Publicly available records published by the Securities and Exchange Commission (SEC) on April 30, 2018 indicate that the US District Court for the District of Massachusetts has entered a default judgment in an SEC enforcement action against Christopher Esposito, owner and managing director of Lionshare Ventures LLC, in connection to allegation that the company participated in a scheme to misappropriate investor funds and conceal the ownership and control of a publicly traded company.
According to an SEC release, the SEC’s complaint alleged Esposito raised $550,000 in funds from investors “through an unregistered offering of Lionshare securities” and proceeded to misappropriate $375,000 of those funds for his personal benefit, for instance, spending nearly $300,000 on personal expenses and spending $75,000 on the acquisition of Cannabiz Mobile, a publicly traded company based in Massachusetts. The SEC alleges that in in a second part of this scheme, he and Lionshare, as well as another co-defendant, “concealed Esposito and Lionshare’s de facto control of Cannabiz and a large percentage of Cannabiz’s securities in order to evade SEC Rule 144, which limits securities sales by certain company affiliates, such as control persons.” He allegedly achieved this goal by installing a co-defendant as the sole officer and director of Cannabiz, which he nonetheless secretly controlled, “to make false statements” in the company’s filings. The SEC alleges that he “third-party stock promoters to tout Cannabiz stock in order to increase its price and trading volume” and then sold “significant amounts” of the company’s convertible debt (which he had purchased all of in his acquisition of the company) for a profit nearing $304,000. The SEC also alleges that he and his co-defendants sold millions of the company’s shares directly to the public market, reaping a profit.
A final judgment was entered against Mr. Esposito, by default, by judge Allison D. Burroughs in the U.S. District Court for the District of Massachusetts. He was enjoined from future violations of relevant portions of the Securities Act of 1933 and the Securities Exchange Act of 1934; he was ordered to pay, jointly and severally with Lionshare, both disgorgement and prejudgment interest totaling $1,107,413 and a civil penalty of $160,000; he was barred from “acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act”; and he was permanently barred from participating in any penny stock offering.
If you have lost money investing in Lionshare Ventures, LLC, you may be able to recover your losses. Call Fitapelli Kurta at 877-238-4175 for a free consultation. All cases are taken on a contingency basis: Fitapelli Kurta only gets paid if and when you collect funds. Time to file your claim may be limited, so we encourage you to avoid delay. Call 877-238-4175 now to speak to an attorney for free.