SEC Charges Florida Resident With Penny Stock Fraud Aimed at Senior Citizen Investors
On September 29th, 2020, the Securities and Exchange Commission (SEC) announced charges against three Florida residents. According to allegations raised by the federal agency, Mason Newman, Christian Baquerizo, and Kevin Cardenas defrauded elderly investors out of nearly $1.5 million in an unregistered penny stock scheme. In this post, our Miami elder investment fraud attorneys provide an overview of the allegations raised by the SEC.
Unregistered Penny Stock Investment Fraud: Background
In the United States District Court for the Southern District of Florida, the Securities and Exchange Commission has brought charges against the following individuals and entities:
- Mason Newman of Hollywood, Florida;
- Christian Baquerizo of Boca Raton, Florida;
- Kevin Cardenas of Fort Lauderdale, Florida; and
- NIT Enterprises Inc, a Florida-based company with headquarters in Palm Beach Gardens.
The SEC alleges that the three men fraudulently sold shares of NIT Enterprises—an unregistered penny stock—to retail investors. These securities were pushed on false pretenses. Notably, most of the investors were senior citizens.
Aggressive Cold Calls, Baseless Promises, and Unregistered Securities
The SEC believes that the three Florida men started their securities fraud scheme in Spring of 2015. At the time, they started selling shares of their unregistered penny stock to everyday investors. Most of the investors targeted were senior citizens in South Florida. Their tactics were relatively straightforward: They aggressively cold called potential investors and made baseless promises of future profitability.
As part of their sales push, the three men and their sales representatives claimed that the company NIT Enterprises Inc. developed an advanced technology (not true) and had already obtained contracts with medical and military partners (not true). The agency reports that the men took in nearly $5 million from investors. At least $1.4 million in investor money was diverted for their own personal use.
The SEC is seeking disgorgement of ill-gotten profits and payment of restitution to investors. Notably, Mr. Baquerizo, and Mr. Cardenas have already consented to bars from the securities industry, including from selling penny stocks.
SEC is Committed to Protecting Vulnerable Investors
In announcing the charges against Mr. Newman, Mr. Baquerizo, and Mr. Cardenas, the SEC emphasized that the agency is committed to protecting the legal rights and financial interests of vulnerable senior citizen investors. Sadly, elder investment fraud remains a serious problem in the United States, particularly in South Florida. By some estimates, elderly Americans lose tens of billions of dollars every year to fraud schemes. The SEC is focused on taking enforcement action to hold fraudsters accountable.
Call Our Miami Elder Financial Fraud Lawyer for Help With Your Case
At Carlson & Associates, P.A., our South Florida securities fraud attorneys have the legal skills and professional experience needed to protect the rights of senior investors. If you or your elderly loved one was the victim of financial fraud, you need a professional advocate on your case. Call our Miami law office today to set up a completely confidential initial appointment. We are more than ready to help you with your case.