The Securities and Exchange Commission announced today that, on January 28, 2022, the Court in SEC v. Shumake, et al, entered bifurcated judgments against crowdfunding issuer, 420 Real Estate, LLC, and its CEO, Willard Jackson.

The SEC's complaint, filed on September 20, 2021 in the United States District Court for the Eastern District of Michigan, alleged that Shumake, alongside Jackson, conducted a fraudulent and unregistered crowdfunding offering through 420 Real Estate, a hemp company, on TruCrowd, Inc., a registered crowdfunding portal. The complaint also alleged that Shumake and Jackson raised $888,180 from retail investors through 420 Real Estate. According to the complaint, Shumake, with assistance from Jackson, hid his involvement in the offering from the public out of concern that his prior criminal conviction could deter prospective investors. In addition, Shumake and Jackson allegedly diverted investor funds for personal use rather than using the funds for the purposes disclosed to investors.

Without admitting or denying the allegations of the complaint, Jackson and 420 Real Estate consented to the entry of bifurcated judgments permanently enjoining them from violating the registration provisions of Section 5 of the Securities Act of 1933 and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Jackson also consented to the entry of an officer and director bar. The Court will determine monetary relief at a later date.

The SEC previously obtained final judgments against Defendants TruCrowd, Vicent Petrescu, and Nicole Birch. The SEC's litigation continues.