The SEC announced charges May 16 against 10 microcap companies for Regulation A securities offering violations.
According to the SEC, between December 2019 and May 2022, each of the microcap companies obtained SEC qualification for their offerings using Reg A, but made one or more significant changes to the offerings without meeting the exemption requirements.
SEC investigators found these changes included improperly increasing or decreasing the offering price of shares, improperly increasing the number of shares, engaging in prohibited delayed offerings, engaging in prohibited at-the-market offerings, and failing to file updated financial statements annually for ongoing offerings.
“These actions stand as a reminder that companies which choose to circumvent Regulation A’s requirements by engaging in prohibited conduct or making fundamental changes to their offerings without qualification with face action by the SEC,” said Daniel R. Gregus, director of the SEC’s Chicago Regional Office.
Each of the ten microcap companies agreed to stop the violations and pay civil penalties:
- CW Petroleum, based in Katy, Texas, agreed to pay $5,000;
- DNA Brands, based in Alpharetta, Georgia, agreed to pay $10,000;
- Graystone Company, based in Fort Lauderdale, Florida, agreed to pay $25,000;
- Green Stream Holdings, based in New York City agreed to pay $75,000;
- Hemp Naturals, based in Sunny Isles Beach, Florida, agreed to pay $50,000;
- LiveWire Ergogenics, based in Anaheim, California, agreed to pay $50,000;
- Principal Solar in Dallas, Texas, agreed to pay $40,000;
- SFLMaven in Fort Lauderdale agreed to pay $25,000;
- The Marquie Group in St. Petersburg, Florida, agreed to pay $10,000; and
- Verde Bio Holdings in Frisco, Texas, agreed to pay $90,000.
