SEC Charges Two Men with Fraud and Unregistered Broker Activity
Litigation Release No. 24754 / March 2, 2020
Securities and Exchange Commission v. Bongiorno, Arthur, No. 1:20-cv-00469 (N.D. Ohio filed February 28, 2020)
The Securities and Exchange Commission charged Jason Allan Arthur and Christopher Joseph Bongiorno with engaging in fraud and acting as unregistered brokers in connection with the securities offerings of two issuers, US Lighting Group, Inc. (USLG) and Petroteq Energy, Inc. (PQEFF).
According to the SEC's complaint, Arthur, of Nevada, and Bongiorno, of Ohio, used aliases to convince USLG management that they held the requisite securities licenses to engage in investor solicitations. From September 2015 through November 2018, Arthur and Bongiorno allegedly solicited individual investors throughout the United States to invest in securities issued by USLG and PQEFF. The complaint alleges that, operating under their aliases, Arthur and Bongiorno used lead lists to cold call prospective investors and hired others to work below them to solicit investors to purchase USLG or PQEFF securities. In order to obfuscate their receipt of commissions, Arthur and Bongiorno allegedly submitted misleading invoices to USLG and PQEFF. Arthur and Bongiorno allegedly received commissions of 35% to 50% of investor funds, totaling at least $1,174,057.10 and $2,356,358.91, respectively.
The SEC's complaint, filed in the U.S. District Court for the Northern District of Ohio, charges Arthur and Bongiorno with violating the antifraud provisions of 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 and the broker-dealer registration provisions of Section 15(a)(1) of the Exchange Act.
The SEC's investigation was conducted by James Thibodeau and Laurie Abbott and was supervised by Daniel Wadley, Regional Director of the Salt Lake Regional Office. Litigation will be led by David Whipple.
The SEC encourages investors to check the background of anyone selling or offering them an investment using the free and simple search tool on Investor.gov.