Judge freezes ownership of marijuana mogul’s Snowmass home
A Snowmass Village residence cannot be sold in the near future as part of a recent ruling from the federal judge presiding over a securities fraud case against a Denver marijuana investor.
Last week, Chief Judge Marcia S. Krieger, after her March 9 denial of the Securities and Exchange Commission’s bid for temporary injunction to freeze the Snowmass asset allegedly tied to cannabis mogul Jeffrey Friedland, ordered that he and his co-defendants are “enjoined from selling, transferring, mortgaging, encumbering, or collateralizing, or authorizing or allowing the encumbering or collateralization of the property located at 466 Meadow Road in Snowmass, Colorado.”
Krieger’s order was in response to a joint request by both the SEC and the defendants to freeze the Snowmass property, among other defendant-controlled assets, during the period of litigation. Other frozen assets include Friedland’s Denver home, as well as nearly $3.1 million in accounts.
Although the “Friedland defendants dispute the allegations in the SEC’s complaint and the SEC motion,” noted the joint filing, they agreed to the preliminary injunction for the asset freeze.
The SEC sued Friedland in early March in the U.S. Court of Denver on securities-fraud allegations that he was paid by a marijuana-based pharmaceutical company — OWC Pharmaceutical Research Corp. of Israel — to tout its stock through blogs, media interviews and other mediums without disclosing that association. It is illegal under federal securities laws to publicize a company’s stock for compensation without disclosing that.
The SEC also contends Friedland used $7 million in ill-gotten gains to buy, among other things, the 2,796-square-foot Snowmass home for nearly $2 million in a cash transaction in August 2017.
Friedland allegedly dumped the 5.1 million shares he received to campaign for the stock, as well as 1.3 million shares he bought for $120,000 in 2013, for about $7 million in 2017, the complaint alleges.
In addition to Freidland, a host of limited liability companies are named as defendants in the complaint. As of Thursday, the defendants had retained the international firm DLA Piper as well as the Denver-based Feder Law Firm for their defense, according to court documents.
The defendants have until April 20 to file a response to the complaint.