SEC Charges Hawaii-Based Submarine Tour Operator and Its Principals with Offering Fraud and Misappropriation of Investor Funds
Securities and Exchange Commission v. Semisub, Inc., Curtiss Edward Jackson, and Jamey Denise Jackson, No. 1:22-cv-00349 (D. Haw. filed August 3, 2022)
SEC Litigation Release No. 25462 / August 3, 2022
The Securities and Exchange Commission today filed charges against Semisub, Inc., Curtiss Edward Jackson, and Jamey Denise Jackson for allegedly conducting an offering fraud and misappropriating investor funds for their personal use.
The SEC's complaint alleges that since 2017, defendants have raised approximately $4.7 million from over one hundred individuals across the United States through the fraudulent offer and sale of securities in Semisub, a company formed by the Jacksons purportedly for the construction and operation of a partially submersible vessel that would be used for commercial sightseeing tours in Hawaii. The complaint alleges that despite telling investors through offering documents and other communications that their funds would be used to construct the initial vessel and then construct and market additional vessels to potential buyers, defendants misappropriated a significant portion of the funds raised to pay for their personal expenses, including, among other things, private homes, vacations, groceries, psychics, and recreational drugs. According to the complaint, to perpetuate the fraud and solicit additional funds to support their personal spending, defendants repeatedly lied to investors about the status of construction of the vessel and potential business relationships with reputable entities and organizations.
The SEC's complaint, filed in federal district court in Honolulu, Hawaii, charges all three defendants with violating the anti-fraud provisions of Sections 17(a)(1) and (3) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder. The complaint also charges Semisub and Curtiss Jackson with violating the anti-fraud provisions of Section 17(a)(2) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against all defendants.
The SEC's investigation was conducted by Christian J. Ascunce, Andrea Fox, Jennie B. Krasner, and Devon Staren, and supervised by Stacy L. Bogert. The litigation will be led by Patrick R. Costello and Mr. Ascunce, and supervised by Frederick L. Block.
PDF: SEC Complaint
HNN: SEC sues Semisub’s founders for fraud, alleging they used investor funds for psychics and drugs
SA: SEC sues Semisub tour boat, alleging investor fraud