The Securities and Exchange Commission (SEC) has charged Oi2Go Media Technologies and its CEO Anthony Michael Hernandez with conducting offering fraud. According to the SEC, Hernandez raised about $1.317 million from around 750 investors in a Reg A+ offering, which took place in 2018.
Under the Reg A+ exemption, issuers may raise capital online from both accredited and non-accredited investors. The SEC’s complaint alleges that Oi2Go and Hernandez did not qualify for an exemption from registration.
The SEC claims that Hernandez defrauded investors in regard to claims his company had the ability to stream content on a functioning media platform. adding that Hernandez misappropriated over $450,000 of investor funds for personal expenses.
Simultaneously, the Florida Attorney General’s Office of Statewide Prosecution has announced criminal charges against Hernandez.
The SEC alleges that Oi2Go and Hernandez made false and misleading claims in TV commercials and in materials posted on a website aimed at prospective investors regarding Oi2Go’s current ability to stream media content. The TV commercials allegedly instructed viewers to call a number to invest, and the phones were answered by individuals acting as unregistered brokers. The complaint alleges that Oi2Go and Hernandez aided and abetted these individuals and associated entities in acting as unregistered brokers.
To quote the complaint:
“From August 16, 2018 through at least March 2019, Hernandez and Oi2Go failed to meet Reg A’s requirement of simultaneous delivery of the Offering Circular with the Oi2Go TV ads as the offering circular was not and could not be delivered to viewers in this medium. The failure to do so deprived investors of critical material information regarding Oi2Go’s lack of operational status. Moreover, the TV ads were the primary method used by Oi2Go to promote the offering.”
Allegedly Hernandez failed to file periodic and current reports as well.
The SEC’s complaint, filed in the US District Court for the Middle District of Florida, charges Oi2Go and Hernandez with violating the antifraud provisions of the federal securities laws, with conducting an unregistered offering in violation of Sections 5(a) and (c) of the Securities Act of 1933, and with aiding and abetting others who acted as unregistered brokers in violation of Section 15(a) of the Securities Exchange Act of 1934. The Complaint seeks permanent injunctive relief, disgorgement plus prejudgment interest, civil penalties, as well as officer-and-director and penny stock bars against Hernandez.
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