SEC Charges Issuer, Officers and Auditor with Fraud

Jack Humphrey, Regulatory journalist
January 13, 2012 /

The Securities and Exchange Commission charged Florida-based Imperiali, Inc., one current and one former officer, and its former auditor for their involvement in a fraudulent disclosure and accounting scheme.

The SEC’s complaint alleges that between 2005 and 2008, Daniel Imperato orchestrated a scheme to use Imperiali, a business development company that Imperato owned and controlled, to defraud investors by making it appear that Imperiali was a thriving multinational corporation with several wholly-owned businesses, when in fact it was nothing more than a shell corporation.

The complaint alleges that Imperiali raised approximately $2.5 million using offering materials that included numerous material misrepresentations and omissions, and that Imperato and Fiscina drafted, reviewed, and certified at least 16 materially false and misleading registration statements, periodic reports and current reports with the SEC on behalf of Imperiali.

Among other things, the complaint alleges that those filings overvalued Imperiali’s virtually worthless assets at amounts ranging from $3.5 million to $269 million, and failed to disclose the issuance of millions of shares of restricted stock.

The complaint also alleges that O’Donnell failed to audit Imperiali’s financial statements in accordance with Public Company Accounting Oversight Board (PCAOB) Standards, and issued audit reports on Imperiali’s financial statements that he knew or was reckless in not knowing contained materially false and misleading information.

The SEC seeks permanent injunctions and civil penalties from each defendant, disgorgement with prejudgment interest from Imperiali and Imperato, and an officer and director bar against Imperato, and Fiscina.

The Fiscina final judgment does not impose a civil penalty against him based on his sworn inability to pay. The settlement is subject to the court’s approval.

 

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