[Editor Charlie sez: What do the Panama Papers and Pledge Music have in common? More than you might think….]
It seems to be a distraction, unintentional, but still a distraction from the fact Pledge Music’s purportedmajority shareholder Joshua Sason, is the guy named first in the SEC complaint below.
Now this complaint doesn’t directly have anything to do with Pledge Music, but it is certainly part of the story. The majority shareholder of a company running out of money gets an SEC complaint for what appears to be a fraud perpetrated by his other company? C’mon! Anyone associated with Pledge pretending like it’s not part of the story? Well, that makes it part of the story.
If you read the complaint it alleges pretty crazy stuff. From the SEC press release that goes with the complaint:
“According to the SEC’s complaint, from approximately December 2012 to June 2013, microcap stock financier Magna Group, which was founded and owned by Joshua Sason, engaged in a scheme to acquire fake convertible promissory notes supposedly issued by penny stock issuer Lustros Inc. and then to convert those notes into shares of Lustros common stock. The defendants then sold the shares to unsuspecting retail investors, who did not know that the shares were fraudulently acquired and were being sold illegally. The defendants’ sales of the Lustros shares also had the effect of destroying the value of the Lustros shares held by the public.”
So this guy didn’t get charged because he forgot to file a form, or checked the wrong box. According to the SEC he is charged with violations usually associated with con men. And according to the SEC he didn’t do it just once:
“The complaint also alleges that in November 2013, Magna Equities II, which was also wholly-owned by Sason, and Manuel, purchased another fake promissory note from Pallas Holdings. Magna Equities II and the note’s issuer, NewLead Holdings, Ltd., later agreed to retire the fake debt in exchange for shares of the issuer through a court-approved settlement agreement. To obtain approval of the settlement, Sason and Magna Equities II falsely swore to the court that the fake promissory note was a bona fide debt of NewLead. Kautilya “Tony” Sharma and Perian Salviola, who controlled Pallas Holdings, are alleged to also have participated in the scheme.”
It was shortly after this Sason reportedly invested 3 million in Pledge Music.