Fraud In a "Solar Farm" Penny Stock Scheme

July 29th, 2014
in econ_news

from the Securities and Exchange Commission

The Securities and Exchange Commission today announced fraud charges against a penny stock company and its CEO linked to a scam artist whom the agency separately charged earlier this month.

Follow up:

The SEC alleges that MSGI Technology Solutions and its CEO J. Jeremy Barbera defrauded investors by touting a joint venture to develop and manage solar energy farms across the country on land purportedly owned by an electricity provider operated by Christopher Plummer. Barbera and Plummer co-authored press releases falsely portraying MSGI as a successful renewable energy company on the brink of profitable solar energy projects. However, MSGI had no operations, customers, or revenue at the time, and Plummer’s company did not actually possess any of the assets or financing needed to develop the purported solar energy farms.

The SEC previously charged Plummer and a different penny stock company and CEO that similarly issued false press releases depicting a thriving business that in reality was struggling financially.

Barbera and MSGI agreed to settle the SEC’s charges. Said Sanjay Wadhwa, senior associate director of the SEC’s New York Regional Office:

It is vital that information disseminated by a company into the marketplace be corroborated and truthful. Barbera caused MSGI to issue press releases baselessly touting nonexistent assets and phony business opportunities, which had the harmful effect of misleading investors.

According to the SEC’s complaint filed in federal court in Manhattan, in addition to co-authoring misleading press releases with Plummer, Barbera himself made other material misstatements about MSGI’s operations. For example, he described MSGI in press releases and on its website as an operational security company with customers all over the world, despite the fact that MSGI had long lacked the financial means to manufacture any security products on a commercial scale. Barbera also falsely claimed in press releases that another sham entity operated by Plummer had purchased MSGI’s sizable outstanding debt, and he falsely touted nonexistent solar energy projects with an entity unrelated to Plummer.

The SEC’s complaint charges Barbera and MSGI with violating antifraud provisions of the federal securities laws. The defendants have consented to the entry of final judgments permanently enjoining them from future violations of the antifraud provisions. Barbera has agreed to pay a $100,000 penalty and be permanently barred from acting as an officer or director of a public company or from participating in a penny stock offering. Barbera and MSGI neither admitted nor denied the charges. The settlement is subject to court approval.

The SEC’s investigation has been conducted by Justin P. Smith and George N. Stepaniuk of the New York office and supervised by Sanjay Wadhwa. The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Connecticut and the Federal Bureau of Investigation.

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