SEC Charges 10 Microcap Companies

Washington D.C., May 16, 2023 — The Securities and Exchange Commission (SEC) has announced charges against 10 microcap companies for violating securities offering registration requirements. These companies conducted unregistered offerings without complying with Regulation A, which grants a limited exemption from registration under the Securities Act, enabling companies to raise funds from the public while meeting specific criteria.

According to the SEC’s orders, between December 2019 and May 2022, each of the 10 microcap companies received qualification from the SEC for their securities offerings using Regulation A. However, they subsequently made significant changes to their offerings without fulfilling the requirements of the exemption. These changes included unauthorized increases in the number or price of shares offered, failure to file updated financial statements for ongoing offerings, engaging in prohibited at-the-market offerings, or prohibited delayed offerings. Consequently, these microcap companies violated the registration provisions of the offering.

Director of the SEC’s Chicago Regional Office, Daniel R. Gregus, emphasized that companies choosing to utilize Regulation A for cost-effective capital raising must adhere to its requirements. He stated, “These actions stand as a reminder that companies which choose to circumvent Regulation A’s requirements by engaging in prohibited conduct or making fundamental changes to their offerings without qualification will face action by the SEC.”

In response to the charges, each of the 10 microcap companies has agreed to cease and desist from Section 5 violations of the Securities Act and pay civil penalties as follows:

  1. CW Petroleum Corp. – $5,000
  2. DNA Brands Inc. – $10,000
  3. Graystone Company Inc. – $25,000
  4. Green Stream Holdings Inc. – $75,000
  5. Hemp Naturals Inc. – $50,000
  6. LiveWire Ergogenics Inc. – $50,000
  7. Principal Solar Inc. – $40,000
  8. SFLMaven Corp. – $25,000
  9. The Marquie Group Inc. – $10,000
  10. Verde Bio Holdings Inc. – $90,000

The SEC’s investigations were carried out by the Chicago Regional Office and the Los Angeles Regional Office, with assistance from the Division of Examinations and Division of Corporation Finance.

News Source : US Security and Exchange commission

By Joshi

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