SEC Charges Purported CBD Company and Former CEO for False Statements
Aug. 9, 2019
File No. 3- 19328
August 9, 2019 - The Securities and Exchange Commission today announced a settled administrative cease-and-desist proceeding against Corix Bioscience, Inc., a Wyoming company headquartered in Phoenix, Arizona, and its former CEO, Michael Ogburn, of Mission Viejo, California, for fraudulently misrepresenting Corix's purported operations in the cannabidiol ("CBD") industry.
According to the SEC order, from March 2017 through April 2018, Corix and Ogburn made several false and misleading public statements, including claims that Corix had access to Native American tribal lands to grow hemp, had research relationships with well-known academic, medical, and sports institutions, had obtained state approval to produce and process hemp in Nevada, and had harvested hemp for sale. The order states that, in fact, Corix had extremely limited operations, and none of these statements were true.
The SEC order found that Corix and Ogburn willfully violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The order also found that Corix willfully violated, and Ogburn willfully aided, abetted and caused Corix to violate, the registration and reporting provisions of Section 15(d) of the Exchange Act and Rules 12b-20, 15d-1, and 15d-11 thereunder. The order requires Corix and Ogburn to cease and desist from violations of these provisions, requires Ogburn to pay a $200,000 civil penalty, bars Ogburn from serving as an officer or director of a public company for five years and from participating in the issuance of any penny stock. Corix and Ogburn consented to entry of the order.
The SEC's investigation was conducted by Ty Cottrill and Anne Romero, with assistance from Judy Bizu, in the Denver Regional Office. Laura Metcalfe supervised the investigation.