The allegations read: The securities and exchange commission (the "commission"), for its complaint against preipo corp. ("preipo"), john a. Mattera ("mattera"), and david p. Grzan ("grzan") (collectively, "defendants") alleges that defendants have raised at least $4.2 million from at least 50 investors residing in various states, including several in florida, through an unregistered fraudulent securities offering. The securities are in the form of common stock in preipo. Preipo claims to have developed an online platform offering access to shares in private companies before their initial public offerings. The purported purpose of the offering is to fund the development of this platform and the company's business operations. Preipo, mattera, and grzan have made material misrepresentations and omissions to investors and are engaging in a scheme to defraud and a course of conduct designed to deceive investors. Specifically, defendants have made misstatements regarding prelpo's management and have omitted to disclose that mattera, previously convicted for securities fraud and permanently enjoined from committing securities fraud-charges which included using investor money to sustain a lavish lifestyle, is acting as the de facto chief executive officer ("ceo") of the company. Defendants have also made misstatements regarding the use of investor funds. Specifically, investors have not been told that only a small portion of the offering proceeds was used to fund the development of preipo's online platform and that the company has generated no revenues from any of its business ventures. Instead, preipo has made undisclosed payments totaling at least $1.7 million-approximately 42% of the investors' money- to mattera, grzan, and three other officers of the company out of the $4.2 million of investor funds. And once again, mattera is pilfering investor money for his own personal use. As a result of his conduct, grzan violated and, unless restrained and enjoined, is reasonably likely to continue to violate sections 17(a)(1), 17(a)(2) and 17(a)(3) of the securities act; violated and, unless enjoined, is reasonably likely to continue to violate section 10(b) of the exchange act, exchange act rules 10b-5(a), 10b-5(b) and 10b-5(c), and sections 5(a) and 5(c) of the securities act.
