A U.S. stock promoter has been sanctioned by regulators for touting an Israeli cannabis company’s stock without revealing his relationship with the firm.
The Colorado-based promoter, Jeffrey Friedland, and two companies that he controlled agreed to pay US$4.2 million to settle allegations from the U.S. Securities and Exchange Commission (SEC) accusing Friedland of touting the stock of OWC Pharmaceutical Research Corp. without disclosing that he was being paid to promote it.
Friedland and the firms settled the case without admitting or denying the allegations. They agreed to disgorge nearly US$2.1 million plus prejudgment interest, and Friedland agreed to pay a US$2-million penalty. Friedland and the firms also agreed to be banned from participating in penny stock offerings.
“Retail investors are entitled to the facts about promoters’ relationships with the companies they tout under our securities laws,” said Melissa Hodgman, associate director at the SEC.
“The $2 million penalty assessed against Friedland reflects the SEC’s strong commitment to protecting investors’ right to fair and accurate disclosure,” she added.