The SEC found that Collectors Café and Kontilai continued to make fraudulent statements to investors regarding its business and the reasons why its CEO took money from the company for personal expenses.
In a statement, SEC Denver Regional Office Director Kurt Gottschall, said, “We allege that the defendants attempted to cover up their fraud by holding investors’ money hostage until the investors signed agreements preventing them from seeking law enforcement intervention.”
He added, “Through the amended complaint, the Commission seeks to hold the defendants accountable for their fraudulent stock offerings as well as the separate claims for violations of the Commission’s whistleblower protection laws.”
On the other hand, Jane Norberg, Chief of the Office of the Whistleblower, commented, “The SEC’s whistleblower protections broadly protect not just employees, but anyone who seeks to report potential securities law violations to the Commission.”
