Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Compliance newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (August 10, 2020, 10:18 PM EDT ) A Florida federal judge on Monday approved a consent judgment against a CEO accused by the U.S. Securities and Exchange Commission of inflating his company's share prices through misleading claims about fever-detecting thermal scanners, with the executive agreeing to a permanent ban from running issuers of securities and an undetermined civil fine.
As part of the consent judgment in the SEC's suit against digital marketing company Turbo Global Partners and CEO Robert W. Singerman, which accused them of exploiting the COVID-19 pandemic with false claims, the CEO did not admit or deny the allegations. The company reached a separate agreement in which it vowed among other things not to employ any device, scheme or artifice to defraud, which U.S. District Judge James M. Moody Jr. also approved Monday.
The consent judgment states that Singerman may not challenge the validity of the final judgment, and that he "will not make or permit to be made an public statement to the effect that defendant does not admit the allegations of the complaint, or that this consent contains no admission of the allegations without also stating that defendant does not deny the allegations."
The SEC's May suit against Turbo Global Partners Inc. and Singerman claims that Turbo touted a "public-private partnership" with government entities in which it would be the exclusive distributor of thermal scanning equipment designed to detect fevers, one of the early warning signs of coronavirus infection. But no such agreement existed with either the government or the product's manufacturer, according to the complaint.
Turbo Global, whose main business consists of advertising revenue from video monitors placed in pharmacies, told the public that it had formed a "strategic alliance" with a tech company called BeMotion, the regulator said. As the novel coronavirus pandemic swept the country, Turbo Global and Singerman were in talks with the company to be the exclusive U.S. distributor for thermal scanning equipment BeMotion had developed in China, but no agreement was ever finalized, according to the suit.
In a March press release, Turbo Global falsely said that it was the authorized U.S. selling agent for the fever scanning equipment, and that the product was the "only scanning technology on the planet with noncontact intelligent human temperature screening and facial recognition," the regulator alleged.
While the thermal scanning product had facial identification technology — meaning it could tell a human face apart from an inanimate object — it did not contain facial recognition technology, or the ability to differentiate between two human faces, and is not the only system to contain facial identification technology, the SEC said in the complaint.
A second press release in April touted Singerman's communication with the governors of all 50 states about the new equipment, as well as major retailers like Target and Walmart. But that "confirmed" contact was misleading and consisted only of unsolicited emails and faxes, according to the SEC's complaint.
The regulator said the false statements in the two Turbo Global press releases "materially impacted" the company's share prices in violation of federal securities fraud laws.
Additionally, Singerman is a "recidivist securities violator" who was previously targeted by the SEC in 1999 over the fraudulent sale of securities relating to a boiler room network, the agency said.
The consent judgment bans Singerman from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Securities and Exchange Act or that is required to file reports pursuant to Section 15(d) of the act.
Singerman and Turbo Global could not be reached for comment. The SEC did not immediately respond to a request for comment.
The SEC is represented in-house by Robert F. Schroeder, William P. Hicks and Madison Graham Loomis.
Singerman and Turbo Global are represented pro se.
The case is SEC v. Turbo Global Partners Inc. et al., case number 8:20-cv-01120, in the U.S. District Court for the Middle District of Florida.
--Additional reporting by Reenat Sinay. Editing by Breda Lund.
For a reprint of this article, please contact reprints@law360.com.
