(HedgeCo.Net) The Securities and Exchange Commission has charged Donald G. Blakstad and two entities he controlled with engaging in the fraudulent offer and sale of over $3.5 million of securities.
The SEC’s complaint alleges that, between July 2015 and May 2019, Blakstad induced investors to purchase the securities of companies he controlled, including both Energy Sources International Corporation and Xact Holdings Corporation, by making materially false and misleading statements and omissions about the use of investor proceeds and business operations. According to the SEC’s complaint, instead of using investor funds as promised, Blakstad misappropriated at least $2.2 million of investor funds. Blakstad allegedly spent the investor funds on personal entertainment, the purchase of a stake in a night club, and a luxury automobile. In July 2019, the Commission charged Blakstad for his role in a separate insider trading scheme.
In a parallel action, the United States Attorney’s Office for the Southern District of New York announced criminal charges against Blakstad.
The SEC’s complaint, filed in federal court in New York, charges Blakstad, Energy Sources and Xact Holdings with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, a civil penalty, and an officer and director bar against Blakstad.