Flynn allegedly operated his scam from the Philippines under different corporate entities. He directed marketing teams to engage in aggressive and high-pressure sales campaigns. His marketing teams cold-called potential investors and used relentless and deceptive communication tactics to convince investors to buy Vuuzle common stock.
They offered Vuuzle common stock for $1 to $5 per share. Most investors paid $5 per share. Many investors were also granted purported warrants that gave them rights to buy additional shares for a limited time at a discounted price. Investors were duped as none of the Vuuzle securities were registered with the SEC.
Additionally, the SEC alleged that Flynn and Vuuzle made false and misleading statements to investors, in their filings with the SEC, and offering documents.
The defendants claimed that they will use investors’ funds to build and operate Vuuzle’s online streaming business, which would generate millions of dollars in revenue from advertising and service fees. In reality, Flynn only used $2 million to build the streaming app, which served as a prop to defraud more investors.
