U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20745 / September 25, 2008
Securities and Exchange Commission v. Matthew A. Sarad, Jeremy D. Jobe, and Telomolecular Corp., Case No. 2:08-cv-02252-GEB-DAD (E.D. Cal. filed Sept. 25, 2008)
SEC Charges California Biotechnology Company for Fraudulent Stock Scheme
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.
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 Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, 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 Sections 5(a) and 5(c) of the Securities Act and Section 15(a) of the Exchange Act, and to an administrative order barring him from association with a securities broker or dealer for three years. Telomolecular has consented to an injunction against future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5, and to an administrative order revoking the registration of its securities under Section 12(g) of the Exchange Act.