Commission Files Another Offering Fraud Action

Offering fraud actions are a long-time staple of SEC Enforcement. The agency has uncovered and initiated a wide variety of cases in this area ranging from sham entities selling worthless shares to more sophisticated actions centered on schemes such as selling non-existent tickets to Broadway plays. The most recent case in this area is based on a fugitive selling shares of a company that has no actual business, SEC v. Guess, Civil Action No. 8:24-cv-00172 (D. Neb. Filed May 9, 2024).

Defendants in the action are Jerry D. Guess and Guess & Co. Corporation, Inc. Defendant Guess is the founder and president of Guess & Co. He has a checkered history that includes a conviction on a misdemeanor check fraud action and being named as a defendant in an action based on a claimed real estate fraud where he failed to appear for a court hearing and subsequently fled to Canada in the wake of a criminal contempt order that was entered against him. He also pleaded guilty to charges of wire fraud and filing false tax returns in 2011. In that case Mr. Guess was sentenced to prison and was released in 2017. Defendant Guess controls Guess & Co.

For nearly one year, beginning in June 2021, Mr. Guess conducted an offering of Guess shares to the public. Potential investors were told that the firm was a diversified energy, health care, technology and real estate firm. The company was reputed to have earned millions of dollars in revenue from its operations in recent years. A business plan was distributed that supposedly was designed to revitalize rural America. Yet the only revenue earned by the company recently is $14,654 from the sale of 19 computers to an electronic re-seller store. The plan was based on false statements. The complaint alleges violations of Securities Act Sections 17(a)(1) and 17(a)(3). The case is in litigation. See Lit. Rel. 26005 (May 14, 2024).