SEC charges Diamond Desk for fraudulent securities offering
The Securities and Exchange Commission (SEC) has charged Coral Springs, Florida company, The Diamond Desk Corporation and its sole owner and principal, Adam J. Lowe, alleging that they raised approximately $2.2 million from at least nine investors through a fraudulent investment scheme involving natural fancy color diamonds.
The SEC’s complaint alleges that, from at least February 2018 to February 2019, Lowe, on behalf of Diamond Desk, offered and sold securities in the form of investment contracts in Diamond Desk, and falsely told investors that Diamond Desk would use investor money to acquire parcels of natural fancy color diamonds to be resold at a profit and resulting in investment returns of up to 27% plus the full return of investors’ principal within 3 to 12 months.
As alleged, Lowe did not use investor funds solely to purchase natural fancy color diamonds for resale as promised and, instead, misappropriated at least $924,000 of investor funds for his personal expenses and benefit, including to fund his gambling at casinos.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of Florida, charges Diamond Desk and Lowe 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, and charges Lowe with control person liability under Section 20(a) of the Exchange Act.
The Commission seeks permanent injunctive relief, disgorgement of allegedly ill-gotten gains plus prejudgment interest, civil penalties, and a conduct-based injunction and an officer-and-director bar against Lowe.