2014-09-15 sec-litreleases litigation_release 65 KB 3,041 chars

SEC v. DDBO Consulting, Inc.; CalPacific Equity Group, LLC; Dean R. Baker; Daniel R. Baker; Bret A. Grove; and Demosthenes Dritsas, No. LR-23083, Central District of California (Sept. 15, 2014) — Press Release

raw: DDBO Consulting, Inc./CalPacific Equity Group, LLC, et al.

DDBO Consulting, Inc./CalPacific Equity Group, LLC, et al., No. 0:14-cv-61685-MGC (Sept. 15, 2014)

Caption: Securities and Exchange Commission v. DDBO Consulting, Inc., et al., Civil Action No. 0:14-cv-61685-MGC

summary

The SEC charged DDBO Consulting, Inc., CalPacific Equity Group, LLC, and their principals with operating a boiler room scheme that raised $1.7 million from over 110 investors, and the defendants agreed to settle the charges.

paragraph

The SEC alleged that the defendants raised approximately $1.7 million from over 110 investors by misrepresenting the imminent IPO and use of Thought Development Inc.'s technology by the NFL. At least 50% of the proceeds were allegedly retained by the defendants and paid as undisclosed commissions and fees. The defendants were charged with violating the Securities Act of 1933 and the Securities Exchange Act of 1934.

narrative

The U.S. Securities and Exchange Commission charged DDBO Consulting, Inc., CalPacific Equity Group, LLC, and their principals, including brothers Dean R. Baker and Daniel R. Baker, Bret A. Grove, and Demosthenes Dritsas, with operating a boiler room scheme. The scheme raised approximately $1.7 million from over 110 investors by misrepresenting the imminent IPO and use of Thought Development Inc.'s technology by the NFL. The defendants allegedly retained at least 50% of the proceeds and paid undisclosed commissions and fees. The SEC alleged violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. The defendants misled investors, including by fabricating a deal with NFL Commissioner Roger Goodell, and diverted funds to themselves and undisclosed commissions rather than developing the technology. The defendants agreed to settle the SEC's charges, and parallel criminal charges were announced against the individuals.

Enriched metadata

Scheme: boiler-room (100%)
Court: Central District of California
Case No.: 0:14-cv-61685-MGC
Outcome: settled
Victim loss: $1,700,000
Victims: 110
Entity: DDBO Consulting, Inc.

Classified boiler-room(confidence 100%). EDGAR detection: forms Form D· recall 50% / precision 4%. detection rule →

Extracted insights

Dollar amounts 3

$1.70M $1.7 million $1M–$10M
$75K $75,000 $10K–$100K
$3K $2,500 <$10K

Entities 2

agency Securities and Exchange Commission
organization Securities and Exchange Commission

Triples 1

Securities and Exchange Commission charges DDBO Consulting, Inc., CalPacific Equity Group, LLC, and principals with fraud and registration violations

View original SEC litigation releasesec.gov

Extracted body text (3,041c)

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 23083 / September 15, 2014 Securities and Exchange Commission v. DDBO Consulting, Inc., et al., Civil Action No. 0:14-cv-61685-MGC (S.D. F.L.) Securities and Exchange Commission v. CalPacific Equity Group, LLC, et al., Civil Action No. 2:14-cv-05754-JFW-AGR (C.D. C.A.) SEC Charges Ddbo Consulting, Inc., Calpacific Equity Group, LLC, and Principals with Fraud and Registration Violations The Securities and Exchange Commission (Commission) announced that on July 24, 2014, it filed civil actions in U.S. District Court against individuals and companies behind a boiler room scheme that hyped a company whose new technology was purportedly to be used in the Super Bowl. The SEC previously charged the operators of the scheme based in the South Florida and Los Angeles areas. Seniors and other investors were pressured into purchasing stock in Thought Development Inc. (TDI), an unaffiliated Miami Beach-based company that stated its signature invention is a laser-line system that generates a green line on a football field for a first-down marker visible not only on television but also to players, officials, and fans in the stadium. The SEC charged four executives who helped make the scheme possible and three companies they operate - DDBO Consulting, Inc., DBBG Consulting, Inc., and CalPacific Equity Group, LLC. Approximately $1.7 million was raised through these companies from more than 110 investors who were told that an initial public offering (IPO) in TDI was imminent and that their money would be used to develop the ground-breaking technology. Instead, the SEC alleges that the IPO was not forthcoming as promised, and at least 50 percent of the offering proceeds were merely retained by these companies or paid to sales agents through undisclosed commissions and fees. Certain executives, their sales agents and their companies lured investors by misrepresenting that TDI's technology was about to be used by the National Football League (NFL). One investor even made an additional $75,000 investment on top of an initial $2,500 investment after being told that NFL Commissioner Roger Goodell purchased TDI's technology for use in the 2013 Super Bowl. In fact, there was no such arrangement. In addition to the their companies, the SEC's complaints charge brothers Dean R. Baker of Coral Springs, Fla., and Daniel R. Baker of Valley Village, Calif., along with Bret A. Grove of Delray Beach, Fla., and Demosthenes Dritsas of Newhall, Calif. The SEC's complaints allege violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 as well as Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5. The defendants all agreed to settle the SEC's charges. In parallel actions, the U.S. Attorney's Office for the Central District of California announced criminal charges against Daniel Baker and Dritsas, and the U.S. Attorney's Office for the Southern District of Florida announced criminal charges against Dean Baker and Grove.

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