Natural Blue Resources Inc., a company cofounded by Nancy Pelosi’s son, Paul Pelosi Jr., was charged with securities fraud last week after the SEC discovered that two convicted criminals were at the company’s helm.
Pelosi Jr. was the president and chief operating officer of the company, which is aimed at selling “environmentally-friendly” investments. Four individuals, including Ex-New Mexico governor Toney Anaya, were charged by the SEC and were suspended from trading in the company’s stock.
SEC Charges and Allegations in the Natural Blue Case
According to the SEC, James E. Cohen and Joseph Corazzi, both of whom had previous fraud convictions, were secretly running the company. They claimed to be outside consultants, but the SEC’s evidence shows that they actually controlled the company’s business decisions and failed to disclose their previous convictions with investors.
This kind of nondisclosure can form the basis of a Suitability Claim.
The SEC has suspended trading in Natural Blue stock and discovered that the company has failed to file periodic reports, as required by law, with the SEC for the past four years.
Anaya, Corazzi, Cohen, and former executive Erick Perry were each charged with federal fraud violations. According to the SEC, Natural Blue made “various material misrepresentations about the company, its contracts, and its anticipated revenue in a February 2011 press release as well as on a website and verbally to investors.”
Having cofounded the company in 2009, Pelosi Jr.’s involvement in this case is currently unknown. He served as the company’s president and chief operating officer until January 11, 2010. However, other sources cite Pelosi as the company’s president just last year with Anaya listed as a chairman and the CEO.
Anaya will be barred from participating in any penny stock company for at least five years and fined an undetermined amount. Perry also settled with the SEC, agreeing to pay a $150,000 fine, and permanently banned from serving as an officer or director of a public company and from participating in any offerings of penny stock.
Standing Up Against Securities Fraud
Cases like the Natural Blue Resources scandal are reminders that investment fraud and broker negligence can happen anywhere even in companies that appear reputable or “green-friendly.”
When corporate officers, brokers, or executives misrepresent facts, conceal criminal histories, or manipulate information, investors can face devastating losses often caused by failure to diversify or concentration in risky assets., including from Churning Investing misconduct. The Frankowski Firm investment fraud lawyers are committed to holding wrongdoers accountable and fighting for the rights of those harmed by securities fraud and broker misconduct, including victims of Breach of Fiduciary Duty. If you believe you’ve been misled or have suffered losses due to fraudulent investment practices like selling away or other unauthorized transactions, contact us today for a confidential consultation. Our experienced team will review your case, explain your legal options, and work tirelessly to help you pursue the justice and recovery you deserve.