CannaCloud, Inc. and D.A. Spargo & Co. LLC under investigation by SEC

An Arizona man and his affiliated companies have recently been charged by the Securities and Exchange Commission (SEC) for allegedly deceiving investors in a fraudulent scheme related to a cannabis app investment. The SEC filed a complaint against Jeffrey K. Corbin, who is accused of misleading investors about the profitability and business activities of his companies, New Leaf Data Services LLC and its parent, Watermark Research, LLC.

According to the SEC, Corbin and his companies raised approximately $3.3 million from over 400 investors in multiple states by offering securities through a series of false and misleading statements. The complaint alleges that Corbin falsely claimed that their cannabis app was highly profitable and that the app had been approved by Apple to be sold on its App Store. In reality, the app was not generating significant revenue, and it was never approved by Apple for distribution.

Furthermore, the SEC accuses Corbin of misusing investor funds by paying himself substantial salary and using investor money for personal expenses unrelated to the business. The SEC also alleges that Corbin fabricated financial statements to mislead investors about the companies’ financial health and potential for future growth.

In response to the charges, Corbin and his companies have neither admitted nor denied the allegations but have agreed to settle with the SEC. Under the settlement, Corbin will be prohibited from serving as an officer or director of any publicly traded company and will be required to pay back ill-gotten gains as well as civil penalties.

The SEC’s enforcement action against Corbin and his companies underscores the importance of conducting thorough due diligence before investing in any opportunity, especially in emerging and high-risk sectors such as the cannabis industry. Investors should be cautious of promises of high returns and conduct independent research to verify the legitimacy of investment opportunities.

Corbin’s case serves as a cautionary tale for investors about the risks of fraudulent schemes and the importance of vigilance in protecting one’s investments. By remaining informed and skeptical of unrealistic claims, investors can help safeguard themselves against falling victim to fraudulent schemes and potential financial losses.

Ultimately, the SEC’s charges against Corbin highlight the agency’s commitment to holding individuals and companies accountable for engaging in fraudulent activities that harm investors and undermine the integrity of the securities markets. Through enforcement actions like these, the SEC aims to protect investors and maintain trust and confidence in the financial markets.