Las Vegas Sun

March 29, 2024

SEC accuses Henderson men of defrauding investors

The Securities and Exchange Commission sued four Henderson residents Tuesday, claiming they defrauded investors of $6.88 million by manipulating the stock of a company.

The federal agency filed suit in U.S. District Court for Nevada against Marcus Luna, described as leader of the alleged scheme. The SEC said he is an attorney, manager of St. Paul Venture Fund LLC and Taurus Capital Corp. and owner of the law firm Luna & Vining APC.

Also sued were Henderson residents Nathan Montgomery, president of Minnesota Venture Capital Inc.; Adam Daskivich, president of Real Estate of Minnesota Inc.; David Murtha, president of Matrix Venture Capital Inc.; and several corporate entities.

The defendants have not yet responded to the allegations, and efforts to locate Luna for comment were unsuccessful.

“Luna orchestrated a scheme in which he and the other defendants violated the registration provisions of the federal securities laws. In doing so, he and the other defendants received ill-gotten gains totaling approximately $6.88 million from November 2006 to December 2007. In furtherance of his scheme, Luna violated the antifraud provisions of the federal securities laws,” the SEC charged in its lawsuit.

The SEC said the alleged scheme involved Luna coordinating a “reverse merger” between privately-held Axis Technologies Inc. and a company whose shares were publicly traded on the penny stock market. He then arranged for a reverse stock split, the SEC said.

In engaging in these transactions, Luna made false and misleading statements to officers of Axis Technologies, the SEC said.

The SEC alleged in its complaint that Luna had previously recruited Montgomery, Daskivich and Murtha to work with him.

“In a matter of just five days, Luna incorporated several corporate entities in the state of Minnesota. Luna set himself up as the principal of defendant St. Paul Venture Fund. He set up Montgomery, Daskivich, and Murtha as the principals of defendants Minnesota Venture Capital Inc., Real Estate of Minnesota Inc. and Matrix Venture Capital Inc., respectively,” the SEC said. “None of the defendant entities conducted any legitimate business operations. Luna created them simply to serve as straw men.”

The alleged scheme involved a false legal opinion letter to a transfer agent claiming that the shares of common stock issued by the newly-formed public company, Axis Technologies Group Inc., were not restricted and were freely tradable, the suit said. The SEC said Luna claimed the St. Paul Venture Fund, Minnesota Venture Capital, Real Estate of Minnesota and Matrix Venture Capital were accredited investors under Minnesota and federal law.

“This was false. Luna knew that the defendant entities did not meet the definition of accredited investors. Amongst other reasons, Luna had created the defendant entities to act as conduits to allow him and his cohorts, defendants Montgomery, Daskivich, and Murtha, to sell their stock into the public market at artificially-supported prices,” the SEC charged.

The agency said the price was inflated as certain “stock promoters were issuing press releases, faxes and emails regarding Axis Group and the company’s sales and sales prospects.”

“The trading volume and price of Axis Group stock increased accordingly and provided a market into which the defendants could and did sell their Axis Group stock,” the lawsuit charged.

Luna, Montgomery, Daskivich and Murtha, through the defendant companies, gained approximately $1.6 million, $1.4 million, $2.4 million and $1.3 million, respectively, from their unregistered stock sales, the suit said. From their profits, Montgomery, Daskivich, and Murtha paid Luna approximately $1.7 million in kickbacks, the suit said.

The SEC, among other things, seeks a court order requiring the defendants to “disgorge all ill-gotten gains.”

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