Charles Vista, LLC, formerly known as D.C. Evans & Co. (“DCE”), was a registered broker-dealer with its principal place of business at 100 Williams Street, 18th Floor, New York, New York 10039. DCE was acquired by Gregg C. Lorenzo, through GJL Holding Company, LLC, following his departure from John Thomas Financial in 2009. Lorenzo is the sole owner of GJL Holding Company, LLC, and accordingly, Charles Vista, LLC.
Prior to forming Charles Vista, LLC, Lorenzeo was associated with five (5) different brokerage firms since 2002, and since that time has been subject to one regulatory action and seven (7) reported customer initiated, investment related complaints and arbitrations (involving his personal conduct), alleging, among other things, fraud.
Lorenzo Settled Civil Fraud Charges
In 2005, Gregg Lorenzo settled civil fraud and other charges with the State of Montana — related to his employment at a brokerage firm — and agreed to withdraw his securities license in Montana for two years and pay a $35,000 fine. In February 2007, the National Association of Securities Dealers found that Gregg Lorenzo had violated agreements with the New Jersey and Indiana securities authorities, which had imposed strict supervision requirements on Gregg Lorenzo. In February 2008, Gregg Lorenzo entered into a consent order with the Iowa Securities and Regulated Industries Bureau requiring heightened supervision of Gregg Lorenzo and precluding him from performing supervisory responsibilities for two years. In a July 16, 2009 Agreement and Order with the Idaho Department of Finance, Idaho v. John Thomas Financial, et al., Docket No. 2008-7-11, the Idaho Securities Division sanctioned Gregg Lorenzo for negligently failing to disclose the Iowa consent order in his form U-4.
FINRA Barred Gregg Lorenzo
The order directed Gregg Lorenzo to withdraw his application for registration as an investment adviser representative and to pay a civil penalty of $1,250. On June 18, 2013, the Financial Industry Regulatory Authority (FINRA) barred Gregg Lorenzo from associating with any FINRA member firm for his refusal to appear for an on-the-record interview (pursuant to FINRA Rule 8210) regarding a FINRA investigation of Charles Vista.
SEC Investigates Lorenzo
Last spring, Lorenzo became a target under investigation by the United States & Exchange Commission for the violation of the anti-fraud provisions of Section 17(A) of the Securities Act of 1933, and Section 10B-5 of the Exchange Act of 1934.
Beginning in or about September 2009, Gregg Lorenzo and Charles Vista began soliciting customers of Charles Vista to induce them to invest in convertible debentures issued by a start-up waste management company called Waste2Energy Holdings, Inc.
In 2008, Waste2Energy, Inc. did a reverse merger with Maven Media, which prior to the acquisition of Waste2Energy, Inc. had been a shell corporation. The company based in Iceland supposedly operated a waste processing facility in that country. Shortly thereafter, W2E’s stock began to be quoted on the Over-The-Counter Bulletin Board (OTCBB).
From in or about September 2009 through May 2010, Gregg Lorenzo’s firm, Charles Vista, was the exclusive placement agent for an issuance of 12% W2E debentures, with a maximum issuance amount of $15 million. The Debentures were convertible to W2E stock, which is a penny stock.
Charles Vista’s financial interest in the Debentures offering was considerable. According to documents attached to some of W2E’s SEC filings, Charles Vista was to receive:
- a 10% “commission” on the gross proceeds of all Debentures sales
- a 3% “expense allowance” on the same proceeds
- a consulting fee of $10,000 per month for twelve months starting “at the initial closing” of the Debentures offering
- an “investment banking fee equal to $125,000 for each $2,500,000 of Debentures sold, up to a total of $750,000”
- another 13% commission/expense allowance “upon the exercise of the Warrants issued to the purchasers of the Debentures”
- a “warrant to purchase up to 4.5 %” of W2E’s outstanding shares “proportionate to [the] amount of Debentures sold” (at a $.01 exercise price)
The SEC found that Gregg Lorenzo personally attempted to sell the Debentures to numerous potential investors. In his oral sales pitches to at least three potential investors, Lorenzo made false and misleading statements designed to (i) ameliorate concerns about the investment’s downside risk by misrepresenting W2E’s financial condition and business prospects; and (ii) make the Debentures’ stock conversion feature appear valuable by making baseless predictions about the future price of the company’s stock and its future listing on a major exchange
Among other things, Gregg Lorenzo had no reasonable basis for making the statements, as he knew or recklessly disregarded the truth that W2E never had a contract for “$100 to $200 million”; W2E was an extremely speculative stock — it was a start-up company at an early stage of development, and its financial condition was extremely precarious; FINRA had notified the company that if it did not file a delinquent Form 10-Q by September 21, its stock could be de-listed from the OTCBB, and No “non-public information concerning W2E” existed, and none of W2E’s public statements after September 23, 2009 indicate that any such undisclosed favorable information about the company existed on or around September 23, 2009.
Lorenzo was also found to have lied to investors that: The Company has over $10 million in confirmed assets; The Company has purchase orders andletters of intent for over $43 million orders and that Charles Vista has agreed to raise additional monies to repay these Debenture holders (if necessary).
Gregg Lorenzo Barred by SEC
On November 20, 2013, the SEC entered an Order, barring Gregg Lorenzo from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization and barred from participating in any offering of a penny stock, including: acting as a promoter, finder, consultant, or inducing or attempting to induce the purchase or sale of any penny stock.
Gregg Lorenzo was also fined $525,000 in civil penalties and Charles Vista shall was fined $4,350,000.
Guiliano Law Group
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