Wednesday, September 27, 2023
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SEC Unravels Complicated Scheme

SALT LAKE CITY (CN) - The president of Standard Transfer & Trust made $700,000 by dumping shares of Mosaic Nutraceuticals Corp. in a tricky scheme in which he created a shell company, created bogus and backdated financial records, engineered a reverse merger with the empty shell, and then walked away rich - for a while, the SEC says in Federal Court.

The SEC says Whitney Lund abused his position as a transfer agent by fraudulently selling restricted shares of Mosaic Nutraceuticals common stock.

According to the complaint, Lund took over a private company and named directors, then issued 150,000 shares to himself and 150,000 shares to the directors. Then he initiated a stock split and created a new company, Mosaic, by orchestrating a reverse-merger between his private company and a public shell. The rest of the scheme involved backdated letters, bogus transfer agent records, and dumping his own shares of stock for $700,000 in ill-gotten gains, according to the complaint

The SEC seeks restitution and penalties and wants Lund permanently barred from participating in stock offerings.

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