SEC Obtains Final Judgment Against Chicago-Area Tech Company
Litigation Release No. 24525 / July 1, 2019
SEC v. Gregory E. Webb, et al., No. 11-CV-7152 (N.D. Ill. filed Oct. 11, 2011)
The Securities and Exchange Commission has obtained a final judgment against a company that purported to make products for the homeland security market.
In October 2011, the SEC charged Gregory E. Webb, the Chairman and CEO of InfrAegis, Inc., and InfrAegis, with conducting a fraudulent, unregistered offering that raised over $20 million from at least 395 investors nationwide. According to the SEC's complaint, Webb and InfrAegis made false and misleading claims about the company's commercial success and the existence of contracts for the installation of InfrAegis' products.
On February 28, 2014, a federal grand jury in Chicago returned an 11-count indictment against Webb for substantially similar conduct as alleged in the SEC's complaint. On July 11, 2016, a jury found Webb guilty on nine of the eleven counts and, on March 1, 2017, the court sentenced Webb to nine years' imprisonment and ordered Webb to pay $9 million in restitution. On December 11, 2018, the SEC obtained final judgment by consent against Webb, which included permanent injunctions and disgorgement with prejudgment interest totaling $682,409 that was deemed satisfied by the criminal restitution order.
The final judgment against InfrAegis, entered by consent on June 11, 2019 by the U.S. District Court for the Northern District of Illinois, enjoins InfrAegis from violating the registration provision of Section 5 and antifraud provisions of Section17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and orders InfrAegis to pay a civil penalty of $50,000. InfrAegis consented to the final judgment without admitting or denying the allegations of the complaint.
The SEC appreciates the assistance of the U.S. Attorney's Office for the Northern District of Illinois and the Federal Bureau of Investigation.