Two former Arizona brokers have been charged with stealing over a million dollars from investors in a project to develop tankless water heaters, announced the SEC on Tuesday.
According to the SEC's complaint, Jeffrey Stebbins, of Mesa, Ariz., and Corbin Jones, of Gilbert, Ariz., used four entities (including Noble Systems, Inc. and Noble Innovations, Inc.) to fraudulently solicit $6.3 million over a period of three years.
Stebbins and Jones allegedly told investors that the investment funds would be used to further a tankless water heater venture. Instead, the men allegedly stole 30% of the funds invested for their personal use.
The complaint also accuses Stebbins and Jones of exploiting non-public information to fraudulently obtain more than $6 million in stock for themselves to the detriment of investors. According to the SEC, Stebbins and Jones, as consultants to Noble Innovations, recommended the company conduct a 20:1 reverse split and merge with Noble Private. They then allegedly used this information to defraud investors and enrich themselves in a fraudulent share swap.
“They fraudulently duped certain shareholders in one of the companies, Noble Systems, to swap their private shares for publicly-traded shares in another company, Noble Innovations,” stated the SEC. “This turned out to be nothing more than a fraudulently orchestrated stock swap enabling Stebbins and Jones to reap more than $6 million worth of Noble Innovations stock at the expense of these shareholders who were left with almost nothing.”
The SEC is seeking disgorgement of ill-gotten gains, the payment of prejudgment interest and financial penalties, and a penny stock bar against both Stebbins and Jones.