Skip to content
The DI Wire
Click Here to Subscribe to Our Free Daily News Updates

Medsis to Pay Over $15 Million in Securities Offering Fraud

Medsis to Pay Over $15 Million in Securities Offering Fraud. Broker, broker-dealer, brokerage, financial services, finra, registered investment adviser, regulatory, sec, securities and exchange commission

The U.S. District Court for the District of Massachusetts entered a final judgment against start-up technology company Medsis International, Inc., ordering it to pay approximately $15,871,200 in disgorgement, prejudgment interest, and a civil penalty in a securities offering fraud action previously filed by the U.S. Securities and Exchange Commission in August 2021.

As reported previously in The DI Wire, the SEC’s complaint alleged that Medsis – through co-defendants Joshua Dax Cabrera and Paul Hess – fraudulently raised more than $12.9 million from more than 150 national and foreign investors by offering unregistered securities in Medsis International, Inc., from 2015-2020. The complaint alleged that while offering Medsis securities, Cabrera and Hess made multiple material misrepresentations and misleading statements about Medsis to investors concerning the existence and value of contracts with customers, existing and expected revenue, and business operations. The complaint also alleged that Cabrera and Hess misrepresented to investors their personal use of investor funds.

The District Court entered final judgment after Medsis International defaulted in the action. In addition to ordering the financial remedies, the final judgment permanently enjoins Medsis from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the securities offering registration requirements of Sections 5(a) and 5(c) of the Securities Act. Medsis has been ordered to pay disgorgement of $11,842,015, prejudgment interest of $2,913,045, and a civil penalty of $1,116,140.

In March 2023, the District Court entered final judgment against Cabrera as part of a settlement in which Cabrera agreed to pay disgorgement of $536,895, prejudgment interest of $52,816, and a civil penalty of $536,895, and to be enjoined from future violations of the securities laws and from offering and selling securities to others. The court entered final judgment against Paul Hess, on Dec. 19, 2022, as part of a settlement in which Hess agreed to pay disgorgement of $527,000, prejudgment interest of $109,205, and a civil penalty of $207,183, and to be enjoined from future violations of the securities laws and from offering and selling securities to others.

Click here to visit The DI Wire directory page.