SEC Halts Florida Penny Stock Fraud Targeted at Senior Citizen Investors
On November 27th, 2019, the Securities and Exchange Commission (SEC) announced that it obtained an emergency order to freeze the assets of a Florida-based penny stock fraud scheme. The fraud at issue in this case allegedly affected more than 110 investors, most of them senior citizens. The defendants named were:
- NIT Enterprises, Inc.;
- Gary R. Smith of West Palm Beach, FL;
- James M. Ganton of Miami, FL; and
- James E. Cleary of Boca Raton, FL.
The SEC alleges that these individuals used their company, NIT Enterprises, to defraud investors out of at least $4.9 million. Below, our Miami penny stocks attorneys provide an overview of the allegations from federal regulators.
Allegations: Penny Stock Fraud in South Florida
In a complaint filed in the United States District Court for the Southern District of Florida, the Securities and Exchange Commission contends that the defendants made baseless and unrealistic promises to investors—stating that investors should expect to double or even triple their investment in NIT Enterprises, Inc.
In its marketing materials and direct conversations with actual and prospective investors, the defendants and their representatives stated that NIT Enterprises was raising capital to fund development of radiation protection products. In reality, these products were barely being developed at all. Indeed, the SEC believes that only a minuscule percentage of the funds raised were actually used for this purpose. Instead, most of the money was siphoned off to cover the personal expenses of the three defendants and to pay large and wholly undisclosed commissions to experienced brokers hired by the company to push its securities on vulnerable retail investors.
Elderly Investors in Florida Were Targeted
Similar to many other securities fraud cases, the perpetrators are alleged to have intentionally targeted vulnerable senior citizen investors. Sadly, elder financial fraud is a serious problem—particularly in South Florida. According to research conducted by the Administration for Community Living (ACL), senior citizens lose at least $3 billion per year in investment fraud schemes. Though, the authors of that study noted that the true figure is undoubtedly higher than that because investment fraud is chronically underreported.
Elderly investors need financial protection. Brokers and other financial professionals that take advantage of senior citizens and other vulnerable investors must be held accountable. If your elderly parent or loved one lost a substantial amount of money in a securities fraud scheme, professional support is available. Contact an elder financial abuse attorney for immediate assistance.
Call Our Miami Penny Stock Fraud Attorneys for Immediate Assistance
At Carlson & Associates, P.A., our investment fraud lawyers have the skills and knowledge to handle all types of penny stock fraud claims. If you or your elderly loved one suffered losses in a penny stock, we are here to help. To arrange a confidential case evaluation with an experienced penny stock fraud lawyer, please contact us today. With a law office in Miami, we advocate for the rights and interests of investors throughout Florida.
Resources:
sec.gov/news/press-release/2019-245
sec.gov/litigation/complaints/2019/comp-pr2019-245.pdf
