SEC Charges California Biotechnology Company for Fraudulent Stock Scheme
FOR IMMEDIATE RELEASE
Washington, D.C., Sept. 25, 2008 — The Securities and Exchange Commission today charged Rancho Cordova, Calif.-based Telomolecular Corp. and two of its former executives for their roles in a stock scheme based on false claims to investors that the biotechnology start-up company was on the verge of financial and scientific success in developing anti-aging treatments and cancer cures.
The SEC alleges that Telomolecular and its founder and former CEO, Matthew A. Sarad of Folsom, Calif., induced hundreds of investors nationwide to purchase $6.5 million worth of shares of Telomolecular stock. According to the SEC's complaint, Telomolecular and Sarad falsely claimed the company was backed by a deep management and scientific team, generating significant industry interest in its technologies, and prepared to obtain financing from substantial institutions. Instead, the complaint alleges that the company lacked the management professionals and extensive scientific staff it claimed, the supposed interest in its technologies did not exist, and the potential source of financing it touted was a sole proprietorship with no assets.
"Companies raising capital from investors need to provide realistic and accurate information about their resources and prospects for future success," said Marc Fagel, Director of the SEC's San Francisco Regional Office.
The SEC also charged Telomolecular's former Director of Investor Relations, Jeremy D. Jobe of Dallas for his role in the stock sales. The SEC's complaint, filed in federal district court in Sacramento, further alleges that Jobe improperly sold approximately $2.5 million in Telomolecular stock to investors without being registered as a broker.
Without admitting or denying the SEC's allegations, Telomolecular, Sarad and Jobe have agreed to settle the SEC's charges.
Sarad has consented to being enjoined from future violations of the antifraud and registration provisions of the federal securities laws, and has agreed to pay a $100,000 penalty and be barred from serving as an officer or director of a public company for five years. Jobe has consented to an injunction against future violations of registration provisions and to an administrative order barring him from association with a securities broker or dealer for three years. Telomolecular, in addition to injunctive relief, has consented to an administrative order revoking the registration of its securities.
# # #
For more information, contact:
Regional Director, SEC's San Francisco Regional Office
Michael S. Dicke
Associate Regional Director, SEC's San Francisco Regional Office