U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23887 / July 26, 2017
Securities and Exchange Commission v. John Anthony Giunti and Interactive Media Solutions, LLC, No. 3:17-cv-01504-BEN-BLM (S.D. Cal. filed July 25, 2017)
SEC Charges San Diego Businessman in Offering Fraud
On July 25, 2017, the Securities and Exchange Commission charged Interactive Media Solutions, LLC and its sole principal John Anthony Giunti with perpetuating a securities offering fraud.
According to the SEC's complaint, IMS claimed to have developed a mobile phone application that could send money from a cellphone. The complaint alleges that from July 2015 through November 2016, IMS and Giunti raised nearly half a million dollars from more than 20 investors and had plans to raise an additional $5 million with hopes of a possible IPO. To lure investors, Giunti allegedly told them that investor funds would be spent for business purposes, IMS had positive cash flow, and IMS had a business partnership with Google and offices at its Los Angeles location. The SEC alleges that all of these statements were false. In reality, as alleged in the complaint, instead of using investor funds as represented for business purposes, IMS and Giunti used investor funds for Giunti's retail purchases, large cash withdrawals, private-school tuition for his children, luxury vacations, and political contributions. Moreover, IMS allegedly had no revenue from operations, nor did it have any connection with Google. Rather, as alleged in the complaint, IMS was based at Giunti's home and a San Diego business center.
The SEC's complaint, filed in the U.S. District Court for the Southern District of California, charges IMS and Giunti with violating 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. Without admitting or denying the allegations in the SEC's complaint, IMS and Giunti consented to the entry of a final judgment that permanently enjoins them from violating the charged provisions of the federal securities laws, orders them to jointly and severally disgorge ill-gotten gains of $457,960 plus pre-judgment interest of $25,053, orders Giunti to pay a civil penalty of $457,960, and prohibits Giunti from serving as an officer or director of a public company or from raising money from investors in any securities offering. The proposed settlement is subject to approval by the court.
The SEC's investigation was conducted by Janet Rich Weissman and supervised by Ansu N. Banerjee.