Lionshare Ventures LLC and Christopher Esposito charged in Fraudulent Scheme
According to the Securities and Exchange Commission, on April 30, 2018, the U.S. District Court for the District of Massachusetts entered a default judgment in an ongoing enforcement action against Christopher R. Esposito, the owner and Managing Director of Lionshare Ventures, LLC.
The case involved an alleged scheme to defraud investors by misappropriating investor funds and concealing the ownership and control of a publicly traded company.
The SEC’s complaint, filed on May 26, 2016, alleged a two-part scheme involving Esposito, Lionshare, and several co-defendants.
First, Esposito allegedly raised more than $550,000 in investor funds through an unregistered offering of Lionshare securities and then purportedly misappropriated $375,000 for his personal benefit.
According to the complaint, Esposito allegedly spent almost $300,000 of the funds raised on personal expenses and used $75,000 to acquire control of a Massachusetts-based, publicly traded company, Cannabiz Mobile, Inc., by purchasing all of its convertible debt.
In the second phase of the alleged scheme, the SEC’s complaint alleged that Esposito and Lionshare, together with co-defendant Anthony Jay Pignatello, concealed Esposito and Lionshare’s de facto control of Cannabiz and a large percentage of Cannabiz’s securities in order to evade SEC Rule 144, which limits securities sales by certain company affiliates, such as control persons.
According to the SEC’s complaint, Esposito purportedly paid third-party stock promoters to tout Cannabiz stock in order to increase its price and trading volume. Both during and after this promotional campaign, Esposito allegedly sold significant amounts of Cannabiz convertible debt to others for a profit of almost $304,000. Esposito and his associates also allegedly sold millions of shares of Cannabiz stock directly into the public market for a profit.
According to the judgement, Esposito has been ordered to pay on a joint and several basis with Lionshare, disgorgement and pre-judgment interest in the total amount of $1,107,413 and a civil penalty of $160,000.
Additionally, the final judgment against Esposito bars him from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act, and permanently bars him from participating in an offering of a penny stock.
This information is all publicly available on the SEC’s website. For a free consultation with a securities attorney, please call our offices at (888) 637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee. For more information on the firm, visit www.WhiteSecuritiesLaw.com.
Tags: Cannabiz Mobile class action, Cannabiz Mobile complaints, Cannabiz Mobile investigation, Cannabiz Mobile lawsuit, Cannabiz Mobile losses, Lionshare Ventures charges, Lionshare Ventures fraud charges, Lionshare Ventures investigation, Lionshare Ventures lawsuit, Lionshare Ventures litigation, Lionshare Ventures losses, Lionshare Ventures SEC Last modified: May 1, 2018