Investors Sue Parallel for Alleged Securities Fraud Scheme

Investors Sue Parallel for Alleged Securities Fraud Scheme
Cannabtimes

<![CDATA[A trio of investors in Georgia-based multistate cannabis operator Parallel are not pleased with how their investment dollars were spent. In a complaint filed March 8 in Florida federal court, TradeInvest Asset Management Company (BVI) Ltd., First Ocean Enterprises SA and Techview Investments Ltd. take aim at the company, formerly known as Surterra Wellness, and its former CEO, William “Beau” Wrigley Jr., heir of the Wrigley chewing gum fortune.The trio of investors have leveraged allegations of securities fraud, claiming that Wrigley convinced them to invest in a simple agreement for future equity (SAFE) issued by Parallel during a go-public combination with a special purpose acquisition company (SPAC) affiliated with music industry mogul Scott “Scooter” Braun, which ultimately failed.“Wrigley, the Chairman of the Company and its CEO during the relevant period, along with the other Securities Defendants, fraudulently induced the SAFE Plaintiffs, by means of myriad misrepresentations and omissions about the Company’s true financial condition, to invest in a so-called ‘SAFE’—a Simple Agreement for Future Equity—issued by the Company,” the plaintiffs allege in the complaint. “Wrigley and the Securities Defendants initially portrayed the SAFE as a way to maintain planned investments in operating and capital expenditures pending consummation of an announced public merger through a SPAC. … Thereafter, once the merger talks terminated, the Securities Defendants sold the SAFE as a way to ‘bridge’ the Company’s operating and capital expenditures through the second quarter of 2022, by which time an alternative sale could be consummated.”The complaint describes a SAFE as a relatively new type of security that converts investors’ cash investments to equity in the issuing company under specified conditions.TradeInvest and First Ocean invested in the SAFE on Sept. 27, 2021, after Parallel allegedly provided false details about the company’s financial condition and convinced the investors that they had to supply…

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Source : Investors Sue Parallel for Alleged Securities Fraud Scheme

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