2-3 minutes - Source: SEC
The SEC's complaint alleged that Jeffrey O. Friedland touted – or promoted – the stock of cannabis company OWC Pharmaceutical Research Corp., while misrepresenting his own investment in OWC and his professional relationship with the company. According to the complaint, Friedland promoted OWC to investors without disclosing his role as a paid promoter or the amount of his compensation. As alleged in the complaint, Friedland held millions of shares of OWC stock through two companies that he controlled, Intiva Pharma LLC and Global Corporate Strategies LLC, with the bulk of the shares received as compensation for promoting OWC to investors, including retail investors. Additionally, according to the complaint, Friedland secretly sold his OWC shares into the market at the same time that he was touting OWC stock to the public as a long-term investment.
"Retail investors are entitled to the facts about promoters' relationships with the companies they tout under our securities laws," said Associate Director Melissa Hodgman. "The $2 million penalty assessed against Friedland reflects the SEC's strong commitment to protecting investors' right to fair and accurate disclosure."
Without admitting or denying the allegations in the complaint, Friedland and Global agreed to disgorge nearly $2.1 million plus prejudgment interest, and Intiva agreed to disgorge $20,000. Friedland also agreed to pay a $2 million penalty. All defendants consented to bars prohibiting them from participating in penny stock offerings.
The SEC's investigation was conducted by William Connolly, Michael Grimes, Keith O’Donnell, and Shipra Wells, with supervision from C. Joshua Felker. The litigation was conducted by Christian Schultz, Timothy Halloran, and Mr. Grimes, with supervision from Fred Block.