Wealthy Investors Duped By Alleged Fraud At California Investment Firm With Ties To Marijuana Producer

A small investment firm operating out of Humboldt County, California, is getting sued by the Securities and Exchange Commission, reported Green Market Report's John Schroyer. Sisu Capital is associated with the local cannabis industry and is charged with violating its fiduciary obligations towards its shareholders.

The Lost Coast Outpost reported that a licensed California marijuana manufacturer, Sisu Extracts, had an executive in common with the firm - John Figueiredo - who was the CEO of both companies and a registered financial advisor with Sisu Capital from 2015-2016.

The lawsuit was filed in the U.S. District Court against Sisu Capital on August 1. The allegations claim that Timothy Overturf took charge of and managed Sisu Capital following his 18th birthday in 2013, during a time when his father, Hansueli, was under suspension as an investment adviser.

For two years, Timothy Overturf alone garnered $858,000 in fees while acting against the welfare of their clients; he and his father ended up with at least $2 million. During this time, Hans Overturf's suspension was concealed as unauthorized trades were done for client accounts.

According to the lawsuit, Sisu Capital managed a total of $51.7 million in assets for 42 affluent clients, to whom the duo supposedly provided lucrative investment recommendations.

SEC Is On Fire

Meanwhile, as yet another earnings season winds down, top executives and entrepreneurs will undoubtedly provide fresh insight into how their respective businesses have performed over the past few months at the upcoming Benzinga Cannabis Capital Conference in Chicago, Sept. 27-28. The SEC has kept a sharp eye on the cannabis space over this period. Some would even say that it has been targeting the marijuana industry for misconduct for months.

Last year, the agency launched proceedings against CannAwake Corp. for failing to file financial reports since December 2018, the year the company reported a net loss of $1,109,506 for the prior nine months.

Before that, the SEC charged six individuals and two companies for their involvement in a stock promotion scheme, including Emerald Health Pharmaceuticals, Elegance Brands Inc. (now Sway Energy Corp.), and High Times Holdings.

Earlier this year, the agency accused Patriot Brands Inc., a cannabis cultivation and distribution company, its CEO and five other entities and individuals of participation in a long-running scheme in which they raised more than $30 million from more than one hundred investors across the country and siphoned off millions to enrich themselves.

In May, the SEC obtained an emergency order to halt an alleged fraud and Ponzi-like scheme by Integrated National Resources Inc., which does business as WeedGenics, and its owners, Rolf Max Hirschmann and Patrick Earl Williams who raised more than $60 million from investors to expand their cannabis operations, but have instead used the majority of funds to make $16.2 million in Ponzi-like payments.

The Benzinga Cannabis Capital Conference, the place where deals get done, is returning to Chicago this Sept 27-28 for its 17th edition. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.

Photo: Courtesy of NikolayFrolochkin and ganjaspliffstoreuk by Pixabay