Plastic2Oil Inc (PTOI)

[arvitar]

"1. Defendants engaged in a scheme to commit securities and accounting fraud by stating materially false and inaccurate financial information on the financial statements of JBI, Inc. for two reporting periods during 2009. Specifically, the Defendants misrepresented and overstated the actual value of JBI’s assets and, hence, of the company itself by almost 1,000%.
The Defendants then used the overvalued financial statements in two private capital raising efforts (Private Investment in Public Equity or PIPES) that raised more than $8.4 million from unwitting investors.

2. At all relevant times, JBI purported to be a technology company focused on data restoration and recovery and environmentally engineered product development. JBI is purportedly involved in the research and development of a process designed to convert plastic waste into oil, known as “Plastic2Oil” or “P2O”. JBI is a p ublicly-traded company that files periodic reports with the Securities and Exchange Commission that includes its financial statements. During the third quarter of 2009 and the year end 2009, JBI materially overstated certain assets in an effort to bolster its balance sheet . Specifically, in its financials JBI listed
media credits purchased by the company for $1,000,000 in common stock as having a value of $9,997,134, which made the media credits the single largest asset on JBI’s balance sheet.

3. The almost 1,000 % overvaluation of the media credits substantially misrepresented the actual value of JBI’s assets and, hence, of the company itself. The Defendants then used the overvalued financial statements in two private capital raising efforts (Private Investment in Public Equity or PIPES) geared toward raising the capital necessary to begin commercial operation and production of P2O. JBI raised over $8.4 million for the company in these PIPES relying on misrepresentations to investors about the company’s assets and valuation. Shortly after obtaining the approximately $8.4 million in financing the company issued a public statement indicating its financial statements could no longer be relied upon due, in part, to the erroneous valuation of certain assets on the balance sheet (i.e., the media credits, among other things).

4. By engaging in the conduct alleged herein, JBI violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B) and
13(b)(5) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5, 12b-20, 13a-1, 13a-11 and 13a-13 thereunder.

5. By engaging in the conduct alleged herein, Bordynuik violated Sections 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5, and Section 13(b)(5) of
the Exchange Act and Rules 13b2-1 and 13b2-2 thereunder, and Rule 13a- 14. In addition, by engaging in the conduct alleged herein, Baldwin violated Sections 17(a) of the Securities Act,
Section 10(b) of the Exchange Act and Rule 10b-5, and Section 13(b)(5 ) of the Exchange Act and Rule 13b2-1 thereunder, and Rule 13a-14. Furthermore, Bordynuik and Baldwin aided and
abetted JBI’s violations of Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20 and 13a-1, thereunder, and, as to Bordynuik only, Rule 13a-11
thereunder.

6. Based on these violations, the Commission seeks the following relief against the Defendants: (i) entry of permanent injunctions prohibiting all Defendants from engaging in future violations of the sections of the securities laws that they have violated in connection with the conduct described herein; (ii) an order requiring all Defendants to disgorge their ill-gotten gains and pay pre-judgment interest; (iii) an order requiring all Defendants to pay appropriate civil monetary penalties ; and, (iv) an order barring Bordynuik and Baldwin, respectively, from serving as officers or directors of a public company. "
http://www.sec.gov/litigation/complaints/2012/comp22220.pdf