South Florida Arbitration & Litigation Lawyer Blog
Securities and Exchange Commission v. Jeffrey Stebbins and Corbin Jones, Civil Action No. CV 13-755-PHX-SRB
SEC Charges Two Arizona-Based Brokers with Defrauding Investors in Tankless Water Heater Venture
The Securities and Exchange Commission recently filed a complaint in the United States District Court for the District of Arizona, charging two former brokers in Arizona with stealing investments in a project to develop tankless water heaters.
The SEC alleges that Jeffrey Stebbins of Mesa, Ariz., and Corbin Jones of Gilbert, Ariz., diverted at least $1.8 million of investor money for their personal use and fraudulently obtained more than $6 million in stock for themselves to the detriment of investors. Often used in residences, tankless water heaters are generally designed to instantly heat water as it passes through pipes rather than in large containers like traditional water heaters. Stebbins and Jones personally told investors that all of the money they raised would be used to develop the tankless water heater venture. Instead, they diverted nearly 30 percent of the funds they raised to pay unrelated business expenses and support their lavish lifestyles, including the lease of luxury automobiles.
According to the SEC’s complaint, Stebbins and Jones solicited investors for the tankless water heater project during a three-year period by offering securities through a variety of companies. Besides misappropriating $1.8 million for themselves, 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. This turned out to be nothing more than 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. Stebbins and Jones also deprived early investors in the water heater venture of more than $1 million of Noble Innovations stock that rightfully belonged to them. Throughout much of this time, Stebbins and Jones traded Noble Innovations stock by using 28 accounts in 18 different names with 14 separate brokers to ultimately profit by more than $557,000. Stebbins and Jones never reported their significant holdings in Noble Innovations as they were required to do under the securities laws.
Stebbins and Jones are charged with violating Section 17(a) of the Securities Act of 1933, Sections 10(b), 13(a), 15(a) and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 13d-1, 13d-2 and 16a-1 thereunder. The SEC’s complaint seeks an injunction, disgorgement of ill-gotten gains, financial penalties and a penny stock bar against Stebbins and Jones. Â
In a related action, the Commission issued a settled Order Instituting Proceedings Pursuant to Section 12(j) of the Securities Exchange Act of 1934, Making Findings, and Revoking Registration of Securities revoking registration of each class of Noble Innovations, Inc.’s securities due to the company’s failure to make required periodic filings. (Rel. 34-69380; File No. 3-15278)
Contact Us:
With extensive courtroom, arbitration and mediation experience and an in-depth understanding of securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.
At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.