On September 27, 2019, the Securities and Exchange Commission announced charges against Hologram USA Networks Inc., a California business specializing in theatrical holographic shows, and its CEO Alkiviades David, for engaging in the unregistered offer and sale of securities and for making false and misleading statements to investors and prospective investors in connection with that offering. Hologram USA used general solicitation and allowed non-accredited investors to purchase convertible shares, in violation of certain federal registration requirements. Its business plan included the creation of “resurrection” performances in which the holograms of famous deceased artists would be used to create “live” concerts with the deceased. It contained false and misleading information concerning Hologram USA’s right to present these shows, and its current theater network in which it planned to broadcast them. The SEC’s complaint, filed in federal district court in Manhattan, charges Hologram USA and David with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 and the registration provisions of Sections 5(a) and 5(c) of the Securities Act. In this case, I believe the auditors should not be held liable because they had no way of knowing these fraudulent activities done by this company. Their intention was to mislead the investors from the beginning, and therefore, I am sure they did their best to hide their fraud from the auditing firm. Their business plan also seems very technical and uncommon, which would have also made it difficult for the auditors to detect illegal offerings.
August 29, 2019 the Securities and Exchange Commission site had charged Cambridge Capital Group Advisors. They are an investment firm adviser based out of Tallahassee. They were defrauding investors which most of the investors were retired NFL players that had concussions that resulted in brain injuries. He stole their personal mortgage loans and approximately $612,000 and fudged the books so it looked as if the funds were still there. Cambridge Capital Group Advisors president has a history of defrauding investors. He failed to disclose to his investors and clients that he had served time in jail for bankruptcy and tax fraud. I feel that the auditor perhaps conducted their audit correctly and used the accounting process. Because the books were fudged there really was no way to know that the President of Cambridge Capital Group Advisors stole the money.