Snowmass homeowner denies pump and dump of marijuana stocks
Attorneys for the Snowmass homeowner facing federal charges for defrauding investors are claiming he had nothing to hide as evidenced by his “repeated public disclosures” about the marijuana stocks he promoted and later sold.
A formal reply to the Security and Exchange Commission’s lawsuit April 20, as well as a motion to dismiss the case, marked defendant Jeffrey Friedland’s first legal defense to allegations that he made $7 million in ill-gotten gains through a marijuana stock scheme.
The SEC sued Friedland in early March in Denver federal court on securities-fraud allegations that OWC Pharmaceutical Research Corp., an Israel marijuana-based pharmaceutical company, paid him 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 alleges Friedland 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 motion April 20 to dismiss the suit, however, argues the SEC failed to meet legal criteria to support its claims against Friedland, including that he knowingly attempted to defraud investors.
“Mr. Friedland disclosed his relationship with OWC and his ownership interest in the company at every turn,” the motion says.
The motion also contends that “Mr. Friedland’s repeated, public disclosures of his investment in OWC and his affiliation with OWC as its advisor and as an investor relations representative in the United States refutes the notion that he was trying to deceive investors.”
The SEC has alleged that Friedland, who lives in Denver, used a limited liability company to make a $2 million cash purchase of a 2,796-square-foot home located at 466 Meadow Road in Snowmass in August 2017.
On March 29, Chief Judge Marcia S. Krieger ordered an asset freeze pertaining to the Snowmass home and Friedland’s Denver home, as well as nearly $3.1 million in accounts. Assets frozen under that order cannot be sold or have their ownership transferred during the period of litigation, unless the judge decides otherwise.
Friedland, as well as defendants Global Corporate Strategies and Intiva Pharma LLC, are represented by three attorneys — Mark Nadeau of Phoenix, Ilana Eisenstein of Philadelphia and Jonathan Haray of Washington, D.C.
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