The Securities and Exchange Commission said a California company and its founder falsely touted record revenues, when its earnings came from sham transactions with a secret affiliate. Medbox said it sold vending machines capable of dispensing marijuana on the basis of biometric identification. Instead, nearly 90% of revenue in the first quarter of 2014 came from "sham transactions" with a shell company, the SEC says. Vincent Mehdizadeh and Medbox, which has since changed its name to Notis Global, have agreed to settle the SEC's charges, and Mehdizadeh will pay a fine of more than $12 million and agreed to be barred from serving as an officer or director of a public company or participating in any penny stock offerings. Litigation continues against then CEO Bruce Bedrick, Mehdizadeh's then fiancee Yocelin Legaspi, and the shell company, New-Age Investment Consulting.
Copyright © 2017 MarketWatch, Inc.