Pison Stream Solutions, Inc. and Joseph James, Jr., et al.
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25999 / May 8, 2024
Securities and Exchange Commission v. Pison Stream Solutions, Inc. and Joseph James, Jr., et al., No. 1:24-cv-00816 (N.D. Ohio May 7, 2024)
SEC Charges Ohio Company and Its CEO with Offering Fraud
The Securities and Exchange Commission yesterday filed a litigated action charging Pison Stream Solutions, Inc. and Joseph James, Jr. with defrauding investors in Pison’s securities offerings.
According to the SEC’s complaint, between at least December 2017 and September 2022, James engaged in a scheme to siphon money from investors in Pison, a private chemical coatings company James controls. The complaint alleges that James and Pison raised approximately $32.5 million through the offer and sale of various types of Pison securities. The complaint further alleges that James and Pison began diverting investor funds for James’s personal benefit no later than March 2018, and continued throughout the scheme. As alleged, James received net payments of at least $10.8 million from the scheme. Further, the complaint alleges that James and Pison spent millions of dollars of investor funds on undisclosed, personal purchases for James, including, among other things, buying two homes and a private jet, and leasing luxury automobiles, including a Rolls Royce. The complaint also alleges that relief defendants Genacts LLC and Soisi LLC, two limited liability companies James formed, received assets he purchased with investor funds to which they were not entitled.
The SEC’s complaint, filed in the U.S. District Court for the Northern District of Ohio, charges Pison and James 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. The SEC seeks injunctive relief, disgorgement with prejudgment interest, and a civil penalty against Pison and James; disgorgement with prejudgment interest against Genacts and Soisi; and a bar against James serving as an officer or director of a public company.
The SEC’s investigation, which is ongoing, was conducted by Raven A. Winters and Ann Tushaus, and supervised by Amy S. Cotter of the Chicago Regional Office. Benjamin J. Hanauer and Christopher H. White will lead the litigation.