RCC Holdings Corp fka RCCH

[johnnyfiber]

The accusations are untrue, says Sam Israel, a New York attorney representing Gendarme, Lamphere, Rahimi and Armento.

“They met the requirement of being accredited investors, meaning they purchased the shares for the sake of investment, not to re-sell them,” Israel said.

He also says they satisfied the requirements of Regulation D, which says shares purchased for the purpose of distributing within one year aren’t exempt from registration. Thus, they did not violate Section 5 of the Securities Act, he said, the regulation requiring registering the sale of securities.

“Of greater concern to Rahimi and Lamphere is the fact that the (Securities and Exchange Commision) put in its complaint a number of scurrilous remarks having nothing to do with whether or not the registration requirements of the Securities Act were met,” Israel said. “They are gratuitous comments aimed at deriding the character of these individuals without any legitimate basis to do so.”

Israel pointed to an SEC statement that “Gendarme claimed on its website to be an accredited investor that bought stock available for sale offerings. ... In truth, Gendarme’s primary business has been buying stock in unregistered transactions from small publicly quoted companies who could not directly issue the stock to the public without registration (and the required disclosure that goes with registration) then quickly dumping most of the shares on the public market.’

“The suggestion that they were dumping shares is blatantly false and suggests some level of fraudulent intent not even part of the claim,” Israel said. “It was merely thrown in to malign my clients’ character.”

The SEC asks the court to order Lamphere and the other defendants to “provide an accounting and to disgorge their ill-gotten gains,” and to pay civil penalties. It also asks the court to ban Gendarme, Lamphere and Rahimi from ever offering penny stocks again.

Lamphere says he’s considering a countersuit against the SEC. Despite the inflammatory language in its complaint, the SEC did not file criminal charges, Lamphere said. “Rightfully so, for there has been no wrongdoing! We simply invested in small companies, raising capital in complete accordance with state and federal laws.”

He says the two-year investigation “only wasted the time of a multitude of salaried SEC attorneys and doubtlessly more taxpayer dollars than we ever made (which we in part paid for, being as we paid hundreds of thousands of dollars in capital gains and income taxes over the past three years).”

Lamphere also accused the SEC of employing a double standard.

“Facebook and Goldman Sachs are being permitted to devise a new ‘special purpose vehicle’ exemption to sell $500 million in ‘unregistered’ securities specifically to avoid the registration (and therefore filing and transparency) requirements of the SEC,” he said.

“Investments we made in securities that we bought and sold were in reliance on existing exemptions in federal and state laws that provide for the offer of unregistered securities specifically so that small, growing companies can avoid the lofty cost of registering and being a reporting company.

“So it seems the big dogs will be allowed to do as they please while small business and private investors like us take the heat in the name of ‘investor protection.’”

http://www.stowetoday.com/stowe_reporter/news/local_news/article_6984f596-1f2a-11e0-ae6a-001cc4c03286.html