SEC Obtains Asset Freeze and Temporary Restraining Order Against Michael Borish and Michael Ciarlone

SEC v. Freedom Environmental Services, Inc., et al., Case No.: 6:12-CV-1415-ORL-28-DAB (M.D. Fl.).  On September 17, 2012, the SEC announced it had obtained a temporary restraining order, asset freeze and appointment of a receiver to preserve assets.  The SEC charged Michael Borish, Michael Ciarlone and Freedom Environmental Services, Inc. with fraud and misappropriation of assets.  Borish, Freedom’s former CEO, remained in control of the company after being fired by the board of directors.  Even though he had been terminated, Borish acted as the company’s CEO.  Both before and after his removal, he caused Freedom to file false reports with the Commission.  Freedom also issued a false press release regarding the acquisition of another company and failed to file Forms 8-K regarding significant events, such as the Company’s bankruptcy filing and litigation settlements.  Borish and Ciarlone also stole corporate funds to pay for personal expenses.  The SEC charged Freedom, Borish and Ciarlone with violating Section 17(a) of the Securities Act, Sections 10(b), 13(b)(2)(A) and (B), Section 13(b)(5) and 14(c) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-11, 13a-13, 13a-14, 13b-1 and 14c-6 thereunder.  Separately, the Commission issued an order suspending trading in the securities of Freedom from September 17, 2012 through September 28, 2012.

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