Securities regulations, and their enforcement, impede capital formation.

Must be time for a cocktail party for crowd funding in Harisburg.

The Pennsylvania Department of Banking and Securities Bureau of Securities recently completed an investigation and obtained a consent order against of Premier Innovations Group, Inc. , Clique Vodka Ltd. and Noah Cohen.

Premier has offices in Pittsburgh, PA and Hubbard, Ohio. CV has offices in the same cities at the same street addresses. Cohan’s address is redacted in the April 17, 2017 consent agreement and order. Cohen is the CEO and founder of Premier and Premier owns CV. Premier bills itself as a very high end enterprise – as a liquor distributor.

The order states the Pennsylvania regulator received a complaint from a California couple and their Pennsylvania son in March 2015, regarding Premier and CV. They had invested $30,000 with Premier and Cohan by buying 8,571 shares of Premier stock (that comes out to $3.50 per share – what is referred to as a “penny stock”).

The investigation revealed that from November 2009 to July 2015 Premier, CV and Cohan sold Premier and CV stock to at least 65 investors for an amount totaling $638,000. Of those purchasers, 38 were Pennsylvania residents. Those individuals invested $345,000 in the stock of the two companies.

The investigation further revealed that Cohen made multiple misrepresentations and omissions to investors in the two companies. Those misrepresentations/omissions included:

  • the actual financial conditions of Premier and CV;
  • the financial risks of investing in Premier and CV; and
  • that the per share price of the two stocks was selected arbitrarily.

The shares of stock in the two companies were not registered or exempt from registration.

Premier, CV and Cohen agreed to pay a $4,000 fine and are barred for making any securities offerings or in any way acting as a broker–dealer or being associated with a broker-dealer for ten years.

Given the type of conduct recounted in the consent order, and the number of investors and amount invested, this result seems to be the proverbial “slap on the wrist.”

In doing an Internet search of Cohen, there are several articles on him and Premier in 2012-14. He was even named to a “Top 50 Businessmen in Pittsburgh” list back then. Premier appears to still be operating in Pittsburgh as an alcoholic beverage distribution company. However, it does not appear that Cohen was ever registered to sell securities in the securities industry nor were his companies registered to sell securities.

Investors should be very wary of “private offerings,” which appears to be what happened here. There is no mention in the consent order of Cohen/Premier making restitution, or the state ordering rescission (making Premier buy back the unregistered stock from purchasers at the purchase price plus interest), what happened to the original complaint or any other complaints – but it sounds like there should be.  Typically, wealthy investors with substantial extra funds to invest will participate in private offerings. Buying stock of a local liquor distributor at $3.50 a share does not sound like the type of private offering in which an investor should be interested.

Guiliano Law Firm

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