Don’t mess around with the Securities and Exchange Commission or you might just end up on the wrong side of the law. On Thursday, July 24th, the SEC announced a second round of charges against several people involved in a “boiler room scheme” that hyped a firm whose innovative technology was supposedly going to be used in last year’s Super Bowl.
The SEC originally charged the operators of the scheme based in South Florida and Los Angeles back in September of 2013. The alleged boiler room scammers used high-pressure tactics to convince senior citizens and other investors into purchasing stock in Thought Development Inc. (TDI). The company’s prize product is a laser-line system that generates a green line on a football field as a first-down marker visible on television and also that can also be seen by players, officials and fans throughout the stadium.
All of the defendants have chosen to settle the charges, and Daniel Baker and Dritsas have also entered into plea agreements in the local criminal cases relating to the matters alleged in the complaint.
Two alleged ring leaders already charged; Four others charged today
According to the SEC statement, Peter Kirschner of Delray Beach, Fla. and his business partner Stuart Rubens of North Miami were charged in September of last year regarding an agreement with Thought Development Inc. (TDI) to solicit investors and sell unregistered company stock to assist the firm in raising capital.
The new complaints from the SEC charge brothers Dean R. Baker of Coral Springs, Fla., and Daniel R. Baker of Valley Village, Calif., and Bret A. Grove of Delray Beach, Fla., and Demosthenes Dritsas of Newhall, Calif. with 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.
Statements from SEC about TDI
“These sales agents misled investors to believe that TDI was on the brink of having its technology used in football stadiums across the country,” said Eric I. Bustillo, director of the SEC’s Miami Regional Office. “In reality, TDI had not reached any agreements with the NFL or any team to feature its technology during any games, and certainly not at the Super Bowl.”
“The Bakers and others falsely claimed that an IPO was just around the corner for TDI, and they further enticed investors by saying there were extracting just minimal fees or commissions while more than half the money actually wound up in sales agents’ wallets,” said Glenn S. Gordon, associate director of the SEC’s Miami Regional Office. “We will continue to bring actions against those who target seniors and other groups vulnerable to investment fraud.”
