The allegations read: Sec admin releases 33-9674, 34-73486; investment company release 40-31325, october 31, 2014: the sec deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to section 8a of the securities act of 1933, sections 15(b), and 21c of the securities exchange act of 1934, and section 9(b) of the investment company act of 1940, against gregory osborn. In anticipation of the institution of these proceedings, osborn has submitted an offer of settlement which the commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the commission, or to which the commission is a party, and without admitting or denying the findings herein, except as to the commission's jurisdiction over him and the subject matter of these proceedings, which are admitted, osborn consents to the entry of this order instituting administrative and cease-and-desist proceedings pursuant to section 8a of the securities act, sections 15(b) and 21c of the exchange act, and section 9(b) of the company act, making findings, and imposing remedial sanctions and a cease-and-desist order, and notice of hearing. On the basis of this order and osborn's offer, the commission finds that osborn made and disseminated false and misleading statements concerning the risks of investing in the short-term notes of a start-up venture purporting to create and sell sales force automation software. Specifically, in an effort to sell the start-up's notes, osborn, in the course of his employment as a managing partner of registered broker-dealer, knowingly or recklessly made and disseminated a number of false and misleading statements concerning the assets purporting to guarantee the notes and the use of the proceeds from the notes offering. Despite osborn's awareness, or reckless disregard, of these false statements, osborn participated in the preparation and distribution of certain offering documents containing these falsehoods and reiterated the false statements to prospective investors both orally and in writing. Osborn, the start-up, and the start-up's ceo and controlling officer sold approximately $3.2 million worth of the notes. The notes were purportedly backed by a personal guarantee from the start-up's ceo. In addition, osborn, knowingly or recklessly, used some of the proceeds of the notes to pay back earlier investors, contrary to the disclosed use of proceeds in the offering documents. As a result of the conduct described above, osborn willfully violated section 17(a) of the securities act, willfully violated section 10(b) of the exchange act and rule 10b-5 thereunder, and willfully aided and abetted and caused the start-up's and its ceo's violations of section 17(a) of the securities act and section 10(b) of the exchange act and rule 10b-5 thereunder.
