Securities and Exchange Commission v. Edward M. Laborio, Jonathan Fraiman, Matthew K. Lazar, Envit Capital, LLC, Envit Capital Group, Inc., Envit Capital Holdings, Inc., Envit Capital Private Wealth Management, LLC, Envit Capital Multi Strategy Mixed Investment Fund I LP, Aetius Group PLC, and Aetius Group LLC, 1:12-cv-11489-MBB (D. Mass.). On August 10, 2012, the SEC announced charges against Edward M. Laborio and others for their role in a boiler room scheme that raised about $5.7 million. Laborio hired Jonathan Fraiman as a marketing executive at Envit Fund and Envit LLC, as well as the Director and Chief Compliance Officer of Envit Wealth. Laborio, Fraiman, and the Envit Companies made fraudulent statements about the Envit Companies’ businesses, revenues, financial projections, uses of investor funds, and historical returns generated by a hedge fund that in reality never did any business. Laborio recruited Matthew Lazar to open a new office for Envit Wealth and the investment advisory subsidiary. Lazar raised $585,000 in an unregistered offering through the sale of a PIPE (private investment in a public equity) in Envit Group. Lazar claimed that the PIPE guaranteed an annual 8.5% dividend and that it was safe. Laborio commingled the proceeds from the offerings, used investor money to cover gambling losses, and to pay himself.
The Defendants are charged with violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Laborio, Fraiman, Lazar and Envit Wealth are charged with violating Sections 206(1), 206(2) and 206(4) of the Advisers Act and Rule 206(4)-8 thereunder. Laborio, Fraiman, and Lazar are charged with violating Section 15(a)(1) of the Exchange Act. Laborio, Envit LLC, Envit Group, Envit Holdings, and Aetius PLC are charged with violating Sections 5(a) and 5(c) of the Securities Act. Laborio is charged with violating Section 16(a) of the Exchange Act and Rule 16a-3 thereunder. Lastly, Envit Fund and Aetius LLC are charged with violating Section 7(a) of the Investment Company Act. The SEC seeks permanent injunctions, disgorgement plus prejudgment interest, civil penalties, penny stock bars against Laborio, Fraiman, and Lazar, and an officer and director bar against Laborio.