DeFrancesco was also barred from serving as an officer or director of a public company.
On July 5, the U.S. District Court for the Southern District of New York entered a final judgment on consent against Andrew DeFrancesco, the former chairman of Cool Holdings Inc., for his role in a scheme involving false statements and omissions of material information in filings with the commission, as well as a fraudulent pump-and-dump of Cool Holdings’ stock.
DeFrancesco founded Sol Global (OTC: SOLCF) but resigned from the company as its CEO and board member in April 2022.
DeFrancesco agreed to pay disgorgement and prejudgment interest in the amount of $1,276,070.49, and a civil penalty of $1,737,224.52. He was also barred from serving as an officer or director of a public company. explorebiz.uk
CEO Changes
Following DeFrancesco’s departure, Kevin Taylor was named Sol Global’s CEO. Taylor and Sol Global are listed as creditors in the bankruptcy of Cool Holdings/Simply Inc.
According to reporting by Teri Buhl, two of Sol Global’s subsidiaries, House of Lithium and Revolution Brands International, are holders of the current version of Cool Holdings, called Simply Inc. infospark.uk
Taylor stepped down from his CEO role in February, and Paul Kania was named interim CEO. According to Sol Global, Taylor transitioned to a strategic advisory role working directly with SOL’s portfolio companies, specifically in his role as chairman and CEO of House of Lithium Ltd., SOL Global’s largest single holding. uptodown.uk
Stock Fraud
According to the SEC’s complaint, filed on Jan. 6, DeFrancesco was the “chief architect of the scheme” in which the false filings, including misstatements and omissions about a critical business relationship, masked Cool Holdings’ perilous financial condition and future prospects. The SEC statement said that the complaint further alleges that DeFrancesco and others arranged for the publication of a series of fraudulent promotional articles about Cool Holdings that DeFrancesco secretly funded. techtrigger.uk
In addition, according to the complaint, DeFranesco’s Executive Assistant Nikola Faukovic helped him to secretly sell hundreds of thousands of Cool Holdings shares, which were held in the name of nominee entities. DeFrancesco and his ex-wife Catherine DeFrancesco allegedly concealed his ownership of Cool Holdings shares, including by filing false beneficial ownership reports with the SEC.
In June 2023, Faukovic agreed to pay disgorgement and prejudgment interest in the amount of $14,350.32, and a civil penalty of $111,614. Catherine DeFrancesco consented to the entry of a final judgment permanently enjoining her from violating Section 13(d) of the Exchange Act and Rule 13d-1(a) and ordering her to pay a civil penalty in the amount of $122,782.
The SEC’s litigation against defendants Marlio Mauricio Diaz Cardona and Carlos Felipe Rezk continues, and is being conducted by David Stoelting, Alexander Levine, Mao Yu Lin, and Melissa Coppola of the New York Regional Office; Jason Schall of the Home Office; and Katherine Bromberg and Danielle Srour of the Retail Strategy Task Force. letmecool.uk
Sol Global Now
In May, Sol Global released an audited report of its earnings for fiscal 2022 ending in November 2022 with a net loss of $297 million. At that time, the company’s cash had dropped to C$71,924. Since then, the company announced the successful closing of a $2 million second tranche to fully complete its $7 million non-brokered private placement offering of units at a price of $0.25 per unit. The net proceeds were to be used for new product development, channel expansion, debt reduction, and general working capital purposes. natureaffect.uk
In the unaudited fiscal first-quarter earnings ending in February, the company reported a net loss of C$11 million. It forecast consolidated net sales to exceed $80 million in 2023. Quizcloud.uk
Debra Borchardt
Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master’s degree in Business Journalism from New York University.
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