VNUE Inc., a music technology company with a focus on monetizing live music experience, filed a complaint in the Eastern District of New York against LG Capital Funding LLC., and its managers alleging the defendants are unregistered securities dealers or criminal usurers.
According to Wednesday’s complaint, LG operates as a securities dealer despite its lack of registration with the Securities Exchange Commission (SEC); “toxic” lenders like LG evade registration so they fall under the radar of regulation.
The complaint describes LG’s business model as follows: LG uses the loan transaction to acquire the company’s stock at a steep discount and then dumps that discounted stock into the public market with the intention of reaping the spread between discount and market price; this forces a plunge in the company’s stock market price.
The SEC has previously sued unlawfully operating unregistered securities dealers for violating the Securities Exchange Act. Additionally, according to the complaint, the SEC has enforcement action against the defendants for the unlawful business model referenced in the complaint.
The plaintiff seeks the following for relief: an order holding the LG managers liable, an order requiring LG to return the property belonging to VNUE, and awards of damages, relief, and costs.
The plaintiff is represented by The Basile Law Firm P.C.