Litigation Release No. 25120 / June 23, 2021
Securities and Exchange Commission v. Joseph Geromini, Civil Action No. 1:21-civ-12880 (D.N.J. filed June 23, 2021)
The Securities and Exchange Commission today charged a New Jersey resident with defrauding investors and misappropriating proceeds from two securities offerings.
The SEC’s complaint, filed in the U.S. District Court for the District of New Jersey, alleges that Joseph Geromini, while he was the Chief Operating Officer of an early-stage medical devices company based in Philadelphia, Pennsylvania, lied to investors and stole over $200,000 raised during two 2018 securities offerings. According to the complaint, Geromini disseminated offering documents and financial models to investors that he knew were false and misleading because they did not account for his ongoing theft of investor proceeds. In addition, Geromini allegedly made materially false and misleading statements and omissions during communications with investors about the company’s cash burn rate and use of proceeds. For example, the complaint alleges that Geromini falsely told investors that “every penny” of their money would be used in a meaningful, productive manner, when, in reality, he used funds raised during the offerings for personal expenses, including a car, an acquaintance’s cosmetic surgery, a vacation, and other entertainment.
The SEC’s complaint charges Geromini with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, as well as Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the allegations, Geromini has agreed to settle the charges against him. The settlement, which is subject to court approval, would permanently enjoin Geromini from violating the charged provisions of the federal securities laws and prohibit him from acting as an officer or director of a publicly-traded company. The settlement further provides that the court will decide the amounts of disgorgement, prejudgment interest, and civil penalties at a later date.
The SEC’s investigation was conducted by Brian R. Higgins and Oreste P. McClung of the Philadelphia Regional Office and supervised by Brendan P. McGlynn and Scott A. Thompson. The litigation will be led by Michael S. Macko and supervised by Jennifer Chun Barry.