Positronic Farms – Complaint Filed by State of Massachusetts | Goodman & Nekvasil P.A. May Recover Investor Losses
According to Allegations Filed by the State of Massachusetts
On January 23, 2017, David A. Caputo (“Caputo”) founded Positronic Farms, Inc., located in Holyoke, Massachusetts. Positronic Farms intended to engage in the cultivation of recreational cannabis and purports to lease part of its commercial facility to other cannabis businesses. Positronic Farms is in the process of applying and obtaining a license to operate a cultivation facility but currently cannot sell cannabis legally.
From its inception, Positronic Farms conducted unlawful securities offerings that were required to be registered in Massachusetts and engaged in conduct in violation of the strict anti-fraud provisions of the Act. Between January 23, 2017 and August 10, 2018, Positronic Farms raised $1.3 million through the offer and sale of unregistered securities to investors. Caputo and Positronic Farms offered and sold securities to approximately 40 investors through private placement offerings. These investors reside throughout the United States, including Massachusetts, Illinois, New Jersey, New York, Michigan, Tennessee, Utah, Vermont, and Virginia. Caputo and Positronic Farms accepted funds from just about any investor willing to contribute monies and failed to verify whether investors had the financial means or knowledge to invest in the cannabis industry. Specifically, many Positronic Farms investors are unaccredited and have limited investment experience. Caputo and Positronic Farms completely failed to take any reasonable steps to determine whether the investors were accredited.
Caputo and Positronic Farms solicited and advertised their unregistered securities to the general public through a variety of media, including newspaper advertisements, online press releases, e-mail messages, and online video presentations. One such solicitation method included Caputo and Positronic Farms issuing a press release published on an online news portal available to the general public, which contained direct access to Positronic Farms’ prospectus, private placement memoranda, projected finances, and other offering documents. Another method included Caputo himself e-mailing copies of offering documents to over 200 prospective investors, whom he met at conferences. Another included Caputo and Positronic Farms creating and distributing an online video presentation where Caputo describes Positronic Farms’ business and the cannabis cultivation process. Since April 1, 2019, the video presentation has been viewed more than 535 times. For those prospective investors whom Caputo and Positronic Farms did not capture through its general solicitation efforts, Caputo and Positronic Farms hired individuals to assist in the direct solicitation and sale of shares of Positronic Farms. On at least four occasions, Positronic Farms paid individuals sales commissions for soliciting prospective investors to purchase shares in the company. In total, Caputo and Positronic Farms have solicited over 735 prospective investors.
In addition to offering unregistered securities, Positronic Farms ignored the representations contained in its own offering documents. The Positronic Farms offering documents represented that the company would not utilize funds obtained from investors prior to the company raising a minimum amount of $250,000. Instead, Caputo and Positronic Farms freely used these funds prior to reaching the minimum fund requirement. Moreover, Positronic Farms informed investors that funds received from investors would be deposited in an escrow account; however, Caputo and Positronic Farms co-mingled these funds with the company’s business operation expenses. Positronic Farms also failed to inform investors that their funds would be transferred to a separate business entity to be used as initial working capital for that entity’s operations.
Investors in Positronic Farms, Inc. May Recover their Losses with Goodman & Nekvasil, P.A.
If you invested in Positronic Farms, Inc., Goodman & Nekvasil, P.A. may help you. Goodman & Nekvasil, P.A., a Clearwater, Florida, law firm with a national practice representing victimized investors, has recovered more than $180 million dollars on behalf of victimized investors.
All our cases are handled on a purely contingency fee basis by Kalju Nekvasil, Esq., formerly regional counsel with the NASD, now known as FINRA. Kalju Nekvasil, Esq. has practiced in this area of the law for more than 35 years.
There is no charge for an evaluation of your case. Further, we handle our cases on a contingency fee basis. This means that unless we recover money for you, we charge no attorney’s fee. Unless you recover any money, you pay us nothing, not even the costs and expenses which the firm will advance on your behalf.
If you incurred investment losses in Positronic Farms, Inc. and would like your case evaluated by a securities attorney (again, there is no charge for an evaluation and all cases are handled on a purely contingency fee basis), please contact us.
Investment Fraud Attorney, Stockbroker Misconduct Disciplinary Actions, Unsuitable Investment Advice, Investment Fraud, Churning, Misrepresentation and Omission of Material Facts, Elder Fraud, Unauthorized Trading, Theft, Selling Away, Unapproved Outside Business, Nationwide, PIABA, SEC, Securities Exchange Commission, NASD, National Association of Securities Dealers, NASDAQ, Dow Jones, Wall Street, New York Stock Exchange