On June, 3, 2020, the U.S. Securities and Exchange Commission (“SEC”) obtained a preliminary injunction against investment adviser Paul Horton Smith, Sr. and related entities. The SEC alleges Smith and his entities engaged in a Ponzi scheme targeting senior citizens.

The SEC’s complaint refers to three entities associated with Smith: Northstar Communications, LLC, eGate, LLC, and Planning Services, Inc. Through these entities, the complaint alleges that Smith targeted seniors, guaranteeing investors annual interest payments in so called “private annuity contracts.” Smith did not in fact invest the money as promised, the SEC explained, and instead used the money to pay investors in a Ponzi-like fashion. The SEC also alleges that Smith held himself out to be a trusted fiduciary.

The case is Securities and Exchange Commission v. Paul Horton Smith, Sr., et al., Central District of California, No. ED CV 20-1056 PA (SHKx).

The U.S. Securities and Exchange Commission (“SEC”) filed a complaint for fraud against Applied Bioscience Corp. in May 2020. The SEC alleges that Applied Biosciences Corp. sought to exploit the COVID-19 pandemic for profit. In March 2020, the company changed its focus from cannabinoid-based products to pandemic-related products to “help battle the spread of COVID-19.” In late March, the company issued a press release outlining their sales of home test kits to the general public for COVID-19. The SEC determined that no shipments occurred and that the press release was misleading as the company did not disclose the FDA had not approved or authorized the sale of any COVID-19 at home test kits.

The SEC’s complaint charges the company with fraud for violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.

The case is Securities and Exchange Commission v. Applied Biosciences Corp., S.D.N.Y., Case No. 20 Civ. 3729.