News for 'CXAC' - (ENFORCEMENT PROCEEDINGS - Commission Charges Florida Resident with Unregistered Sales of Securities)
Jul 25, 2013 (SECURITIES AND EXCHANGE COMMISSION RELEASE/ContentWorks via
COMTEX) -- On July 23, 2013, the Commission filed settled charges against
Florida resident Jorge Bravo, Jr., for unlawful sales of millions of shares of a
microcap company to the public without complying with the registration
requirements of the Securities Act of 1933.
According to the SEC's complaint filed in the U.S. District Court for the
Southern District of New York, from April 2009 until May 2010, Bravo unlawfully
sold approximately 93 million shares of stock of AVVAA World Health Care
Products, Inc. in unregistered transactions for proceeds of approximately
$523,000. The complaint alleges that Bravo obtained the shares through three
"wrap around agreements." The wrap around agreements involved debts that AVVAA
supposedly owed to its officers, affiliates, or other persons closely associated
with the company (Affiliates) for unpaid compensation for services rendered.
Under the wrap around agreements, the Affiliates assigned to Bravo the debts
that AVVAA purportedly owed to them, and AVVAA consented to the assignment and
agreed to modify the terms of the original debt obligation so that the debts now
owed to Bravo were immediately convertible into shares of AVVAA common stock.
According to the complaint, within weeks of entering into the first two
agreements, and approximately four months after the execution of the third,
Bravo began selling the shares he obtained under the agreements to the public.
He then used some of the proceeds of the stock sales to pay the amounts owed to
the Affiliates under the wrap around agreements. The complaint further alleges
that Bravo had previously been involved in wrap around agreements, in his
capacity as of president and chief executive of Cross Atlantic Commodities,
Inc., a public company located in Weston, Florida, and that those wrap around
agreements were subjects of a prior Commission enforcement action, SEC v. K&L
International Enterprises, Inc., 6:09-cv-1638-GAP-KRS (M.D. Fla. Sept. 24,
2009). Bravo was not charged in that matter.
Without admitting or denying the SEC's allegations, Bravo agreed to settle the
case against him by consenting to the entry of a final judgment permanently
enjoining him from future violations of Sections 5(a) and 5(c) of the Securities
Act; permanently enjoining him from participating in any offering of penny
stock; and requiring him to pay disgorgement of $ 392,000, the amount of his
ill-gotten gains, plus prejudgment interest of $ 53,866 and a civil penalty in
the amount of $150,000. The settlement must be approved by the court.
The SEC's investigation was conducted by New York Regional Office Enforcement
staff Karen Lee, Christopher Ferrante, and Leslie Kazon. The Commission
acknowledges the assistance of FINRA, the British Columbia Securities
Commission, and the Ontario Securities Commission in this matter. (LR-22756)
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