GrowLife Inc (PHOT)

[PRmaniac]

Seems PHOT execs knew what was happening? It is not clear if the SEC investigation of PHOT will result in more charges, but some of those listed below, including the CEO, may be a bit worried?

Hegyi granted himself cheap options, then later cut the option prices in half. Looks like he was involved in enriching himself, while shareholders got the steep revenue declines.

Sterling Scott's wife sold stock 1 day before the suspension, and tried to sell more, but the suspension stopped her.

The current CEO was granted tons of warrants, too, and even later decided to change the warrant price to 1 cent.....
Excerpt from 2014
http://www.weedist.com/2014/08/stock-manipulation-claim-in-marijuana-market/

This year, Rotenberg says, GrowLife’s annual report revealed that Scott and other executives issued GrowLife stock worth $1.1 million to Scott and CFO John Genesi, and gave directors Anthony Ciabattoni, Jeff Giarraputo and Alan Hammer each 500,000 shares. In the fallout, Ciabattoni, Giarraputo, and Hammer were “caught with their hands in the company till,” and rescinded their grants of shares, the complaint states.

The company also paid president Marco Hegyi 25 million warrants for GrowLife stock, director Justin Manns 4,666,667 shares, Robert Hunt 12 million in stock options, and former GrowLife executives Craig Ellins and Bob Kurilko 500,000 and more than 1.6 million in shares, respectively, the complaint states.

Rotenberg claims the executives were given the shares at the bargain basement price of $0.02 per share (note: Hegi later repriced those at 1 cent/share for himself....wow), when shares were trading at $0.58 per share. Though Scott’s wife, Elisabeth Wedam Scott, was not given any stock the previous year, the complaint states that she and her husband offloaded more than 5.7 million shares on April 9.

After the annual report was filed, SEC issued a trading suspension against the company on April 10. But that did not stop Elisabeth Wedam Scott from attempting to dump an additional 8 million stocks on the market a day later, the complaint states.