The Securities and Exchange Commission on Friday charged two men with engaging in fraud and acting as unregistered brokers in connection with the securities offerings of at least two issuers, US Lighting Group (USLG) and Petroteq Energy (PQEFF).
The companies did not immediately respond to requests for comment Monday.
According to the SEC’s complaint, filed in U.S. District Court for the Northern District of Ohio Eastern Division in Cleveland, Jason Allan Arthur of Nevada and Christopher Joseph Bongiorno of Ohio used aliases to convince USLG management that they held the requisite securities licenses to engage in investor solicitations.
However, neither of them registered with the SEC as brokers or dealers, nor were they associated with a broker of dealer registered with the SEC, the complaint said.
From September 2015 through November 2018, Arthur and Bongiorno allegedly solicited individual investors throughout the United States to invest in securities issued by the two firms.
The complaint alleges that, operating under their aliases, Arthur and Bongiorno used lead lists to cold call prospective investors and hired others to work below them to solicit investors to buy USLG or PQEFF securities.
“To obfuscate their receipt of commissions, Arthur and Bongiorno allegedly submitted misleading invoices” to the two companies, the SEC said Monday while announcing their complaint.
Arthur and Bongiorno allegedly received commissions of 35% to 50% of investor funds, totaling at least $1.17 million and $2.36 million, respectively, the SEC claimed.
While Arthur lied to an investor about his compensation, Bongiorno misappropriated investor funds, according to the complaint.