On September 3, 2020, the Unites States Securities and Exchange Commission (SEC) commenced a civil action against Illinois resident Geoffrey Thompson. According to the SEC’s Complaint, from July 2014 through June 2019, an entity founded and controlled by Thompson, Covalent Collective, Inc., offered several different types of investments to approximately 500 investors, raising more than $19 million.
Geoffrey Thompson Solicited Investors Through A Variety of Methods
According to the SEC’s Complaint, Geoffrey Thompson and Covalent used a variety of methods to solicit investors, including the use of unregistered broker-dealers, press releases, an investor relations firm, a public website, and a call center operated by Thompson’s company, Fortress Legacy. The SEC lists the following fraudulent offerings as part of its new lawsuit:
- Advantameds Convertible Promissory Notes
- Covalent Warrants
- Covalent Common Stock
- Covalent Promissory Notes
Unfortunately, according to the Complaint, “[d]espite raising more than $19 million from investors, Covalent never commenced any revenue-generating operations.” Nevertheless, the SEC alleges that Thompson paid himself, his wife, and other companies he owned $2.7 million. The SEC alleges that Thompson’s conduct violated Sections 5(a) and 5(c) of the Securities Act, which prohibits the sale of unregistered securities.
Geoffrey Thompson Settled A Previous SEC Lawsuit Just Months Earlier
As noted in the SEC’s Complaint, in April 2020, Geoffrey Thompson paid more than $500,000 to settle SEC claims of securities fraud and registration violations in connection with a previous fraudulent business venture, Accelera Innovations, Inc. Part of this settlement included a five-year bar from serving as an officer or director of a public company and from offering penny stocks.
The SEC’s previous lawsuit alleged that Thompson and affiliated companies Accelera Innovations, Inc. and Synergistic Holdings LLC sold unregistered Acclera stock to investors.
Silver Law Group Specializes in Representing Victims Of Investment Fraud
The SEC has previously issued Investor Alerts to remind investors to be cautious about jumping into “pot stocks” and other marijuana/cannabis investments without conducting due diligence. Unfortunately, fraudsters like Thompson, an alleged repeat offender referred to as a “recidivist” by the SEC, will continue to capitalize on current events and hard financial times to swindle inexperienced investors out of their hard-earned savings.
These fraudulent cannabis investments are often distributed through networks of unregistered and unlicensed brokers who use aggressive sales tactics to solicit investor funds via cold-call, text message, or social media. Typically, fraudsters offer substantial or guaranteed returns with little to no risk involved. These should serve as “red flags” to prospective investors.
Before investing, it is important to ask questions, do diligent research, read recent reporting statements filed with the SEC or other regulators, and consult an expert if you are still unsure.
If you’ve invested in a “pot stock” or other investment and aren’t sure if it’s the real thing, contact us for a confidential consultation. Silver Law Group represents investors in securities and investment fraud cases nationwide to help recover investment losses due to stockbroker or fraudster misconduct and other investment-related wrongdoing. Our attorneys currently represent many investors in marijuana-related litigation and most cases are handled on a contingency fee basis. This means you won’t pay any legal fees unless we are successful. Call us toll free at (800) 975-4345 or email firstname.lastname@example.org to get in touch.