Securities and Exchange Commission v. Jason R. Rosenthal
(United States District Court for the District of Massachusetts 99CV11010GAO)
The Securities and Exchange Commission ("Commission") announced the filing of a complaint against Jason R. Rosenthal ("Rosenthal"), a resident of Dunedin, Florida and a former resident of Gloucester, Massachusetts, charging him with violating the antifraud and registration provisions of the federal securities laws in connection with a fraudulent offering of unregistered securities on the Internet. The Commission's Complaint alleges that since at least November 1998, Rosenthal used the Internet to solicit investors to purchase unregistered securities in entities formed to purchase and operate franchises which would sell and support software for operating commercial websites. The securities were issued by a company known as VentureLink Capital Corporation or one of its affiliates. According to the Complaint, Rosenthal's Internet solicitations falsely projected investment returns of 500% to 2000% within two years, and misrepresented the investment as an opportunity to invest in a company that had obtained millions of dollars of start-up capital from the same venture capitalists who had provided the initial capital for Microsoft and Intel. Further, Rosenthal misled investors to believe that the entities in which they would be investing were planning an initial public offering that would generate substantial profits for investors. The Commission alleges that Rosenthal's solicitations yielded investments from three investors, totalling $50,000, and commissions to Rosenthal in the amount of $5,000. Rosenthal was not registered with the Commission as a broker-dealer, nor was he associated with any broker-dealer registered with the Commission.
The Complaint, which was filed in the United States District Court for the District of Massachusetts, alleges that Rosenthal violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. In its Complaint, the Commission is seeking a permanent injunction prohibiting Rosenthal from further violations of the antifraud and registration provisions of the federal securities laws, disgorgement of Rosenthal's ill-gotten gains plus prejudgment interest thereon, and a civil monetary penalty in an amount to be determined by the Court.
The investigation into this matter is continuing.