2024-09-25 sec-litreleases litigation_release 65 KB 2,591 chars

SEC v. Vitaly Fargesen, No. LR-26128, Southern District of New York (Sept. 25, 2024) — Press Release

raw: Vitaly Fargesen

Vitaly Fargesen, No. LR-26128 (S.D.N.Y. Sept. 25, 2024)

Caption
SEC v. Vitaly Fargesen
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summary

Vitaly Fargesen obtained a final judgment for misrepresenting CanaFarma Hemp Products Corp.'s operations and misappropriating funds, resulting in a penny stock bar and financial penalties.

paragraph

Vitaly Fargesen was charged with violating the Securities Act of 1933 and the Securities Exchange Act of 1934 for his role in a fraudulent hemp company scheme. He was ordered to pay $828,287 in disgorgement and $144,542.81 in prejudgment interest, which was satisfied through a parallel criminal proceeding. The final judgment also imposed a permanent injunction, an officer-and-director bar, and a penny stock bar.

narrative

The SEC obtained a final judgment against Vitaly Fargesen for his role in a fraud involving CanaFarma Hemp Products Corp., which raised millions of dollars in 2019 and 2020. Fargesen allegedly misrepresented the company as a fully integrated operation while actually relying on third-party hemp suppliers. He also manipulated financial models to disguise the misappropriation of investor funds for his own benefit. To resolve the charges, Fargesen agreed to a permanent injunction, an officer-and-director bar, and a penny stock bar. His financial penalties included $828,287 in disgorgement and $144,542.81 in prejudgment interest. These payments were deemed satisfied via a restitution order in a parallel criminal proceeding. The case was brought under Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act.

Enriched metadata

Scheme
pre-ipo-fraud (95%)
Court
Southern District of New York
Disgorgement
$828,287
Entity
Vitaly Fargesen
Classified pre-ipo-fraud(confidence 95%). EDGAR detection: forms S-1/Form D/1-A· recall 72% / precision 8%. detection rule →
Statutes
Section 17(a) of the Securities ActSection 10(b) of the Securities Exchange ActRule 10b-5
Parties
Securities and Exchange CommissionVitaly Fargesen
Keywords
fargesenseccanafarmahempvitaly fargesenhemp productsamendedsecuritiesagainstsecurities exchangecanafarma hempproducts corpfinal againstentered finalpenny stock

Exhibits & Attached Documents (1)

Extracted insights

Dollar amounts 2
  • $828K $828,287 $100K–$1M
  • $145K $144,542 $100K–$1M
Entities 7
  • company canafarma hemp products corp.
  • person investor funds
  • agency Securities and Exchange Commission
  • agency the sec’s litigation
  • court the u.s. district court for the southern district of new york
  • person third parties
  • person vitaly fargesen
Triples 16
  • U.S. Securities And Exchange Commission Obtains Final Judgment Against Defendant for Role in Hemp Company Offering Fraud
  • The U.S. District Court for the Southern District of New York Entered a Final Judgment Against Vitaly Fargesen
  • The Court Entered a Partial Consent Judgment Against Fargesen
  • The Court Entered a Final Consent Judgment Against Fargesen
  • Fargesen Agreed to Pay Disgorgement $828,287 and Prejudgment Interest of $144,542.81
  • Fargesen Agreed to Be Barred From Participating In An Offering of Penny Stock
  • The SEC’s Litigation Is Being Conducted By John C. Lehmann, Rusty Feldman, and Lindsay S. Moilanen
  • The SEC’s Litigation Is Supervised By Daniel Loss and Thomas P. Smith, Jr. of the New York Regional Office
  • The SEC Appreciates the Assistance Of The United States Attorney’s Office for the Southern District of New York
  • The Amended Complaint Alleges That Fargesen Directed Changes To CanaFarma’s Financial Model
  • The Amended Complaint Alleges That Fargesen Misappropriated Investor Funds
  • The Amended Complaint Alleges That Fargesen Made Misrepresentations To Investors
  • CanaFarma Hemp Products Corp. Ran A Hemp Company Offering In 2019 and 2020
  • CanaFarma Purportedly Operated To Raise Millions of Dollars From Investors
  • Fargesen Allegedly Claimed That CanaFarma Was A Fully Integrated Company Processing Hemp From Its Own Farm
  • The Amended Complaint Alleges That CanaFarma’s Products Used Hemp Supplied By Third Parties
PDF (from attached: judgment)
Notice Of Settlement And Entry Of Judgment · Source
Text layers
Extracted body text (2,591c) 
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26128 / September 25, 2024 SEC v. CanaFarma Hemp Products Corp., et al., 21-cv-8211 (S.D.N.Y. filed Oct. 5, 2021, amended complaint filed Nov. 28, 2023) SEC Obtains Final Judgment Against Defendant for Role in Hemp Company Offering Fraud On September 20, 2024, the U.S. District Court for the Southern District of New York entered a final judgment against Vitaly Fargesen, enjoining him from violating certain provisions of the federal securities laws and imposing a penny stock bar. Previously in this action, Fargesen was enjoined from future violations of the charged provisions and barred from serving as an officer or director of a publicly-traded company. According to the SEC’s amended complaint, filed November 28, 2023, in 2019 and 2020 CanaFarma Hemp Products Corp. (“CanaFarma”) raised millions of dollars from investors. While raising these funds purportedly to operate CanaFarma, Fargesen allegedly made misrepresentations to investors, including claims that CanaFarma was a fully integrated company that was processing hemp from its own farm when in fact it had not processed any of this hemp and its products used hemp supplied by third parties. The amended complaint further alleges that Fargesen directed changes to CanaFarma’s financial model in order to disguise an expected series of payments to himself. Additionally, the amended complaint alleges that Fargesen misappropriated investor funds. The SEC’s complaint charged Fargesen with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. On August 14, 2024, the Court entered a partial consent judgment against Fargesen in which he agreed to be permanently enjoined from violations of the charged provisions and agreed to an officer-and-director bar. On September 20, 2024, the Court entered a final consent judgment against Fargesen in which he agreed to pay disgorgement of $828,287 and prejudgment interest of $144,542.81, the payment of which was deemed satisfied by the amended restitution order in the parallel criminal proceeding, United States v. Fargesen, 21 cr. 602 (S.D.N.Y.). Fargesen also agreed to be barred from participating in an offering of penny stock. The SEC’s litigation is being conducted by John C. Lehmann, Rusty Feldman, and Lindsay S. Moilanen and supervised by Daniel Loss and Thomas P. Smith, Jr. of the New York Regional Office. The SEC appreciates the assistance of the United States Attorney’s Office for the Southern District of New York.
OCR text (2,591c · html-text · 99% conf) 
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26128 / September 25, 2024 SEC v. CanaFarma Hemp Products Corp., et al., 21-cv-8211 (S.D.N.Y. filed Oct. 5, 2021, amended complaint filed Nov. 28, 2023) SEC Obtains Final Judgment Against Defendant for Role in Hemp Company Offering Fraud On September 20, 2024, the U.S. District Court for the Southern District of New York entered a final judgment against Vitaly Fargesen, enjoining him from violating certain provisions of the federal securities laws and imposing a penny stock bar. Previously in this action, Fargesen was enjoined from future violations of the charged provisions and barred from serving as an officer or director of a publicly-traded company. According to the SEC’s amended complaint, filed November 28, 2023, in 2019 and 2020 CanaFarma Hemp Products Corp. (“CanaFarma”) raised millions of dollars from investors. While raising these funds purportedly to operate CanaFarma, Fargesen allegedly made misrepresentations to investors, including claims that CanaFarma was a fully integrated company that was processing hemp from its own farm when in fact it had not processed any of this hemp and its products used hemp supplied by third parties. The amended complaint further alleges that Fargesen directed changes to CanaFarma’s financial model in order to disguise an expected series of payments to himself. Additionally, the amended complaint alleges that Fargesen misappropriated investor funds. The SEC’s complaint charged Fargesen with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. On August 14, 2024, the Court entered a partial consent judgment against Fargesen in which he agreed to be permanently enjoined from violations of the charged provisions and agreed to an officer-and-director bar. On September 20, 2024, the Court entered a final consent judgment against Fargesen in which he agreed to pay disgorgement of $828,287 and prejudgment interest of $144,542.81, the payment of which was deemed satisfied by the amended restitution order in the parallel criminal proceeding, United States v. Fargesen, 21 cr. 602 (S.D.N.Y.). Fargesen also agreed to be barred from participating in an offering of penny stock. The SEC’s litigation is being conducted by John C. Lehmann, Rusty Feldman, and Lindsay S. Moilanen and supervised by Daniel Loss and Thomas P. Smith, Jr. of the New York Regional Office. The SEC appreciates the assistance of the United States Attorney’s Office for the Southern District of New York.

Related documents (1)