Fong's 1990 SEC Troubles and Miami Herald Exposure:
Equitex’s chairman and chief executive, Henry Fong, was investigated by the Securities and Exchange Commission in 1990. “Fong, a Jupiter [Florida] resident and philanthropist, knows his way around money. As people rushed in to buy Equitex shares, Fong cashed out selling more than a third of his 1.6 million shares as the stock peaked. Back to the philanthropist Fong – the one who sold one-third of his stock in Equitex to investors clamoring to get on the Internet bank band wagon. The Miami Herald wrote, “According to a 1990 complaint filed by the SEC, Fong took part in an $8 million stock manipulation scheme involving newly minted shares of Star Publications. The story made the rounds as business journals drove home the problem of penny stock fraud. But the SEC case against Fong went nowhere, and it was dropped when Fong agreed to return $73,775 in profits.
In 1999, Duffy wasn’t concerned about Fong’s past, telling the Miami Herald, “I’m the one who put the deal together and Henry Fong has been true to his word. I have no problem with the guy. I think he’s one of the most trustworthy guys in South Florida.” Duffy forgot all about that statement two years later when he was fired, locked out of his offices, and removed as chairman in November 2001. Outraged at his treatment, Duffy sued the bank and received a judicial order on February 8, 2002, putting him back in charge and barring the new board from running the bank.
The Securities and Exchange Commission announced that it has accepted an offer of settlement submitted by Henry Fong (Fong), the chief executive officer of Equitex,Inc., a Denver business development company. Pursuant to the offer, Mr. Fong will consent to the entry of an administrative order by the Commission and the Commission will dismiss claims made against Mr. Fong and related parties in SEC v. Power Securities Corp.
The administrative order, instituted pursuant to section 9(f)of the Investment Company Act, requires that Mr.Fong cease and desist from committing or causing any violations of Sections 57 (a) (1) and(4) of the Investment Company Act and Rule 17d-1 promulgated thereunder; obtain written advice concerning the legality of certain future purchases or sales of securities by himself and Equitex; and disgorge $73,775 plus interest in regard to sales of Star Publications, Inc. securities during 1988. Mr. Fong neither admitted nor denied the Commission's findings that certain purchases and sales of Star Publications securities violated sections 57(a)(1) and (4) of the Investment Company Act and Rule 17d-1 romulgated thereunder. [SEC v. Power ecurities Corp., et al., civ. No. 90-1579, D.Colo.] (LR-14199)
On October 17, 2012, the Company issued a $25,000 convertible promissory note to Continental Equities, LLC (“Continental”). The Continental note is due on October 17, 2013, bears interest at 10% per annum. The conversion feature of the Continental note equals 50% of the average of the three lowest closing bid prices during the thirty day trading period prior to the conversion. The Company reserved 23,000,000 shares of common stock for the conversion of the Continental note. On March 26, 2013, Carebourn acquired the Continental note from Continental. During the nine months ended September 30, 2013, the Company issued 18,737,288 shares of common stock to Carebourn Partners, LLC. (“Carebourn Partners”) and Carebourn Partners’ assignee upon the conversion of the acquired Continental note.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.