March 8, 2018

The SEC has filed fraud charges in a scheme to inflate the share price of an Israeli medical marijuana company’s common stock.  The court today entered a partial asset freeze of the proceeds of the alleged fraud. The SEC’s complaint, which was filed on March 5 in federal district court in Denver, alleges that Colorado resident Jeffrey O. Friedland touted OWC Pharmaceutical Research Corp. while misrepresenting both his own investment in OWC and the true nature of his professional relationship with the company.  As alleged in the complaint, Friedland was compensated with more than five million OWC shares for handling the company’s media and investor relations efforts.  Friedland then touted OWC to media, industry, and investors, creating the false impression that he was merely an early investor in OWC and later, a member of its advisory board, without disclosing his role as a paid promoter.  Friedland is alleged to have sold his OWC shares for almost $7 million, after which he and his spouse placed a portion of the proceeds in a investment account in the name of Lane 6552, acquired two homes in all-cash purchases, and made other purchases and uses of the funds.  Friedland’s sales took place from March through September 2017 and were made through accounts in the names of Lane 6552 LLC and Intiva Pharma LLC.  The United States District Court today, among other things, froze certain accounts that received proceeds of Lane 6552’s sales of OWC stock. SEC

Tagged in: Misrepresentations, Securities Fraud,