SEC Charges Two Miami Men With Defrauding Investors
On September 26, 2014, the Securities and Exchange Commission filed a complaint in Federal Court in Miami against Erick Laszlo Mathe and Ashif Jiwa for defrauding investors. The charges stem from their unregistered sale of securities of Vision Broadcast Network, Inc., a start-up television network and production company.
The Fraud
The complaint alleges that from August 2007 through February 2010, Mathe and Jiwa raised roughly $5.7 million from over 100 investors throughout the country through the sale of common stock and convertible debt. Mathe and Jiwa allegedly misrepresented to investors that Vision Broadcast owned low-power television stations as well as 70 broadcast licenses to operate additional low power television stations estimated to be worth $400 million once the television stations became operational.
The SEC alleges that Mathe and Jiwa diverted hundreds of thousands of dollars of investor funds to themselves by charging professional and consulting services to the company that were never actually provided. The SEC also alleges that Mathe and Jiwa spent investor funds on personal and travel expenses unrelated to Vision Broadcast’s business.
The Securities Law Violations
The SEC’s complaint charges Mathe and Jiwa with violating Sections 5(a) and (c) and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5. The complaint also charges Mathe with aiding and abetting violations of Section 10(b) of the Exchange Act and Rule 10b-5(b). The SEC seeks financial penalties, disgorgement of ill-gotten gains with prejudgment interest, penny stock bars, officer-and-director bars, and permanent injunctions.
The SEC’s Comments
“Mathe and Jiwa deliberately misrepresented a company with little to no assets or revenues as a tremendous investment opportunity,” said Eric I. Bustillo, Director of the SEC’s Miami Office. “They also improperly spent investors’ hard-earned money on their personal and travel expenses.”
A copy of the complaint is embedded below.
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