On Sep. 5, SEC charged cannabis investment fund and founder.
- Charged Texas-based investment fund and founder, with defrauding investors
- By false promises of making massive returns with cannabis-related businesses.
Alleged Violations
- SEC alleged Greenview Investment Partners L.P. and its founder Michael Cone
used misleading marketing materials when raising over $3.3mn from investors. - Promised investors up to 24% in annual returns from investment in Greenview.
- Cone used an alias to conceal his prior criminal convictions, lied about having
former agent from US DEA on staff and falsely claimed to have a good record. - The complaint alleges that, in reality, Greenview had no track record, and sole
investment of $400,000 was in cannabis company that had yet to harvest crop. - Cone spent investor money on designer clothes, luxury cars, personal expense.
- In parallel criminal proceeding, the US Attorney’s Office for the Central District
of California charged Cone, and seized approximately $1.4mn in cash, assets.
Enforcement
- Cone agreed to officer-and-director bar, with a permanent injunction and the
court will determine the disgorgement and prejudgment interest at later time.
Investor alert
- SEC issued alert to warn investors about marijuana-related securities offerings.
- In the alert, OIEA and RSTF urge investors to consider risk of investment fraud
and risk of market manipulation before investing in marijuana-related company. - Points out guaranteed high rate of return on the investment is red flag of fraud.
