SEC News: Ex-Harbinger COO Settles Hedge Fund Fraud Case and Regulator Files More Charges in “Solar Farm” Scam and Football-Like Boiler Room Case

Ex- Harbinger Capital Partners LLC COO Admits Wrongdoing in Hedge Fund Case
Peter A. Jenson, the former chief operating officer at Harbinger Capital Partners LLC, has agreed to pay $200,000 and admit to wrongdoing in the U.S. Securities and Exchange Commission’s case accusing him of assisting in hedge fund fraud. The scam involved his former firm and its owner Philip A. Falcone and sought to misappropriate millions of dollars so Falcone could pay his taxes.

The SEC charged Jenson, Falcone, and Harbinger in 2012. As part of his settlement, Jenson is acknowledging that he knew about the violations committed by Harbinger and Falcone. He said that he helped Falcone take part in a related party loan by failing to make sure the lender, Harbinger Capital Partners Special Situations Fund, had its own counsel, the loan was consistent with the fiduciary duties that Falcone owed the Special Situations Fund, and that Falcone paid an interest rate on the loan that was “above market.”

Jenson also admitted that he failed to tell investors about the loan in a timely manner and acted so as to compel the lender to hurry Falcon’s loan payment once investors in the Special Situations Fund were allowed to redeem their investments.

SEC Files More Charges in Penny Stock Scam Involving Solar Farms
The SEC is filing securities fraud charges against MSGI Technology Solutions and its CEO J. Jeremy Barbera. The regulator claims that they bilked investors by promoting a joint venture involving solar energy farms on land that purportedly belonged to an electricity provider run by Christopher Plummer. The agency previously charged Plummer and another penny stock company and CEO with putting out misleading press releases.

Now, the regulator is contending that Barbera also conspired with Plummer. The two of them are accused of falsely portraying in press releases that MSGI was a successful renewable energy company involved in solar energy projects that were about to become profitable. In fact, the penny stock company has no customers, operations, or revenue. Also, Plummer’s company didn’t have the financing or assets required to generate solar energy farms.

Barbera and MSGI are settling the SEC charges, which includes Barbera paying a $100,000 penalty. He also has consenting to a permanent bar from either acting as a director or an officer of a public company or taking part in a penny stock scheme again.

SEC Files More Charges in Boiler Room Scam That Touted Super Bowl Connection
The SEC has filed charges against four executives and their three companies, CalPacific Equity Group, DBBG Consulting, and DDBO Consulting, for their involvement in a boiler room scam that promoted a company that had new technology that was supposedly going to be used during Super Bowl 2013.

Senior investors and others were pressed into buying stock in Thought Development Inc., which purportedly developed a laser-line system that could create a line on a football field for a first-down marker that would be visible not only on TV but also by officials, players, and live fans. There was no such deal with the Super Bowl.

The scam raised about $1.7 million from over 110 investors who were led to believe that an IPO was about to happen and that their funds would go toward developing the technology. The SEC says that instead, at least half of offering proceeds were paid as commissions and fees to sales agents or kept by these companies.

The defendants have consented to settle the SEC charges. Meantime, two of the people previously charged in the scam, Dean Baker and Daniel Dritsas, have entered into plea deals in criminal cases related to the allegations.

The proposed final judgment in the Harbinger case (PDF)

Read Jenson’s Consent (PDF)

The SEC’s Complaint in the “Solar Farm” Penny Stock Case (PDF)

SEC Announces Additional Charges in Football-Related Boiler Room Scheme, SEC, July 24, 2014

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