SEC Charges Hologram Company and Its CEO with Fraud and Registration Violations
Litigation Release No. 24622 / September 27, 2019
Securities and Exchange Commission v. Hologram USA Networks Inc. and Alkiviades ("Alki") David, Civil Action No. 1:19-cv-09013 (S.D.N.Y.)
Today the Securities and Exchange Commission announced charges against Hologram USA Networks Inc., a California business specializing in theatrical holographic shows, and its CEO Alkiviades David, for engaging in the unregistered offer and sale of securities and for making false and misleading statements to investors and prospective investors in connection with that offering.
The SEC's complaint alleges that investors were drawn to Hologram USA's website by a TV commercial regarding an investment opportunity. The website contained information about a purported pending Regulation A securities offering, and a separate unregistered offering of convertible notes. As alleged in the complaint, Hologram USA used general solicitation and allowed non-accredited investors to purchase convertible shares, in violation of certain federal registration requirements. As presented on the website, Hologram USA's business plan included, in major part, the creation of "resurrection" performances in which the holograms of famous deceased artists would be used to create "live" concerts with the deceased. As alleged in the SEC's complaint, a slide deck available on the website for investors and potential investors contained false and misleading information concerning Hologram USA's right to present these shows, and its current theater network in which it planned to broadcast them.
The SEC's complaint, filed in federal district court in Manhattan, charges Hologram USA and David with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 and the registration provisions of Sections 5(a) and 5(c) of the Securities Act. Additionally, David is also charged with aiding and abetting Hologram USA's violations of the antifraud provisions.
The SEC's investigation has been conducted by Yitzchok Klug, Christopher Ferrante, Richard Primoff and Adam Grace of the New York Regional Office. The SEC's litigation is being led by Richard Primoff. The case is being supervised by Sanjay Wadhwa.