StockKings Capital LLC and Gregory Antonius Lewis (CEO) of New York, New York, have been sanctioned by Financial Industry Regulatory Authority (FINRA) according to an Order containing findings that false and misleading marketing communications were made by StockKings and Lewis and that written disclosures were not made in private placement offerings. Department of Enforcement v. StockKings Capital and Gregory Antonius Lewis, Order Accepting Offer of Settlement, Disciplinary Proceeding No. 2019060648701 (March 11, 2022).
According to the Order, Lewis has owned StockKings Capital since 2013. He controls the decisions made by the firm as Chief Executive Officer. The Order states that in 2015, Lewis tapped investors for investments in a business that was purportedly capable of analyzing and aggregating investor profiles on a technology platform. $2,700,000.00 was raised between 2015 and 2019 through private securities offerings. But the financial technology platform was never launched by Lewis, according to FINRA.
The Order states that between November 2016 and December 2018, Lewis and the securities broker dealer made exaggerated, promissory, misleading, unwarranted, and false statements concerning StockKings Capital, StockKings Holdings, and the website that was supposed to house this financial technology platform.
FINRA notes that investors were told about a patent that Lewis and StockKings had. Investors were misled about the company’s progress in launching the product. Investment materials contained false statements, including that FINRA’s regulatory activities stalled the launch. And revenue projects and valuation claims were unwarranted and baseless, the regulator states.
For example, FINRA notes that a December 2017 Memorandum contained unreasonable revenue forecasts. The company claimed to expect 74 enterprise subscribers and $2,300,000.00 from 26,000 investors by 2018. The company claimed that revenues would increase to $58,000,000.00 by 2022. Yet, investors were not provided with the proper information to evaluate the investments. FINRA found that Lewis and StockKings Capital violated FINRA Rules 2010 and 2210(d)(1) for this reason.
The regulator also finds that between January 2017 and September 2019, more than $42,000.00 in funds designated for StockKings Capital had instead been used by Lewis to pay for his personal expenses. FINRA states that the firm took those expenses on as business expenses, which was inaccurate. The regulator states that Lewis and StockKings violated FINRA Rules 2010 and 4511 for this reason.
The Order additionally states that important information was withheld in private placement offerings. Nondisclosures in 2015 and 2018 concerned the use of investor proceeds, selling compensation, and offering expenses. Offering documents were sent to FINRA late regarding two other private offerings. Lewis and StockKings violated FINRA Rules 2010 and 5122 because of this.
StockKings was censured. Lewis and StockKings were collectively fined $100,000.00, and Lewis was suspended for seven months from associating with any FINRA member in any capacity.
Lewis has been identified in three customer initiated investment related disputes concerning accusations of his wrongdoing while he was registered with Continental Broker-Dealer Corp. FINRA Public Disclosure shows that a customer initiated investment related FINRA securities arbitration claim regarding Lewis’ activities was resolved for $125,000.00 in damages founded on allegations of misrepresentation. Another customer initiated investment related FINRA securities arbitration claim involving Lewis’ conduct was settled for $24,999.00 in damages supported by accusations of unauthorized trading.