DOJ charges cannabis fund with fraud as SEC warns about marijuana stocks – MarketWatch

The Securities and Exchange Commission charged Texas-based Greenview Investment Partners L.P. and its founder Michael E. Cone on Wednesday with allegedly defrauding investors by promising 24% annual returns from cannabis-related investments. The U.S. Attorney in California has also criminally charged Cone and seized approximately $1.4 million in cash and assets. The fund and Cone raised more than $3.3 million by allegedly employing boiler room sales staff to cold call investors to promise unattainable returns based on misleading marketing materials. According to the SEC complaint, Cone also concealed his prior criminal convictions by using an alias, lied about having a former agent from the U.S. Drug Enforcement Administration on staff, and falsely claimed to have a long record of profitably investing millions in cannabis-related businesses. Cone allegedly spent investors’ money on designer clothes and luxury cars, and Ponzi-like payoffs of earlier investors. Cone settled the SEC’s charges by agreeing to an officer-and-director bar and a permanent injunction. The court’s decision on civil financial penalties is still pending. An investor alert from SEC’s Office of Investor Education and Advocacy and its Retail Strategy Task Force warned that promises of a guaranteed high rate of return on an investment is a fraud red flag.

See Full Story Cannabis stocks rally anew as analysts cheer latest tie-ups in growing sector

Analysts are bullish on a market that is expected to grow fast once Canada fully legalizes cannabis and related products on October 17.

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