LocatePlus Holdings Settles SEC Suit

July 31, 2012 /

LocatePlus Holdings Corporation (LocatePlus) has agreed to settle charges it engaged in securities fraud for two years by misleading investors about its funding and revenue.

As part of the settlement, LocatePlus agreed to stop selling its securities in the public market.

The proposed judgment, which is subject to court approval, will not impose monetary relief against LocatePlus in light of its bankruptcy and financial condition.

LocatePlus also consented to an order revoking the registration of its securities pursuant to Section 12(j) of the Exchange Act based upon its filing of certain materially deficient reports and its repeated failure to file other required periodic reports. As a result of that administrative order, LocatePlus’ securities will no longer trade in the public markets.

On October 14, 2010, the Commission filed a civil enforcement action in federal district court in Massachusetts alleging that LocatePlus violated the anti-fraud and the books and records provisions of the federal securities laws from 2005 to 2007.

LocatePlus is a former Beverly, Massachusetts-based company that sold on-line access to public record databases for investigative searches. On November 10, 2010, the United States Attorney’s Office for the District of Massachusetts charged former LocatePlus chief executive officer Jon Latorella, and former LocatePlus chief financial officer James Fields, with conspiracy to commit securities fraud for their roles in a scheme to fraudulently inflate revenue at LocatePlus, as well as a scheme to manipulate the stock of another company.

On the same day, the SEC amended its previously-filed civil injunctive action against LocatePlus, arising out of the same conduct, to add Latorella and Fields as defendants.

On June 16, 2011, LocatePlus filed a petition for protection under Chapter 11 of the U.S. Bankruptcy Code and the U.S. Bankruptcy Court for the District of Massachusetts thereafter appointed a Trustee.

On June 14, 2012, Latorella was sentenced to 60 months’ imprisonment in the criminal case, to be followed by three years of supervised release, and the payment of restitution to be determined at a later hearing. The Commission’s civil injunctive action against Latorella and Fields is stayed until the conclusion of the criminal case, which remains pending against Fields.

 

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