SEC Charges Additional Parties in Fraudulent Office Space Investment Scheme
Litigation Release No. 25584 ; December 1, 2022
Securities and Exchange Commission v. James Robinson and David Kennedy, No. 1:22-cv-10200 (S.D.N.Y. filed Dec. 1, 2022)
The Securities and Exchange Commission today filed charges against James Robinson and David Kennedy in connection with an investment scheme that defrauded investors out of more than $57 million. The SEC previously charged the principal of the scheme and associated entities with securities fraud.
The SEC alleges that between approximately September 2015 and July 2016, Robinson and Kennedy raised over $7.5 million from over 100 investors in the fraudulent scheme. The complaint further asserts that Robinson and Kennedy recruited a network of sales agents to sell investments in co-working spaces operated by Bar Works, Inc. and Bar Works 7th Avenue, Inc. using false and misleading offering materials. According to the SEC's complaint, the materials falsely touted the background of Bar Works' purported CEO, "Jonathan Black," and omitted any mention of Renwick Haddow, the actual individual controlling the entities. According to the complaint, Robinson and Kennedy knew that "Black" was fictitious, that Haddow secretly ran the Bar Works companies, and that Haddow had previously been charged by the United Kingdom's securities regulator for an unrelated investment scheme. In return for their roles in the Bar Works scheme, Robinson and Kennedy, through a company they jointly owned called United Property Group, received at least $2 million from Haddow and the Bar Works companies.
The SEC's complaint, filed in the U.S. District Court for the Southern District of New York, charges Robinson and Kennedy with violations of 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(a) and (c) thereunder. The complaint also charges Robinson and Kennedy with aiding and abetting Haddow's and the Bar Works companies' violations of the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act. The SEC previously charged Haddow and the Bar Works companies with violating the antifraud provisions of the federal securities laws. On September 10, 2019, the District Court for the Southern District of New York entered a judgment against Haddow, permanently enjoining him from future violations of the securities laws, and leaving open monetary relief to be determined at a later date. In a separate administrative proceeding, instituted on November 22, 2019, Haddow agreed to be barred from the securities industry.
In a parallel action, the U.S. Attorney's Office for the Southern District of New York today announced criminal charges against Robinson and Kennedy.
The SEC's investigation was conducted by Heather L. Shaffer, Alison R. Levine, Christopher J. Dunnigan, Neil Hendelman, and Sandeep Satwalekar. The case is being supervised by Sheldon L. Pollock. The litigation will be handled by Mr. Dunnigan and Ms. Shaffer. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation, as well as the U.K.'s Financial Conduct Authority and the Comisión Nacional de Mercado de Valores of Spain.