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SEC Files Charges in $57 Million Office Space Investment Scheme

Washington DC, USA - January 13, 2018: US United States Securities and Exchange Commission SEC entrance architecture modern building sign, logo, american flag, looking up sky, glass windows reflection

The Securities and Exchange Commission filed charges last week against James Robinson and David Kennedy in connection with an investment scheme that defrauded investors out of more than $57 million.

The SEC previously charged the principal of the scheme and associated entities with securities fraud.

The SEC alleges that between approximately September 2015 and July 2016, Robinson and Kennedy raised over $7.5 million from more than 100 investors in the fraudulent scheme. The complaint further asserts that Robinson and Kennedy recruited a network of sales agents to sell investments in co-working spaces operated by Bar Works Inc. and Bar Works 7th Avenue Inc. using false and misleading offering materials.

According to the SEC’s complaint, the materials falsely touted the background of Bar Works’ purported chief executive officer, “Jonathan Black,” and omitted any mention of Renwick Haddow, the actual individual controlling the entities.

According to the complaint, Robinson and Kennedy knew that “Black” was fictitious, that Haddow secretly ran the Bar Works companies, and that Haddow had previously been charged by the United Kingdom’s securities regulator for an unrelated investment scheme. In return for their roles in the Bar Works scheme, Robinson and Kennedy, through a company they jointly owned called United Property Group, received at least $2 million from Haddow and the Bar Works companies.

According to Jonathan Black’s fictitious LinkedIn page, Bar Works was presented as a “co-working” space based in New York City.

The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges Robinson and Kennedy with violations of the antifraud provisions. The complaint also charges Robinson and Kennedy with aiding and abetting Haddow’s and the Bar Works companies’ violations of the antifraud provisions.

The SEC previously charged Haddow and the Bar Works companies with violating the antifraud provisions of the federal securities laws. On Sept. 10, 2019, the District Court for the Southern District of New York entered a judgment against Haddow, permanently enjoining him from future violations of the securities laws, and leaving open monetary relief to be determined at a later date. In a separate administrative proceeding, instituted on Nov. 22, 2019, Haddow agreed to be barred from the securities industry.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Robinson and Kennedy.

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