Investing

SEC Charges Microcap With Misleading Investors

Chris Lange

Published: March 15, 2016 11:25 am

Last Updated: January 13, 2020 11:56 am

The U.S. Securities and Exchange Commission (SEC) recently charged a microcap company’s chief executive officer for falsely claiming to have a lucrative relationship with the United Nations and billions of dollars in clean energy contracts with foreign governments.

The agency alleged that RVPlus CEO Cary Lee Peterson made bogus claims in the company’s public filings and in statements to private investors, and that he and RVPlus participated in an unlawful distribution of RVPlus’s stock.

The SEC had temporarily suspended trading in RVPlus securities in July 2013, citing “material deficiencies” in the company’s financial statements.

The SEC charged RVPlus and Peterson with violating the antifraud provisions of the securities laws and an SEC antifraud rule. It also charges RVPlus and Peterson with violating the registration provisions of the securities laws and Peterson with aiding and abetting RVPlus’s violations of the antifraud provisions.

Andrew M. Calamari, director of the SEC’s New York Regional Office, commented:

We allege that Peterson inflated RVPlus’s finances and expected profitability. We also allege that using a pseudonym, he posted hundreds of messages to an online investors’ forum calling RVPlus stock ‘undervalued,” and urging investors to ‘buy up as much as possible.’

According to the SEC’s report:

• Starting in May 2012, Peterson filed periodic reports with the SEC claiming that RVPlus had a lucrative relationship with the United Nations and clean energy agreements with governmental bodies in Nigeria, Haiti, and Liberia worth $2.8 billion.  RVPlus had no relationship with the U.N. and the contracts were fictitious.
• Peterson repeatedly claimed in RVPlus’s SEC filings that RVPlus had issued invoices and was owed millions of dollars in accounts receivable on the bogus contracts.
• RVPlus and Peterson gained control of more than 90 percent of RVPlus’s free trading shares and gave them to individuals who unlawfully sold them into the market.

The SEC is seeking a permanent injunction, return of allegedly ill-gotten gains with interest, and penalties. In addition, it is seeking to bar Peterson from serving as a corporate officer or director and from participating in the penny-stock business. In a parallel action, the U.S. Attorney’s Office for the District of New Jersey Tuesday announced criminal charges against Peterson.