(HedgeCo.Net) The Securities and Exchange Commission has announced that it filed an emergency action and obtained a temporary restraining order and asset freezes to stop an offering fraud allegedly perpetrated by Florida company PreIPO Corp., Boca Raton resident and serial recidivist, John A. Mattera, and West Palm Beach resident David P. Grzan.
As alleged in the SEC’s complaint, which was filed in federal court in the Southern District of Florida, from at least March 2022 and continuing through the present, PreIPO, through Mattera and Grzan, raised at least $4.2 million from investors. PreIPO, Mattera, and Grzan told investors in the offering that their money would be used to develop an online platform that offers access to shares in private companies before their initial public offerings. Contrary to the defendants’ statements to investors, the complaint alleges that only a small portion of the offering proceeds was used to fund PreIPO’s online platform. Instead, PreIPO made undisclosed payments totaling about $1.7 million to Mattera, Grzan, and other officers of the company out of investor funds. In addition, according to the complaint, PreIPO, Mattera, and Grzan made material misrepresentations and omissions to investors regarding PreIPO’s management in order to conceal Mattera’s involvement in and control over the company.
The SEC’s complaint, filed on August 14, 2023, and unsealed today, charges the defendants with violating the antifraud and securities registration provisions of the federal securities laws. Specifically, the complaint alleges that PreIPO, Mattera, and Grzan violated Sections 5(a), 5(c), and 17(a) of the Securities Act, and Section 10(b) of the Exchange Act and Rule 10b-5, and that Mattera is also liable as a control person for PreIPO’s violations of Section 10(b) and Rule 10b-5. In addition to the emergency relief granted by the court, the complaint seeks preliminary and permanent injunctions, disgorgement plus prejudgment interest, and civil penalties against all of the defendants, and officer and directors bars against Mattera and Grzan. The SEC’s complaint also names Boss Global Advisory Group Inc., a company controlled by Mattera, as a relief defendant, seeking disgorgement plus prejudgment interest.
