Three Florida men have been charged with selling unregistered technology penny stocks in a scheme that targeted senior citizens, the Securities and Exchange Commission announced Tuesday.
Mason Newman of Hollywood, Christian Baquerizo of Boca Raton and Kevin Cardenas of Fort Lauderdale have been charged with making misrepresentations to people they cold called trying to get them to invest in NIT Enterprises, a South Florida technology company. Baquerizo and Cardenas have agreed to settle the charges without admitting to or denying them, the SEC complaint said.
NIT Enterprises was charged in an earlier SEC complaint for a similar scheme that allegedly cheated more than 100 retail investors, many of them seniors.
In the latest action, the SEC's complaint alleges that Newman, Baquerizo and Cardenas raised approximately $1.4 million selling unregistered NIT stock to retail investors, most of whom were seniors. They allegedly received nearly $500,000 in undisclosed commissions.
According to the complaint, the defendants cold-called investors, making baseless promises about NIT's future profitability and imminent public offering and leading investors to believe that NIT would use their funds primarily for research and development, the complaint said. They allegedly concealed the fact that 30% or more of the funds invested would be used to pay commissions to the defendants. The SEC also alleges that Newman used an alias to conceal that the SEC had previously barred him from acting as a broker and from offering penny stocks to investors.