SEC Charges Newtown Resident, Microcap Company CEO With Fraud
On March 25, The Newtown Bee learned that the US Securities and Exchange Commission had charged a Connecticut-based penny stock company and its CEO — a Newtown resident — with making false and misleading statements in press releases as part of a scheme to defraud investors.
According to the SEC’s complaint, Halitron, Inc and its CEO, Bernard Findley, allegedly issued false and misleading press releases that materially misrepresented Halitron’s financial condition and the value of the company’s assets in an effort to prop up the value of Halitron’s stock and thereby attract financiers who provided funding to Halitron in exchange for discounted shares of Halitron stock.
The press releases allegedly included false and misleading descriptions of a purported financing arrangement that Halitron had in place, and falsely claimed that Halitron was implementing a stock buyback program. Findley allegedly misappropriated a majority of the money Halitron received from the financiers by using those funds to cover personal expenses and pay off personal credit card debt.
Upon reaching Findley, he declined immediate comment. However, the newspaper was contacted via e-mail March 30 by his attorney, Joseph Dever of the New York City-based firm Cozen O’Connor, who said, “Findley and the Company do not intend to comment to the press on the pending lawsuit.”
Dever released the following statement: “The Company and Mr Findley are disappointed the SEC chose to file the recent lawsuit. While litigation often becomes part of a distressed turnaround business, Mr Findley and the Company always seek to avoid costly and wasteful litigation whenever possible. The Company and Mr Findley have retained legal counsel to defend the SEC lawsuit and look forward to being cleared of any wrongdoing in a court of law.”
According to its website, Halitron, with offices on Simm Lane, “is a multisector holding company, is focused on acquiring sales, marketing, and manufacturing businesses, and then rolling them into an efficient, low-cost operating infrastructure. Management targets operating entities that can either benefit from current operating infrastructure or operate autonomously and offer an additional product or service to scale existing operations.”
According to the website, Halitron’s clients include the US Air Force, Buzzuto’s Inc, True Value, Wegman’s, Cardinal Health, and Brookshire’s Food & Pharmacy.
The SEC’s complaint, filed in federal district court in Connecticut, charges Findley and Halitron with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks disgorgement of ill-gotten gains plus prejudgment interest, penalties, and injunctive relief.
Section 10(b) makes it unlawful to “use or employ, in connection with the purchase or sale of any security” a “manipulative or deceptive device or contrivance in contravention of such rules and regulations as the [SEC] may prescribe.”
The SEC’s complaint further seeks to bar Findley from serving as an officer or director of any SEC-reporting company and from participating in the offering of a penny stock. The SEC’s case is being handled by Xinyue Angela Lin, Alfred Day, Rebecca Israel, Sofia Hussain, and Paul G. Block of the Boston Regional Office.
According to bio information obtained through the website InvestorsHub, Findley has been Halitron’s CEO since January 2015. He is also the co-founder of Hopp & Hemp Co, which, according to the companies website, is a purveyor of CBD and other hemp-derived goods.
The company’s website states Hopp & Hemp Co’s “long-term goal is to establish a fund to go toward more research and development in the hemp industry. So that more ways of how hemp can help us cure diseases and illnesses are available to us.”
The bio states he is the founder of 4S Management, LLC, and served in several capacities there since 2002. A Wall Street Journal profile additionally states “Findley occupied the position of President and Director at Life’s Time Capsule Services, Inc; and President, Chief Executive Officer and Director at Hyperera, Inc.”
He was previously affiliated with Doctors Research Group, Inc, and National Retail Services — a division of Snyder Communications going back to the early 1990s. The online bio states that since 2008, Findley had acquired and consulted with more than 16 brands that were bankrupt, distressed, and/or insolvent.
The online source states he holds an MBA form the University of New Haven, and a Bachelor of Business Administration from Western Connecticut State University.