The Securities and Exchange Commission on Thursday filed a civil suit against the operators of a South Florida-based boiler room scheme, charging them with defrauding seniors and other investors that they allegedly pressured into purchasing stock in a company which they said developed ground-breaking technology for the National Football League to use in the Super Bowl.
The SEC alleges that Peter Kirschner of Delray Beach and his business partner Stuart Rubens of North Miami struck an agreement with Miami Beach-based Thought Development to solicit investors and sell unregistered company stock to help raise capital. TDI states that its signature invention is a laser-line system that generates a green line on a football field that is visible as a first-down marker not only on television, but also within the stadium to players, fans, and officials.
The SEC alleges that through sales agents paid by their company, Premiere Consulting, Kirschner and Rubens schemed to misrepresent to investors that their money would be used to develop TDI’s technology and fund a purported IPO of its stock. Instead, 75 percent of the offering proceeds were retained by Premiere Consulting or paid to sales agents through undisclosed commissions and fees, the SEC said. Investors also were falsely promised that TDI’s laser-line technology would be used during NFL games, including the Super Bowl. TDI did not have any agreements with the NFL or any team to feature its technology during football games, the SEC said.
According to the SEC’s complaint filed in U.S. District Court for the Southern District of Florida, TDI terminated its relationship with Premiere Consulting, Kirschner, and Rubens in late 2011 when it found out about the lies told to investors and undisclosed commissions and other fees. Kirschner and Rubens then formed a new company, Advanced Equity Partners, and continued to solicit investors and sell purported TDI stock, the SEC said. Premiere Consulting and sales agents from Advanced Equity raised more than $2.4 million from approximately 200 investors nationwide from July 2011 to November 2012, the SEC said.
Kirschner has a prior history of securities law violations. In 2006, he was charged by the SEC for fraudulent sales of prematurely issued stock dividend shares and agreed to pay nearly $165,000 to settle the charges. Kirschner and Rubens agreed to settle the latest SEC charges. They will be barred from participating in any penny stock offerings, and monetary sanctions against them will be determined by the court at a later date, the SEC said.
The SEC separately filed a complaint in federal court against TDI and its chairman Alan Amron to charge them with securities registration violations. TDI and Amron agreed to settle the charges without admitting or denying the allegations, and Amron agreed to pay a $10,000 penalty.