Snowmass homeowner agrees to $4M settlement with SEC
A Snowmass homeowner has agreed to pay more than $4 million to the Securities and Exchange Commission and not trade penny stocks for 10 years as part of an agreement with the federal agreement over his alleged marijuana racket.
In a deal finalized Wednesday in the U.S. District Court of Colorado in Denver, Jeffrey O. Friedland did not admit or deny the SEC’s accusations that OWC Pharmaceutical Research Corp. of Israel paid him 5.1 million shares of stock to promote the company’s marijuana without disclosing the arrangement to investors.
Yet court documents show he and his company Global Corporate Strategies consented to paying a disgorgement penalty in the amount of $2.1 million as well as $69,020 in interest to settle the case. Friedland also agreed to pay a $2 million civil fee to the SEC. Friedland signed the consent form Nov. 1; it was made public in the case Wednesday.
Friedland acquired the stocks in early 2017, and sold them in March at an average price of $1.27 per share, the SEC alleged. By doing so, Friedland reaped a profit of nearly $6.5 million, and used some of the money to buy a 2,796-square-foot Snowmass home for nearly $2 million in a cash transaction done in August 2017, the SEC alleged.
What made Friedland’s profits actually ill-gotten gains, the SEC alleged, was that he failed to publicly disclose that OWC gave him minority interest in its stock in exchange for touting it, which is against federal securities law. Friedland promoted its stock through blogs, media interviews, news releases and other mediums.
By the time the SEC sued Friedland in March 2018, the stock had dropped to 26 cents a share.
At one point during the litigation, Chief Judge Marcia S. Krieger ordered that Friedland could not sell his Snowmass Village home, located at 46 Meadow Road. The home remains under the ownership of Aspen Upper Ranch LLC, a Denver limited liability company that Friedland controls, according to Pitkin County property records.
Friedland was the featured speaker at the Aspen Business Luncheon in August 2016. The topic of his discussion was entitled “Marijuana: The World’s Most Misunderstood Plant.”
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