Litigation Release No. 25087 / May 7, 2021
Securities and Exchange Commission v. David N. Osegueda, et al., No. 2:19-cv-04348-PSG-AGR (C.D. Cal.)
The U.S. District Court for the Central District of California has entered final judgments against the remaining three defendants in a 2019 SEC action charging them for their alleged roles in a pump-and-dump scheme in the stock of southern California beverage and cannabis company Green Cures & Botanical Distribution, Inc. The SEC previously charged Ishmail Calvin Ross, Zachary Logan, Jessica Snyder, and David N. Osegueda with deceiving a brokerage firm into allowing Ross, Logan, and Osegueda to deposit their Green Cures stock into their accounts in advance of their pumping up the company’s stock price through a promotional campaign. Ross, Logan, and Osegueda then allegedly dumped their shares on unsuspecting investors, generating approximately $1.9 million in illicit proceeds.
Without admitting or denying the allegations of the complaint, Ross and Snyder consented to final judgments entered by the court. The court also entered a final judgment against Logan based upon his default. The judgments permanently enjoin Ross, Logan, and Snyder from 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 further enjoin Ross and Logan from violating the securities registration provisions of Section 5 of the Securities Act. The judgments order Ross and Logan to pay disgorgement and prejudgment interest of $781,868 and $184,293, respectively. The court further ordered that Ross, Logan, and Snyder pay civil penalties of $400,000, $164,000, and $100,000, respectively. The judgments also prohibit all three defendants from participating in the offering of a penny stock, and impose ten-year and permanent officer and director bars against Ross and Snyder, respectively.
Without admitting or denying the allegations of the complaint, Osegueda previously consented to a final judgment that permanently enjoined him from violating Sections 5 and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, ordered him to pay disgorgement and prejudgment interest of $933,181 and a civil penalty of $835,941, and imposed a penny stock bar and a ten-year officer and director bar.