The Securities and Exchange Commission filed a settlement in full for a case that involved offering fraud. Energy & Environmental Investments, LLC, and Energy & Environment, Inc., based both in California, were accused of a fraudulent offering of securities that raised over $9.3 million since August 31st, 2012 from 200 investors all across the nation. The complaint names Amir Sardari as the CEO of EEI and Narysa L. Luddy, his daughter who was formerly Vice President for Investor Relations at EEI.
According to the SEC complaint, EEI operated a California call center where agents used high pressure tactics to convince investors that they should purchase EEI’s shares. The defendants claimed the funds from investors would be used to acquire and develop clean energy projects. The complaint claims that, instead, $4.42million, or 47 percent of the funds were spent on call center expenses, such as payroll and marketing. Luddy was also given over $1 million, which he allegedly spent on personal expenses. The complaint also alleges that defendants used funds from investors to pay out returns in a Ponzi scheme.
The SEC action was a coincidence with the conclusion of a criminal case brought by the District Attorney against Sardari & Luddy. In the criminal case both defendants admitted to a misdemeanor offense and agreed that they would pay more than $500,000 in disgorgement or restitution.
Sardari Luddy EEI E&E and E&E in the SEC Case have consented, subject to court approval, to a judgment final. The court’s decision would prevent them from ever violating anti-fraud provisions or participating in unregistered securities offerings. (With exceptions to trading on national market for their own account). The judgment would also impose director and officer bars. If approved, EEI will be liable for $3,414,836 of disgorgement as well as $977.949 in interest and a civil penalty of $1,035,909. Luddy will be required to pay disgorgement of $1,009192, prejudgment interest of $289015, and a civil penalty for $200,000, if approved.
Investor.gov’s free search tool is a great way to find out about the background of any person offering you investments. Investors can access SALI to search for information on individuals who have had judgments or orders issued against them by SEC court proceedings or administrative proceedings.
Brittany Garmyn and Cooper Rekrut conducted the SEC investigation under the supervision C. Joshua Felker, Melissa Hodgman. The SEC thanks the Orange County California District Attorney’s Office and California Department of Financial Protection and Innovation for their assistance.
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SEC
The Securities and Exchange Commission is an American regulatory agency that was created to protect investors, ensure fair and efficient markets and facilitate capital formation. The SEC supervises different participants in the securities market, such as securities exchanges. Investment advisors. Mutual funds. The SEC’s main responsibilities are to enforce securities laws, regulate the securities industry and promote investor education and protection. The SEC makes sure that companies are providing accurate and timely information for investors. It also monitors the insider trading activity and takes enforcement action against fraudulent and manipulative practices on financial markets. Overall, the SEC has a vital role to play in maintaining integrity and transparency of U.S. financial markets.
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