SEC Charges New Jersey Man with Fraud in Selling Online Gaming Company Stock
Litigation Release No. 24248 / August 28, 2018
Securities and Exchange Commission v. Sandy J. Masselli, Jr. et al., No. 18-cv-13269 (D.N.J.)
The Securities and Exchange Commission today announced charges against Sandy J. Masselli, Jr. and several associated entities, including Carlyle Gaming & Entertainment Ltd. and Carlyle Entertainment Ltd., for perpetrating a securities fraud that enabled Masselli to misappropriate retail investor funds for his personal use.
The SEC's complaint alleges that Masselli, who was chairman and CEO of the Carlyle entities, raised approximately $3 million from investors from 2012 through 2017. As part of the scheme, Masselli allegedly sold certain investors stock in the Carlyle entities, which were purportedly engaged in online gaming, by falsely claiming that the companies were on the verge of conducting a lucrative initial public offering (IPO) and were soon to be listed on major U.S. stock exchanges. The SEC alleges that neither Carlyle entity had an actual plan or the capability to conduct an IPO and had not even filed applications to be listed on these exchanges. According to the complaint, Masselli then used those investors' money to pay personal expenses.
The SEC's complaint, which was filed in federal court in New Jersey, charges Masselli, Carlyle Gaming, Carlyle Entertainment, and three other Masselli-affiliated entities - Intercapital Partners Ltd., Intercapital Management Ltd., and Appnostiq Interactive Ltd. - with violations of 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.
The SEC's investigation was conducted by Chevon Walker, Matthew Lambert, and George Stepaniuk. The litigation will be led by Todd Brody, and the case is being supervised by Sanjay Wadhwa. The SEC appreciates the assistance of the United States Attorney's Office for the District of New Jersey, the Federal Bureau of Investigation, the New Jersey Bureau of Securities within the New Jersey Office of the Attorney General, and the British Columbia Securities Commission in this matter.