The Securities and Exchange Commission (SEC) has obtained a final judgment against She Beverage and its principles, including Lupe L. Rose, Sonja F. Shelby, and Katherine E. Dirden. The charges pertain to a suit filed by the SEC in 2021. Approximately 2000 investors were impacted – from 38 different states plus Guam, Puerto Rico and Washington, DC.
According to the SEC, She Beverage raised approximately $15.4 million in an unregistered securities offering buttressed by false statements addressed to investors. A Form D filed with the SEC indicates the first sale was in 2017.
According to the initial complaint, the principals used little of the funds raised on operational activities while spending money on vacations and luxury purchases, including the purchase of eight cars, including a Porsche. Approximately $6 million went directly into the defendant’s personal bank accounts, claims the SEC.
The complaint states that a distributed investment guide claimed that the company had received offers to purchase the company at a valuation of $120 million to $500 million. Apparently, this was false.
Later, the company claimed it was days away from going public.
A Form S-1 registration statement was filed in 2020, looking to offer 6.8 million shares at $15/share. This was the first time the company issued audited financial statements. The SEC issued an order declaring the registration statement abandoned in 2021.
At one point, the FBI posted a page to collect information from defrauded investors in She Beverage.
The final judgment includes the $12,021500 in disgorgement of ill-gotten gains plus $738,774 in prejudgment interest. The Court also imposed a civil monetary penalty of $669,687 against Rose, a civil monetary penalty of $334,842 against Shelby, and a civil monetary penalty of $334,842 against Dirden.
In a criminal case, Rose was recently arrested by federal authorities and charged with 38 counts of securities fraud and one count of making false statements to federal investigators. If convicted of all charges, Rose could face a statutory maximum sentence of 20 years in federal prison for each securities fraud count and up to five years in federal prison for the false statements count.
