A recent press release stated that the SEC issued a stop order against Counseling International. The stop order prevented the company from offering their shares to the public. The rationale behind the stop order, according to the press release, is that the SEC determined the Los Angeles based company had false and misleading information in their registration statement.

The press release went on to state that the company’s registration statement failed to disclose the identity of the company’s control persons and promoters. Such disclosures are mandatory under securities law. Also, the registration statement falsely describes the circumstances under which the former CEO departed. Since August 2012, when the registration statement was first filed, Counseling International amended the statement four times.

Stop orders are a means for the SEC to proactively prevent fraud by stopping the process before there is a chance the stock can be sold to the public. Counseling International consented to the stop order and agreed to not engage or participate in any unregistered offering of securities, as stated in Rule 506 of Regulation D, for five years from the issuance of the stop order.

If you or someone you know has lost money as a result of an investment, please contact Richard Frankowski at 205-747-1903 to discuss your potential legal remedies.