Riera Law filed claims on behalf of an investor who was solicited by Hurtado and Dias to purchase shares of NxGen Brands. The claim filed alleges that Hurtado and Dias lured the investor to invest in NxGen Brands under false pretenses stating that the funds would be strictly used to pay for digital media. The claim also alleges that Hurtado and Dias misrepresented the speculative, high-risk and illiquid stock as a safe investment and dangled the promise of substantial wealth creation. Instead, the investment was illiquid, and suffered from significant conflicts of interest. The claim further alleges that Hurtado and Dias failed to disclose that penny stocks may trade infrequently which means that it may be difficult to sell penny stock shares once you have them.
The claim alleges that Dias was the person in charge of Business Development at NxGen Brands, who was responsible for raising money through investors. Hurtado and Dias allegedly concealed Dias role at NxGen Brands and that Dias had violated the securities laws and regulations and was prohibited from offering or selling unregistered shares of securities.
In November 2016, the SEC concluded that Dias willfully violated the registration provisions of the Securities Act, Sections 5(a) and 5(c), which prohibit any person from using the mails or any means or instrumentality of interstate commerce to sell a security when a registration statement is not in effect for that security or to offer to sell or offer to buy through the use or medium of any prospectus or otherwise any security when a registration statement has not been filed as to such security. As a result, the SEC ordered Respondent Dias to cease and desist from committing or causing any violations and any future violations of Sections 5(a) and (c) of the Securities Act. The SEC also ordered Dias to pay disgorgement and prejudgment interest of $42,499, and a civil money penalty of $45,000. See OTC Global Partners, LLC and Raimundo Dias, Securities Exchange Act Release No. 34-79300 (Nov. 14, 2016).
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