Last week, the Securities and Exchange Commission (SEC) filed an administrative proceeding in regards to Vincent Petrescu, the founder of the crowdfunding platform TruCrowd.
In September of 2021, TruCrowd was hit with fraud charges, in the complaint SEC v. Robert Samuel Shumake, Jr, along with three issuers in regards to allegations of two fraudulent securities offerings.
In the administrative document, the SEC indicated that Petrescu has submitted a settlement offer that the Commission has determined to accept.
According to the document:
“The Commission’s complaint alleged, among other things, that Petrescu permitted two issuers to conduct fraudulent crowdfunding offerings through TruCrowd’s platform despite multiple warning signs of possible fraud or other harm to investors. Petrescu assisted these issuers and their affiliated individuals with preparing and filing Forms C and offering statements. Petrescu never questioned why the Forms C and offering statements omitted any mention of another individual with a criminal record who was actively involved with the offerings and the management of the issuers. Petrescu also failed to address a series of red flags concerning possible fraud and investor harm, including but not limited to complaints and concerns raised by investors, an attorney, and individuals affiliated with the issuers.”
Petrescu, who is a CPA, is suspended from appearing or practicing before the Commission as an accountant. After three years, he may request reinstatement.
On a related note, Nicole T. Birch, an individual who was part of the alleged fraudulent offering, also submitted a settlement offer which the SEC has decided to accept. According to the document filed by the SEC:
“The Commission’s complaint alleged, among other things, that Birch, along with others, conducted a fraudulent and unregistered crowdfunding offering through a cannabis company, raising over $1 million from thousands of investors. Birch, with the assistance of others, prepared the offering statement for the company which misrepresented the use of proceeds from the offering. In addition, the offering statement falsely stated that the company employed an experienced management team and that it had contingently acquired certain real estate. The offering statement also omitted the significant involvement in the offering of an individual with a past criminal conviction. Finally, Birch diverted offering proceeds to herself and to her law firm.”
The settlement means that Birch is suspended from appearing or practicing before the Commission as an attorney.
When the SEC announced the enforcement action against TruCrowd the agency noted it was the first involving Reg CF (Regulation Crowdfunding).