Hemp Inc (HEMP)

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A Nevada federal judge has upheld sanctions against two U.S. hemp company executives in a long-running case brought by the U.S. Securities and Exchange Commission (SEC).

The ruling on the sanctions is the latest development in a lawsuit the SEC filed in 2016 charging fraud against Las Vegas-based Hemp Inc., company CEO Bruce Perlowin, principals Barry Keith Epling and Jed M. Perlowin, as well as four shell companies.

‘Egregious’ violations

As the case is winding through U.S. courts, U.S. Magistrate Judge Peggy A. Leen recently handed down the sanctions for “egregious” discovery violations, after the defendants failed to disclose loans between Perlowin and Epling in the course of the ongoing lawsuit. She also found that Epling deceived the SEC and his own lawyers about his personal tax returns.

Attorneys for the defendants appealed to a higher judge, U.S. District Judge Jennifer A. Dorsey, to set the sanctions aside, suggesting they were based on “errors” that were “harmless” and would confuse a jury. Dorsey refused, however, noting: “Because Judge Leen’s order is not clearly erroneous or contrary to law, I overrule the objections.”