2017-10-11 sec-litreleases litigation_release 65 KB 2,394 chars

SEC v. Lisa Bershan; Barry Schwartz; and Joel Margulies, No. LR-23966, Southern District of New York (Oct. 11, 2017) — Press Release

raw: Bershan, et al.

Bershan, et al., No. LR-23966 (S.D.N.Y. Oct. 11, 2017)

Caption
SEC v. Lisa Bershan, et al.
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summary

Lisa Bershan, Barry Schwartz, and Joel Margulies defrauded investors in Starship Snack Corp. by falsely claiming an acquisition by Monster Energy or Coca-Cola, and were charged by the SEC with violating federal securities laws.

paragraph

The defendants allegedly used approximately $1 million in investor funds for personal expenses, including renting and decorating a New York City apartment. They misled investors by promising risk-free, one-to-one exchanges of Starship shares for shares of the alleged acquirers and personally guaranteeing returns with 5% interest. The SEC charged Bershan and Margulies 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.

narrative

The U.S. Securities and Exchange Commission charged Lisa Bershan, Barry Schwartz, and Joel Margulies with orchestrating a fraud scheme involving Starship Snack Corp., a company falsely claiming to be on the verge of being acquired by Monster Energy or Coca-Cola. The defendants misled investors by promising risk-free, one-to-one exchanges of Starship shares for shares of the alleged acquirers and personally guaranteeing returns with 5% interest. However, the SEC alleged that no actual acquisition agreements existed, and the defendants used investor funds for personal expenses like luxury apartments, travel, and dining. The SEC charged Bershan and Margulies 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, and charged Schwartz with violating Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder. The SEC seeks disgorgement of ill-gotten gains, penalties, and permanent injunctions, while the U.S. Attorney’s Office filed parallel criminal charges. The investigation involved the FBI and the U.S. Attorney’s Office for the Southern District of New York.

Enriched metadata

Scheme
pre-ipo-fraud (90%)
Court
Southern District of New York
Entity
Bershan, et al.
Classified pre-ipo-fraud(confidence 90%). 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 ActSections 17(a)(1) and (3) of the Securities ActSections 17(a)(1) and (3) of the Securities ActRule 10b-5
Parties
Securities and Exchange CommissionLisa BershanBarry SchwartzJoel Margulies
Keywords
securities exchangebershansecuritiesexchangeexchange commissioninvestorssec'ssecfalsely claimedmonster energyenergy coca-colamargulies falselybershan marguliescommissionsnack

Exhibits & Attached Documents (1)

Extracted insights

Entities 1
  • person lisa bershan
Triples 18
  • The SEC charged three individuals who defrauded investors in a company that falsely claimed to be developing a caffeinated chocolate snack and nearing an acquisition by Monster Energy or Coca-Cola Co.
  • Lisa Bershan and her husband, Barry Schwartz, together with business associate Joel Margulies false claimed to be developing a caffeinated chocolate snack and nearing an acquisition by Monster Energy or Coca-Cola Co.
  • Lisa Bershan defrauded investors in a company that falsely claimed to be developing a caffeinated chocolate snack and nearing an acquisition by Monster Energy or Coca-Cola Co.
  • Barry Schwartz defrauded investors in a company that falsely claimed to be developing a caffeinated chocolate snack and nearing an acquisition by Monster Energy or Coca-Cola Co.
  • Joel Margulies defrauded investors in a company that falsely claimed to be developing a caffeinated chocolate snack and nearing an acquisition by Monster Energy or Coca-Cola Co.
  • SEC charged three individuals for fraud in a snack company investment scam
  • Lisa Bershan defrauded investors in a company that falsely claimed to be developing a caffeinated chocolate snack
  • Barry Schwartz defrauded investors in a company that falsely claimed to be developing a caffeinated chocolate snack
  • Joel Margulies defrauded investors in a company that falsely claimed to be developing a caffeinated chocolate snack
  • Lisa Bershan charged by the Securities and Exchange Commission
  • Barry Schwartz charged by the Securities and Exchange Commission
  • Joel Margulies charged by the Securities and Exchange Commission
  • Securities and Exchange Commission filed charges against Bershan, et al.
  • Securities and Exchange Commission charged Bershan, et al.
  • Bershan, et al. filed No. 17-cv-07793 (S.D.N.Y. filed Oct. 11, 2017)
  • Securities and Exchange Commission alleges that Bershan, et al. defrauded investors
  • Monster Energy nearing an acquisition of a company that falsely claimed to be developing a caffeinated chocolate snack
  • Coca-Cola Co. nearing an acquisition of a company that falsely claimed to be developing a caffeinated chocolate snack
PDF (from attached: complaint)
SEC v. LISA BERSHAN · Source
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Extracted body text (2,394c) 
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 23966 / October 11, 2017 Securities and Exchange Commission v. Bershan, et al., No. 17-cv-07793 (S.D.N.Y. filed Oct. 11, 2017) SEC Files Charges in Snack Company Investment Scam The Securities and Exchange Commission today charged three individuals who defrauded investors in a company that falsely claimed to be developing a caffeinated chocolate snack and nearing an acquisition by Monster Energy or Coca-Cola Co. The SEC's complaint alleges that Lisa Bershan and her husband, Barry Schwartz, together with business associate Joel Margulies, falsely promised investors that after being acquired, Starship Snack Corp. investors would get a one-to-one exchange of Starship shares for Monster or Coca-Cola shares. According to the SEC's complaint, Bershan and Margulies also falsely claimed that investors had "no down-side risk" and Bershan personally guaranteed that investors could get their investment back with 5 percent interest if the shares failed to appreciate over a year. According to the SEC's complaint, Starship had no agreement with Monster Energy or Coca-Cola , and Bershan and Schwartz used investor funds as their own personal piggy bank, spending them to rent and decorate a New York City apartment, and on travel, meals, and other personal expenses. In a parallel action, the U.S. Attorney's Office for the Southern District of New York today announced criminal charges against the three defendants. The SEC's complaint, filed in federal court in Manhattan, charges Bershan and Margulies 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, and charges Schwartz with violating Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder. The SEC is seeking to have the defendants return their allegedly ill-gotten gains plus interest, pay penalties, and be subject to permanent injunctions. The SEC's investigation was conducted by Cynthia A. Matthews, Kerri Palen and Thomas P. Smith Jr., and the litigation will be led by Ms. Matthews and Richard Hong. The case is being supervised by Ms. Mehraban. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation. SEC Complaint
OCR text (2,394c · html-text · 99% conf) 
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 23966 / October 11, 2017 Securities and Exchange Commission v. Bershan, et al., No. 17-cv-07793 (S.D.N.Y. filed Oct. 11, 2017) SEC Files Charges in Snack Company Investment Scam The Securities and Exchange Commission today charged three individuals who defrauded investors in a company that falsely claimed to be developing a caffeinated chocolate snack and nearing an acquisition by Monster Energy or Coca-Cola Co. The SEC's complaint alleges that Lisa Bershan and her husband, Barry Schwartz, together with business associate Joel Margulies, falsely promised investors that after being acquired, Starship Snack Corp. investors would get a one-to-one exchange of Starship shares for Monster or Coca-Cola shares. According to the SEC's complaint, Bershan and Margulies also falsely claimed that investors had "no down-side risk" and Bershan personally guaranteed that investors could get their investment back with 5 percent interest if the shares failed to appreciate over a year. According to the SEC's complaint, Starship had no agreement with Monster Energy or Coca-Cola , and Bershan and Schwartz used investor funds as their own personal piggy bank, spending them to rent and decorate a New York City apartment, and on travel, meals, and other personal expenses. In a parallel action, the U.S. Attorney's Office for the Southern District of New York today announced criminal charges against the three defendants. The SEC's complaint, filed in federal court in Manhattan, charges Bershan and Margulies 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, and charges Schwartz with violating Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder. The SEC is seeking to have the defendants return their allegedly ill-gotten gains plus interest, pay penalties, and be subject to permanent injunctions. The SEC's investigation was conducted by Cynthia A. Matthews, Kerri Palen and Thomas P. Smith Jr., and the litigation will be led by Ms. Matthews and Richard Hong. The case is being supervised by Ms. Mehraban. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation. SEC Complaint

Related documents (1)