U. S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21779 / December 15, 2010
SEC v. Marcus Luna, Nathan Montgomery, Adam Daskivich, David Murtha, St. Paul Venture Fund LLC, Minnesota Venture Capital, Inc., Real Estate of Minnesota, Inc., Matrix Venture Capital, Inc., Civil Case No.10-CV-02166, USDC NV
SEC CHARGES NEVADA SECURITIES LAWYER AND ASSOCIATES FOR ROLES IN REGISTRATION AND FRAUD VIOLATIONS
On December 14, 2010, the Securities and Exchange Commission filed a civil action in the U.S. District Court of Nevada charging Marcus Luna, Nathan Montgomery, Adam Daskivich, David Murtha, St. Paul Venture Fund LLC ("St. Paul VF"), Minnesota Venture Capital, Inc. ("Minnesota VC"), Real Estate of Minnesota, Inc. ("Real Estate MN") and Matrix Venture Capital, Inc. ("Matrix VC") for their roles in a multi-million dollar scheme and for selling shares of Axis Technologies Group, Inc. stock in a public distribution without registration with the Commission.
The Commission's complaint alleges that:
Luna drafted and issued a legal opinion letter to a transfer agent that falsely stated the shares of Axis were unrestricted because they were issued pursuant to a valid exemption from registration under Rule 504 of Regulation D.
Luna further misrepresented that St. Paul VF, Minnesota VC, Real Estate MN and Matrix VC were accredited investors in Minnesota, and claimed that Minnesota state law permitted an exemption allowing accredited investors to purchase unrestricted shares from Axis.
These entities were not accredited investors, and moreover were simply conduits for distribution of the stock to the public. Soon after these alleged accredited investors received their shares, they transferred shares to promoters and sold the remaining shares to the public.
Luna, Montgomery, Daskivich and Murtha received profits totaling $6.88 million from St. Paul VF, Minnesota VC, Real Estate MN and Matrix VC sales of their shares of Axis stock.
The Commission's complaint alleges that Luna 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 and Rule 10b-5 thereunder, and Luna, Montgomery, Daskivich, Murtha and their entities violated the registration provisions of Sections 5(a) and 5(c) of the Securities Act. The Commission's complaint seeks from Montgomery, Daskivich, Murtha, St. Paul VF, Minnesota VC, Real Estate MN and Matrix VC: (1) a permanent injunction; (2) disgorgement of profits, including prejudgment interest; (3) a civil penalty; and (4) a penny stock bar. In addition, as to Luna, it seeks an order prohibiting Luna from providing professional legal services to any person in connection with the offer or sale of securities pursuant to, or claiming, an exemption under Regulation D, including, without limitation, participating in the preparation or issuance of any opinion letter related to such offerings.
The Commission acknowledges the assistance of the Financial Industry Regulatory Authority.
See Also: SEC Complaint