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SEC suspends cannabis stock trading for FusionPharm citing fraud

After suspending trading in the fifth microcap claiming to operate in the marijuana industry within the past two months, the Securities and Exchange Commission on Friday issued an investor alert. Warning about possible pot-related investment scams, the SEC noted in a press release that fraudsters “often exploit the latest growth industry to lure investors with the promise of high returns.”

This morning, the SEC suspended trading in Denver-based FusionPharm, which claims that it makes a cultivation system for use by pot growers. The SEC did so “because of questions that have been raised about the accuracy of assertions by FusionPharm” concerning the company’s assets, revenues, financial statements, business transactions and financial condition. (The SEC is requiring that the firm not return phone calls, according to a message on FusionPharm’s voicemail.)

Other marijuana-related companies in which the SEC recently suspended trading are Irvine, Calif.-based Cannabusiness Group, Woodland Hills, Calif.-based GrowLife, Colorado Springs-based Advanced Cannabis Solutions and Bedford, Texas-based Petrotech Oil and Gas. Under the federal securities laws, the SEC can suspend trading in a stock for 10 days and bar a broker-dealer from soliciting investors to buy or sell the stock until certain reporting requirements are met. (Phone messages left at Cannabusiness Group, Advanced Cannabis Solutions and Petrotech Oil and Gas, which has a marijuana and hemp division, were not returned. In its 10-Q issued May 15, GrowLife acknowledged its temporary suspension of trading, which has since expired, and stated that it had not been notified by the SEC that the commission is conducting a formal investigation of the firm.)

Read more: http://ww2.cfo.com/fraud/2014/05/sec-suspends-fifth-pot-industry-microcap/

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Stephen Carter

Stephen Carter is a journalist and information technology specialist living in Waco, Texas. He has been working with the cannabis movement since 2009. He founded Texas Cannabis Report in 2013 to bring Texans accurate cannabis related news.

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