Securities and exchange fee today charged the CEO of a sexual wellbeing products retailer and a paid promoter with orchestrating fraudulent promotional campaigns to tout the manufacturer’s inventory.
The SEC alleges that Scott S. Fraser, who also was a predominant shareholder in Las Vegas-based Empowered Products Inc., separately ran a e-newsletter publishing industry and employed Nathan Yeung to secretly and fraudulent help him promote Empowered merchandise via on-line publication articles purportedly authored by using independent writers. But Fraser and Yeung actually authored, approved, and distributed the rosy articles about Empowered merchandise themselves, working under such pseudonyms as “Charlie Buck” and then hiring different promoters to disseminate the promotions to their respective subscriber lists in trade for fees. Meanwhile the promotions failed to disclose that Empowered merchandise and Fraser authorized and paid for the commercials.
“In order to make this promotional campaign more effective, Fraser and Contrarian Press worded the promotional articles to create the false appearance of objectivity in reporting on (Empowered Products) prospects,” the complaint said.
The SEC’s complaint bills Fraser, his e-newsletter organization Contrarian Press, and Yeung with violations of section 10(b) of the Securities alternate Act of 1934 and Rule 10b-5 as well as section 17(b) of the Securities Act of 1933. The complain further charges Fraser with assisting and abetting violations by means of Contrarian Press, and seeks to hold him responsible as a manage person of the organization. The complaint also chargs Yeung with aiding and abetting Fraser with the crimes.
