by Shawn Cumberbatch
Barbados has become a focal point of an American government investigation into the business dealings of a British investor living here.
The alleged failure by Jonathan Bryant to follow through on promised multi-million business ventures here and public statements about the same are part of an unlawful securities scheme, the United States Securities and Exchange Commission has claimed.
Bryant, who has lived in Barbados for the past three years, and in that time has become known for his involvement in sponsorship of athletics, football, cricket and other sports, is facing several charges for what the US SEC said was his involvement in “a scheme to inflate the volume of trading” of 8000 Inc., a company he became involved in three years ago.
That company and two of his associates Thomas J. Kelly and Carl N. Duncan are facing similar charges in a complaint now before the US District Court Southern District of New York, and for which both the SEC and Bryant have last week requested Bryant be given until February 1 to respond to. A decision on that request is pending.
“This case involves a scheme to inflate the volume of trading in EIGH’s common stock and the company’s stock price and to profit from that rise. In October 2009, Bryant acquired control of EIGH and appointed Kelly its Chief Executive Officer. He also retained Duncan as the company’s securities counsel.
“Working together over a 12-month period, the defendants increased the company’s stock price as they sold the company’s restricted securities into the market,” the US securities watchdog alleged.
“The Defendants’ scheme had two facets which they executed simultaneously. One facet involved Bryant’s and Kelly’s dissemination of financial reports and press releases falsely reflecting that (8000 Inc.) had millions of dollars in capital and revenues. The other facet involved Duncan supplying OTC Markets Group, Inc. and (8000 Inc.’s) transfer agent with false legal opinions.
“The opinions that Duncan provided OTC Markets assured that EIGH’s common stock was quoted in a central market widely available to investors. The opinions that he provided the transfer agent enabled Bryant to acquire stock certificates without restrictive legends for EIGH’s restricted securities, thereby allowing Bryant to sell 56.8 million (8000 Inc.) shares into the market that he could not have otherwise sold,” it added.
Saying it was acting pursuant to its enforcement authority under the American Securities Act, the SEC said two of the alleged scheme’s statements that prompted the investigation and current court complaint related of Barbados.
“In the February 23, 2010 and March 2, 2010 (8000 Inc.) press releases that Bryant and Kelly caused (8000 Inc.) to issue, (8000 Inc.) represented that it had purchased six residential properties in the United States valued at $1.5 million and that it had begun building a sportswear store in Barbados using the proceeds from the fictitious capital financing. (8000 Inc) has never acquired any real estate in the United States. The company has also never built or commenced building a sportswear store in Barbados,” the American authority asserted.
“On February 5, 2010, they disseminated a second release stating that a real estate company that (8000 Inc.) had acquired in Barbados, Skyvillas Realty, Inc., had closed contracts for the sale of $10 million worth of property and had pending sales of $5.6 million. However, neither (8000 Inc.) nor Bryant nor Kelly had any bases or support for the forecasts when they were made,” it also stated.
The complaint against Bryant and company alleged that their conduct “involved fraud, deceit, or deliberate or reckless disregard of regulatory requirements, and/or resulted in substantial loss, or significant risk of substantial loss, to other persons”.
“Unless enjoined, the defendants will continue to engage in the securities law violations alleged herein, or in similar conduct that would violate the federal securities laws,” it added.
The SEC is asking the court to find that all of the defendants “committed the violations charged and alleged herein”, in addition to having a “permanent” restraining injection against them and people associated with them.
It also wants several orders, including making those who the charges have been brought against “pay civil penalties”, as well as to bar Bryant and Kelly “from serving as an officer or director of any public company issuer that has a class of securities registered … or that is required to file reports” under the Securities and Exchange acts. email@example.com