SEC Receives Final Judgement Against Crowdfunding Issuer 420 Real Estate

The Securities and Exchange Commission (SEC) has received final judgments against crowdfunding issuer, 420 Real Estate, LLC, and its CEO, Willard Jackson.

The court case, SEC v. Shumake, has previously obtained judgments against Defendants TruCrowd, Vicent Petrescu, and Nicole Birch. According to FINRA, TruCrowd is now “statutorily disqualified.”

The case was originally filed in September 2021. The complaint alleged that Robert Samuel Shumake, Jr., and Jackson conducted an unregistered crowdfunding offering through 420 Real Estate, on TruCrowd, Inc., a registered crowdfunding portal.

The SEC’s complaint claims that Shumake and Jackson raised $888,180 from retail investors through 420 Real Estate with Shumake, with assistance from Jackson, hiding his involvement in the offering from the public due to his prior criminal conviction. Shumake and Jackson allegedly diverted investor funds for personal use rather than using the funds for the purposes disclosed to investors. On January 28, 2022, the Court entered bifurcated judgments against Jackson and 420 Real Estate.

Without admitting or denying the allegations of the complaint, Jackson and 420 Real Estate consented to the entry of final judgments permanently enjoining them from violating the registration provisions of Section 5 of the Securities Act of 1933, the antifraud provisions of Section 17(a) of the Securities Act, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Jackson also consented to the entry of an officer and director bar. The judgments order: (i) a civil penalty of $360,000 against Jackson; (ii) disgorgement including prejudgment interest of $306,913 against Jackson; and (iii) disgorgement including prejudgment interest of $477,420 against 420 Real Estate and Jackson on a joint and several basis.

The SEC’s litigation continues.

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