A federal judge has issued a partial summary judgment against Abraham “Avi” Mirman, in connection with a fraud and manipulation case involving the sale of unregistered shares in Liberty Silver Corp. (formerly OTC: LBSV).
Mirman figured into a September 2019 Sharesleuth investigation into cbdMD Inc. (Nasdaq: YCBD).
The Securities and Exchange Commission alleged in August 2017 that Mirman, while working as head of investment banking at John Thomas Financial Corp., helped lay the groundwork for the sale of millions of unregistered Liberty Financial shares held by promoter Robert Genovese.
Genovese, who used an offshore entity to sell 6.6 million Liberty Silver shares through John Thomas Financial, settled with the SEC in 2019. He and the offshore entity agreed to pay $4.5 million in disgorgement, penalties and interest.
A second planned sale of 6.5 million shares held by another offshore entity was thwarted when the SEC halted trading in Liberty Silver’s shares.
U.S. District Court Judge Lorna G. Schofield of the Southern District of New York, ruled March 26 that the SEC had not demonstrated that Mirman played a significant enough role in the first transaction to warrant summary judgment.
But she found that he clearly participated in the opening of a trading account for the second offshore entity, and in the creation of misleading documents intended to clear the way for the sale of the additional 6.5 million shares.
Schofield noted that although those sales never went through, the evidence showed that John Thomas Financial had offered them to customers.
Mirman previously was chief executive of Lillis Energy Inc. (AMEX: LLEX), a Texas-based oil and gas company that had received funding from cbdMD’s chairman, Martin A. Sumichrast. Mirman resigned prior to the SEC bringing charges in the Liberty Silver case.
Our investigation into cbdMD noted that, even though Mirman was facing those charges, he was allowed to provide a bridge loan that helped pave the way for the acquisition of the CBD business by Level Brands, another Sumichrast creation that was failing.
The bridge loan was converted to shares in the combined company.
