SEC ISSUES STOP ORDER, PREVENTS IPO DUE TO FALSE, MISLEADING INFORMATION ON REGISTRATION STATEMENT

FROM:  SECURITIES AND EXCHANGE COMMISSION 

Securities and Exchange Commission issued a stop order to prevent a Northern California-based company from issuing stock after including false and misleading information in its amended registration statement for an initial public offering (IPO).

Stop orders prevent the sale of privately held shares to the public under a registration statement that is materially misleading or deficient.  If a stop order is issued, no new shares can enter the market under that registration statement until the company has corrected the deficiencies or misleading information.

According to the SEC’s stop order against Comp Services Inc., its registration statement fails to disclose the identity of the control person and promoter behind the company, and falsely states that Comp Services earned revenue for providing computer services even though the company has never earned any revenue.  The registration statement has been amended 10 times, most recently in December 2013.

“Comp Services gave investors a false and misleading portrayal of the company as they were deciding whether or not to invest,” said Michele Wein Layne, director of the SEC’s Los Angeles Regional Office.  “This stop order ensures that Comp Services stock cannot be sold in the public markets under this misleading registration statement.”

Comp Services consented to the issuance of the stop order, which also triggers the bad actor disqualifications to prohibit Comp Services from engaging or participating in any unregistered offering conducted under Rule 506 of Regulation D for a five-year period.

The SEC’s investigation, which is continuing, has been conducted by Roberto Tercero and Spencer Bendell in the Los Angeles office.

CFTC FILES AND SETTLES CHARGES AGAINST CENTURION GLOBAL CAPITAL MANAGEMENT LLC

The following excerpt is from the Commodity Futures Trading Commission website:

January 23, 2012
“Washington, DC - The Commodity Futures Trading Commission (CFTC) today announced that it filed and simultaneously settled charges against Timothy Michael Murphy of Redding, Conn., and his New York-based company, Centurion Global Capital Management LLC (CGCM), for fraudulently soliciting at least 40 customers to participate in a commodity pool.

The CFTC’s order requires Murphy and CGCM jointly and severally to pay both a $140,000 civil monetary penalty and restitution of $220,000. The order also permanently prohibits CGCM and prohibits Murphy for a five-year period from trading on a CFTC-registered entity and from registering or seeking exemption from CFTC registration.

The order finds that between about May 2009 and January 2010, CGCM, through Murphy, used a promotional sheet to solicit participants for their commodity pool, Centurion Multi-Strategy LP, that Murphy knew contained false and/or misleading information regarding the trading performance history of one of the two Commodity Trading Advisors that were to trade the pool’s futures accounts. Murphy sent and/or caused this fraudulent promotional sheet to be sent by email and other means to at least 40 pool participants, the order finds. From about September 2009 through July 2010, Murphy received approximately $220,000 from CGCM from the fees and commissions generated by the Centurion pool, according to the order. The Centurion pool was liquidated in or about July 2010, and the remaining funds were returned to pool participants, the order further finds.

The CFTC thanks the National Futures Association (NFA) and the Swiss Financial Market Supervisory Authority (FINMA) for their assistance.
CFTC Division of Enforcement staff members responsible for this case are Joseph Rosenberg, Mark A. Picard, Sheila Marhamati, Philip Rix, Steven I. Ringer, Lenel Hickson, Stephen J. Obie, and Vincent A. McGonagle.”