BOSTON (Legal Newsline) - LocatePlus Holdings Corporation, a company that sold online public record databases for investigative searches, on Monday settled securities fraud allegations brought by the Securities and Exchange Commission.
The company was alleged to have engaged in securities fraud from 2005 through 2007 by misleading investors about its funding and revenue in violation of the antifraud and reporting provisions of the federal securities laws.
LocatePlus, without admitting or denying the SEC allegations, consented to an administrative order preventing it from selling its securities. LocatePlus consented to the entry of a final judgment enjoining it from further Securities Act violations. Because the company is bankrupt, the SEC is not seeking a financial penalty.
The SEC filed a civil enforcement action in federal court in Massachusetts on Oct. 14, 2010, after it was alleged that LocatePlus violated the antifraud and the books and records provisions of the federal securities laws.
The United States Attorney's Office for the District of Massachusetts indicted former chief executive officer Jon Latorella and former chief financial officer James Fields a month later, charging them with conspiracy to commit securities fraud for their roles in a scheme to fraudulently inflate revenue at LocatePlus, as well as a scheme to manipulate the stock of another company.
According to the SEC announcement, the SEC amended its previously filed civil injunctive action against LocatePlus, "arising out of the same conduct," to add Latorella and Fields as defendants. LocatePlus declared bankruptcy on June 16, 2011.
Latorella was sentenced to 60 months' imprisonment in the criminal case on June 14.