(MENAFN- Newsfile Corp) SEC Halts Alleged Ongoing Offering Fraud Involving Cycling Companies
Washington, D.C.--(Newsfile Corp. - July 22, 2021) - The Securities and Exchange Commission today announced an emergency action including a temporary restraining order and asset freeze to stop an alleged fraudulent offering of securities and misappropriation of investor assets by Outdoor Capital Partners LLC and its director Samuel J. Mancini of Denver, Colorado. The SEC alleges that the defendants made false statements in raising millions of dollars for an investment fund ostensibly to purchase controlling interests in three Italian cycling companies, but never made the acquisitions and instead fraudulently diverted money raised.
According to the SEC’s complaint unsealed today, the defendants raised approximately $11.5 million from at least 40 investors beginning in late 2019 by selling membership units in an investment fund and short-term, high-interest loan contracts. The complaint alleges that the defendants told investors that they had sufficient funds to acquire three Italian cycling-related companies and that Mancini had invested millions of dollars of his own money in the offerings when neither statement was true. According to the complaint, Mancini misappropriated almost $400,000 of investor funds and made at least $800,000 in Ponzi-like payments to other investors. The complaint also alleges that Mancini hid from investors that Outdoor Capital Partners had failed to make the cycling company acquisitions and created and sent investors numerous false documents in response to various redemption requests, including false fund financial statements, bank statements, and emails from banks.
“As we allege, Mancini repeatedly lied to investors, sent investors falsified bank documents, and misappropriated investor funds,” said Kurt L. Gottschall, Director of the SEC’s Denver Regional Office. “The SEC has significant expertise in rooting out investment fraud by tracing the uses of investor funds even where, as we allege happened here, some funds were transferred to foreign accounts.”
The complaint, filed in U.S. District Court for the District of New Jersey, charges Mancini and Outdoor Capital Partners with violating the antifraud provisions of 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. The SEC seeks emergency relief as well as permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties. The SEC also seeks a conduct-based injunction and an officer-and-director bar against Mancini. In addition, the complaint seeks disgorgement of ill-gotten gains with prejudgment interest from several relief defendants, including the OCP Italia Fund LLC, OCPITALUS LLC, and Mancini’s wife.
The SEC’s investigation was conducted by Jennifer R. Turner and supervised by Mary S. Brady and Jason J. Burt. The litigation will be led by Polly A. Atkinson and supervised by Gregory A. Kasper.
MENAFN22072021004218003983ID1102494318
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.