Markets Wired

On September 23, 2019, the Securities and Exchange Commission filed charges against the former CEO and president of Social Voucher.com, Inc., a now defunct Florida-based company that claimed to be a “mobile coupon solutions provider” and direct competitor of Groupon and LivingSocial, for defrauding investors through an unregistered offering of securities that raised approximately $20.5 million from about 400 retail investors nationwide.

The SEC’s complaint, filed in the U.S. District Court for the Southern District of Florida, alleges that between June 2013 and June 2018, Social Voucher’s former CEO Gerald C. Parker engaged in an egregious scheme to defraud investors and enrich himself. Among other things, the complaint alleges that Social Voucher, through Parker, made false and misleading statements to investors and prospective investors regarding the use of funds to develop and launch Social Voucher’s purported mobile coupon application. Instead of using the funds for legitimate business expenses, Parker allegedly misappropriated at least $4.6 million of investor funds, including using more than $2 million to pay his personal gambling expenses. In addition, he misused investor money by paying undisclosed, exorbitant commissions totaling at least $9.6 million, or about 46% of the offering proceeds, to the network of sales agents he enlisted to solicit potential investors. Finally, as alleged, Parker unlawfully acted as an unregistered broker when he hired the sales agents and paid them commissions for selling the investment.

The SEC’s complaint alleges that Parker violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, and the securities registration provisions of Securities Act Sections 5(a) and 5(c) and the broker dealer registration provision of Section 15(a)(1) of the Exchange Act. The SEC seeks a permanent injunction, disgorgement of ill-gotten gains and a civil penalty against Parker.

The SEC’s investigation was conducted by Brian Theophilus James and Timothy J. Galdencio in the Miami Regional Office, and supervised by Chedly C. Dumornay and Glenn S. Gordon. The litigation against Parker will be led by Wilfredo Fernandez. The SEC appreciates the assistance of the United States Attorney’s Office for the Southern District of Florida, the Federal Bureau of Investigation, and the Florida Office of Financial Regulation, Bureau of Financial Investigations.