Additionally, the SEC alleged that the defendants provided investors with financial information that misstated CanaFarma’s historical revenues and future revenues that were baseless.
Furthermore, Fargesen and Palatnik allegedly misappropriated at least $4 million in investors’ funds. The defendants used the monies for their personal use and for purposes unrelated to the company’s business. They doctored financial estimates supported by fake agreements and invoices to conceal the misappropriations, according to the Commission’s complaint.
In a statement, SEC New York Regional Office Director Richard Best said, “As alleged in our complaint, the defendants pitched investors with falsehoods about a fully integrated hemp company with rosy financial projections. We will relentlessly pursue those who deceive investors and misappropriate and misuse their funds.”
The Commission is requesting the court to order permanent injunctions, disgorgement, and prejudgment interest as well as civil penalties against the defendants.