SEC Obtains Final Judgments Against Hologram USA Networks Inc. and CEO in Offering Fraud Scheme
Litigation Release No. 24774 / March 20, 2020
Securities and Exchange Commission v. Hologram USA Networks Inc. and Alkiviades ("Alki") David, Civil Action No. 19-cv-9013 (S.D.N.Y.)
New York, N.Y., March 20, 2020 - On March 19, 2020, the U.S. District Court for the Southern District of New York entered final judgments by consent against Hologram USA Networks Inc. and Alkiviades David for their roles in an alleged offering fraud scheme.
The SEC's amended complaint, filed on December 2, 2019, alleged that from November 2017 until March 2018, Hologram, which purported to stage holographic shows featuring the likenesses of famous deceased performers, and David, its founder, Chairman, and CEO, made materially false and misleading representations to investors and potential investors about Hologram's business. The amended complaint further alleged that Hologram USA and David obtained more than $100,000 from investors, many of whom were not accredited, from the sale of securities of Hologram USA and its subsidiary in offerings that were not registered with the SEC. As alleged, after the defendants became aware of the SEC's investigation, they notified investors that they would be refunded, but not all investors received refunds.
The final judgments permanently enjoin Hologram USA and David from 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 registration provisions of Sections 5(a) and 5(c) of the Securities Act. The judgments further impose a five year officer-and-director bar against David, order David to pay a civil penalty of $100,000, and order Hologram to pay disgorgement and prejudgment interest totaling $22,419. The defendants consented to entry of the judgments without admitting or denying the SEC's allegations.
The SEC's investigation was conducted by Yitzchok Klug, Richard G. Primoff, Christopher Ferrante, and Adam Grace, and the matter was litigated by Mr. Primoff, Mr. Klug, Dugan Bliss, and Preethi Krishnamurthy, with assistance from Thomas Feretic, Lorraine Collazo and Toni Myers. The case has been supervised by Sanjay Wadhwa.