Motions to dismiss charges against Pocklington denied
Motions to dismiss securities fraud charges against former Edmonton Oilers owner Peter Pocklington have been denied by a U.S. court despite two of his company executives having certain claims dismissed.
Pocklington was charged by the Securities and Exchange Commission (SEC) earlier this year for allegedly hiding his criminal past and misappropriating investor funds in relation to his Californiabased company The Eye Machine, founded in 2014.
In information previously released by the SEC, the 76-year-old was sentenced to two years probation and community service after pleading guilty to a federal felony perjury charge in 2010 for lying under oath in a bankruptcy case.
He was then ordered to pay more than US$5 million as part of a settlement for unrelated Arizona securities fraud and registration charges relating to two mining companies.
In court documents released last week in the U.S. District Court in California, the SEC alleges that Pocklington’s company, now called Nova Oculus, raised more than US$14 million between 2014 and 2017 “while concealing the true identity of the company’s controlling leader, misappropriating investor funds, and funnelling undisclosed and excessive commissions to sales agents.”
The company was structured in such a way that Pocklington’s attorney, Lantson Eldred, was the “visual front” for the company while the former Canadian entrepreneur and NHL team owner actually “controlled operations from behind the scenes.”
The reason, the SEC says, was to prevent investors from learning his identity because of his “checkered history.”
In addition, “Pocklington and Eldred misled investors as to how the funds raised would be spent,” the documents claims.
Additionally the SEC contends Pocklington also participated in misappropriating US$681,587 of investor funds for personal use.
Some of that money, the SEC alleges, included cash payments to Pocklington’s wife Eva and payments to her credit card as well as legal expenses, charitable and political donations, flowers and retail purchases including clothing and furniture.
Money was also paid to several other companies that “had no legitimate claim to these payments.”
The court found omissions to conceal Pocklington’s involvement in the company were “false and misleading.”
In a news release this week issued by the company, counsel Becky James described the SEC’s case as a “baseless attack” and that the SEC’s “one-sided and often misleading allegations did not demonstrate any wrongdoing by the company or the individuals involved.”
However, of the seven claims being challenged, only two were dismissed in favour of the defendants.
One of those was against Eldred as it applied to misrepresentations made in private placement memoranda offered to investors.
The other dismissal was a negligence claim against accountant and company chief financial officer Terrence Walton.