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PURE Bioscience, Inc. Message Board

  • seattle49 seattle49 May 10, 2013 12:59 AM Flag

    OT !: SEC Charges Executives and Auditor of Electronic Game Card Company with Fraud

    Washington, D.C., Nov. 8, 2012 — The Securities and Exchange Commission today charged three executives with repeatedly lying to investors about the operations and financial condition of an Irvine, Calif.-based company that purported to sell credit card-size electronic games. The SEC also charged the company’s independent auditor with facilitating the scheme.

    The SEC alleges that chief executive officer Lee Cole and chief financial officer Linden Boyne orchestrated a scheme in which Electronic Game Card Inc. (EGMI) enticed investors by claiming to have millions of dollars in annual revenue, hold millions of dollars in investments, and own an off-shore bank account worth more than $10 million. In reality, many of the company’s purported contracts were phony ...

    The SEC charged the company’s outside auditor — certified public accountant Timothy Quintanilla — with repeatedly issuing clean audit opinions about EGMI based on reckless and deficient audit work. Also charged is Kevin Donovan, who later replaced Cole as CEO and ignored many red flags about the accuracy of the company’s public statements and the integrity of Cole and Boyne.

    “Cole and Boyne played a game of make-believe with a publicly-traded microcap company,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office. “We will continue to fight microcap fraud and bring charges against not only the company executives but also the auditors or other gatekeepers who legitimize a fraud and allow investors to be victimized.”

    The SEC alleges that as EGMI’s engagement partner, Quintanilla and the public accounting firm Mendoza Berger & Co. LLP issued clean audit opinions for EGMI’s year-end financial statements for 2006, 2007, and 2008, even though those statements were riddled with material misstatements and omissions.

    Donovan violated the antifraud provisions of the securities laws when he led several public conference calls with securities analysts and investors in 2009, and knowingly or reckles

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    • Donovan violated the antifraud provisions of the securities laws when he led several public conference calls with securities analysts and investors in 2009, and knowingly or recklessly relayed false financial information about the company that had been provided to him by Cole and Boyne.

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      So ........... maybe EGMI wasn't really a going concern after all ? Who'da thunk it ???

      • 1 Reply to seattle49
      • Difference between Fraud and Incompetence is a fine line.
        Of course, parking sales or consignments reported as sales is
        illegal which may have or may not have happened here a few times in
        the past. None of it matters now anyway cuz as a going concern
        the business model of selling stock and supplying the market with
        never panning out agreements and partners is broken. Point of
        diminishing returns was hit a few years ago.

 
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