U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23575 / June 21, 2016
Securities and Exchange Commission v. Hemp, Inc., et al., No. 2:16-cv-1413 (D. Nev. June 20, 2016)
SEC Charges Issuer, its CEO, and His Associates with Engaging in a Fraudulent Scheme to Evade the Registration Provisions of Section 5 of the Securities Act of 1933
The Securities and Exchange Commission on June 20, 2016, charged Las Vegas-based issuer Hemp, Inc.; its CEO, Bruce Perlowin; Bruce's friend, Barry Epling; Bruce's brother, Jed Perlowin; and certain other private companies with engaging in a long-running fraudulent scheme to evade the registration provisions of Section 5 of the Securities Act of 1933 in connection with securities issued by Hemp.
According to the SEC's complaint, Bruce Perlowin and his co-defendants sold hundreds of millions of unregistered and purportedly unrestricted Hemp shares to public investors. The execution of this scheme involved, among other things, purported gifts and consulting agreements that do not appear to have been bona fide, the use of nominee companies, and fraudulent statements made to Commission-registered broker-dealers.
The SEC's complaint charges Hemp, Inc., Bruce Perlowin, Epling, Jed Perlowin, and private companies owned by Epling or Jed Perlowin with violating the registration provisions of Section 5 of the Securities Act of 1933 and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctions, financial penalties, disgorgement of ill-gotten gains plus interest against all defendants, and officer-and-director bars against Bruce Perlowin and Epling.
The SEC's investigation was conducted by James J. Thibodeau and supervised by Richard R. Best of the SEC's Salt Lake Regional Office. The SEC's litigation will be led by Amy J. Oliver.