WASHINGTON (Legal Newsline) — The Securities and Exchange Commission (SEC) announced Oct. 11 it has charged three individuals who owned Starship Snack Corp. for allegations of defrauding investors.
According to the SEC, Lisa Bershan and her husband, Barry Schwartz, together with business associate Joel Margulies, falsely promised investors the company was developing a caffeine chocolate snack and was close to being acquired by Monster Energy or Coca-Cola Co.
The defendants purportedly told investors, after the acquisition, that their Starship Snack Corp. shares would be exchanged on a one-to-one value basis for shares of Monster of Coca-Cola. The SEC alleged no such arrangement with Monster or Coca-Cola existed and the defendants used the investments to fund their own personal expenses.
“As alleged in our complaint, investors trusted Bershan, Schwartz, and Margulies, but that trust was misplaced,” said Lara S. Mehraban, associate regional director of the SEC’s New York Regional Office. “The defendants constantly reassured their investors with lies, all the while taking their money and spending it on themselves.”
Handling the case for the SEC are Cynthia A. Matthews, Kerri Palen, Thomas P. Smith Jr., and Richard Hong, supervised by Mehraban. The U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation assisted in the case.