Pleasanton company charged with stock fraud
San Francisco Business Times - by Mavis Scanlon
After regulators sued the Children's Internet Inc. for stock fraud, its auditor, Marc Lumer & Co., resigned this week.
The Securities and Exchange Commission charged the principals of Pleasanton-based the Children's Internet with stock fraud on Sept. 27.
In a complaint filed in federal court in San Francisco, the SEC charged CEO Sholeh Hamedani, 39, and her father, Nasser Hamedani, 68, both of Danville, with defrauding investors out of about $5.5 million.
Only a fraction of the money the company raised actually went to fund corporate operations, according to the suit. The complaint alleges that funds went toward luxury cars, gambling debts and personal expenses.
The complaint states that the Hamedanis fraudulently induced investors to buy about 2.7 million shares of stock in the Children's Internet, a web site that offers safe web surfing, children's content, and educational programming, by misrepresenting key facts. According to the SEC, investors were told that shares would be traded on a national stock exchange, which was not true.
The complaint also alleges that 25 percent of the investments would be paid to two stock promoters as commission. In addition, it said some of the proceeds from the stock sale were illegally funneled back to the Hamedanis and to a company they controlled, Two Dog Net Inc. The SEC also charges the company and Sholeh Hamedani with making false SEC filings.
"We feel that the facts have been grossly misconstrued by the SEC and we have every intention of fighting this," Sholeh Hamedani said on Thursday. "We're appalled at what's being done to us."
She noted that her family has been in the Bay Area for years, and that her father, Nasser Hamedani, is known for a company he started, SyberVision. According to The Children's Internet web site, SyberVision, a learning technology company, grew to a $100 million company with 1.25 million customers.
In its suit, the SEC seeks the return of all ill-gotten investor funds as well as other penalties.
Also charged in the suit are two Florida stock promoters, Peter Perez, 40, of Boca Raton, and Cort Poyner, 37, of Delray Beach.
On Sept. 29, the Children's Internet issued a press release refuting the SEC charges and explaining that the company had already filed its own charges against the law firm that advised the company.
East Bay Business Times
Related Industry News |
Latest News |
Most Viewed Stories |
Most Emailed Stories |
