.
"In at least two instances, Bongiorno directed investors to send their investment funds to North Star Assets LLC, an entity that Bongiorno controls," the SEC wrote.
PQEFF paid Arthur and Bongiorno transaction-based compensation or commissions averaging 39% of investor proceeds, the complaint said. The pair also hired others to work under them and solicit investors, using Craigslist to find candidates, according to the complaint.
The SEC is asking the court to bar Arthur and Bongiorno from selling securities, require them to forfeit "ill-gotten gains or unjust enrichment," and add a civil penalty.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org. Follow him on Twitter @INNJohnH.
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