AG Platkin: NJ Bureau of Securities issues order to halt internet sales of fraudulent, unregistered securities tied to cannabis products
NEW JERSEY– Attorney General Matthew J. Platkin announced that the NJ Bureau of Securities (“Bureau”) took action Tuesday to halt an online entity from fraudulently offering unregistered securities in the form of investment packages related to various forms of marijuana and marijuana products.
In a Cease and Desist Order issued Tuesday, the Bureau directed online entity Buy Cannabis Stocks Investments Inc. a/k/a BCSI Inc. (“BCSI”) to immediately stop violating New Jersey’s securities laws and cease and desist from offering bogus investment stock packages related to pharmaceutical, medical marijuana, legal hemp/CBD oil, and legal marijuana that promise investors monthly returns ranging from 7.5% to 55%.
To lend an air of legitimacy to its enterprise, BCSI fabricated documents, including one purportedly signed by the Bureau’s Acting Chief indicating that BCSI was registered with the Bureau as a broker-dealer for a period of time.
“This is a brazen example of how scam artists exploit ‘hot’ industries to trick investors who are eager to get in on the ground floor of the next big thing,” Platkin said. “We will continue to monitor the online offering of financial products to identify and put a stop to scams like this one. And we urge investors to avoid letting the excitement of a new market cloud their good judgement and common sense.”
“Legal cannabis is an emerging industry, which makes it prime hunting ground for financial predators who will use every trick in the book to lure investors into their schemes,” said Cari Fais, Acting Director of the Division of Consumer Affairs. “The BCSI website is a chief example of this. Investors must do their homework and verify the legitimacy of all investment products, especially those making false promises of high returns with low risks.”
The Bureau found that BCSI has been engaging in fraud in connection with the offer and sale of securities on its website by promoting its investment packages with a litany of false claims.
The fraudulent conduct includes:
- Omitting material facts to potential investors such as the identity of their principals, how investors funds would be used, and the risks of their investment plans;
- Listing phony addresses for their places of business;
- Falsely claiming to be authorized to sell securities;
- Posting bogus testimonials from clients that use photos from the Internet, including one of a person from a reality television show; and
- Circulating a fake flyer for a supposed cannabis legislation summit sponsored by BCSI.
The investigation by the Bureau of Securities was conducted by Supervising Investigator Rachel Glasgow and Investigator Meryl Griff Hubscher of the Bureau of Securities within the Division of Consumer Affairs.
