Efoora, Inc. Partners Holding, LLC, David S. Grosky and Melvin S. Dokich


Litigation Release No. 19752 / July 3, 2006

SEC v. Efoora, Inc. Partners Holding, LLC, David S. Grosky and Melvin S. Dokich, Civil Action No. 06 C 3526 (N.D. Ill. filed June 29, 2006)

SEC Charges Efoora, Inc., Its Former CEO and Another Individual for Their Roles in an Unregistered, Fraudulent Offering

On June 29, the Securities and Exchange Commission ("Commission") filed a complaint in the Northern District of Illinois, charging Efoora, Inc., based in Buffalo Grove, David S. Grosky, its former CEO and a resident of Highland Park, and Partners Holding, LLC, a company controlled by Grosky, with participating in an unregistered and fraudulent offering of Efoora stock. The complaint charges another Efoora employee, Melvin S. Dokich, with participating in the unregistered offering and seeks an order requiring two of Grosky's relatives to return money that they received from Partners Holding.

The complaint alleged the following: From at least January 2000 through at least April 2006, Efoora raised approximately $40 million by selling over 100 million shares of its stock to about 5,000 investors. Its offering was not registered with the Commission as required by the federal securities laws. Efoora, through a network of "finders" that included Partners Holding, also solicited investors by making a series of false or misleading statements about Efoora's business, including, among other things, the amount of offering proceeds it paid to its finders and that it would be receiving FDA approval for its HIV Rapid Test and conducting an IPO by certain dates. Partners Holding was not registered as a broker or dealer at the time its salespersons sold shares of Efoora stock. Grosky drafted or approved Efoora's false or misleading offering materials and controls Partners Holding. Grosky and Dokich also improperly sold Efoora stock issued in their names directly to the general public. Grosky received approximately $1 million from Efoora, Partners Holding and investors.

Without admitting or denying the allegations of the complaint, Efoora, Partners Holding, Grosky and Dokich consented to the entry of orders preliminarily enjoining them from violating the registration provisions of the securities laws, Sections 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act"), enjoining Partners Holding from violating the antifraud and broker dealer registration provisions of the securities laws, Sections 17(a) of the Securities Act, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and enjoining Grosky from aiding and abetting Partners Holding's broker dealer registration violations. The orders also provide for, among other things, a freeze on the assets of Partners Holding and Grosky, a freeze on Efoora's intellectual property assets, and a freeze on certain assets of Grosky's relatives.

Grosky and Dokich were indicted on May 17 in a parallel criminal proceeding. The Commission acknowledges the assistance of the U.S. Attorney's Office for the Northern District of Illinois, the Federal Bureau of Investigation, the United States Postal Service, and the Illinois Securities Department.

SEC Complaint in this matter


Last Reviewed or Updated: June 27, 2023