SEC Charges IIIinois Resident for Unregistered Offerings
Litigation Release No. 24887 / September 3, 2020
Securities and Exchange Commission v. Geoffrey Thompson, Civil Action No. 20-cv-5205 (N.D. Ill filed September 3, 2020)
The Securities and Exchange Commission today announced charges against Geoffrey Thompson for illegally selling more $19 million in unregistered securities.
The SEC's complaint alleges that Thompson, a recidivist securities laws violator, and his company, Covalent Collective, Inc., directed numerous offerings of unregistered securities from 2014 to 2019, ultimately raising more than $19 million from approximately 500 investors. As alleged in the complaint, Thompson used numerous mechanisms to solicit investors, including providing investors video and audio recordings in which Thompson encouraged investors to spread the word about the company's securities to friends and family. The complaint further alleges that despite raising nearly $20 million, Covalent never commenced any revenue-generating operations. According to the complaint, Thompson diverted more than $2.7 million of investor funds for his own benefit.
The SEC's complaint, filed in the U.S. District Court for the Northern District of Illinois, alleges that Thompson violated the securities registration provisions of Sections 5(a) and 5(c) the Securities Act of 1933. The SEC seeks injunctive relief, disgorgement of ill-gotten gains and prejudgment interest, and civil money penalties.
In a related action, the Commission instituted settled administrative proceedings against Covalent.
The SEC's investigation was conducted by Ariella Guardi and Pesach Glaser and supervised by C.J. Kerstetter in the Chicago Regional Office. The SEC's litigation will be led by Ben Hanauer.