SEC Obtains Preliminary Injunction Against Defendants Charged with Engaging in a Scam Involving Purported High-Tech Products
Litigation Release No. 24223 / August 3, 2018
Securities and Exchange Commission v. Moddha Interactive, Inc., Marianne Veronika Sandor, Edward Michael Porrazzo, and Spar Street, No. 18-civ-00264 (D. Haw. filed July 9, 2018)
The Securities and Exchange Commission has obtained a preliminary injunction and continued asset freeze against Marianne Veronika Sandor, her husband Edward Michael Porrazzo, their company, Moddha Interactive, Inc., and Spar Street, who was an unregistered sales agent of Moddha Interactive.
The SEC charged Sandor, Porrazzo, and Moddha Interactive on July 9, 2018, alleging that they conducted an offering fraud involving a purported valuable portfolio of patents for a supposed 3D technology that could be used with tablet devices. The complaint alleges that Sandor and Porrazzo stole hundreds of thousands of dollars in investor funds to support their lifestyle, and that Moddha Interactive paid over $200,000 in sales commissions to Spar Street, who illegally sold Moddha Interactive's shares to investors. The SEC's emergency action stopped the ongoing offering fraud.
The preliminary injunction and continued asset freeze order, entered on July 25, 2018 by the Honorable Derrick K. Watson of the U.S. District Court for the District of Hawaii, preliminarily prohibited:
- Sandor, Porrazzo and Moddha Interactive from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder
- Street from violating the broker registration provisions of Section 15(a) of the Exchange Act
- All defendants from directly or indirectly participating in the issuance, purchase, offer, or sale of any unregistered securities offering.
The court's preliminary injunctions will remain in effect until the conclusion of the litigation.
The SEC encourages investors to check the backgrounds of people selling them investments by using the SEC's Investor.gov website to quickly identify whether the sellers are registered professionals.