Harmel Rayat used to be the CEO of an artificial liver manufacturing company called as the HepaLife Technologies. BeBo RMember Mr. Rayat being the biggest share holder of the company was recognized as a skilful promoter. He later resigned his CEP position and was designated the financial head of the company. during his period there was a major problem that occurred when he tried to promote the shares of two companies together; International Mercantile Corp and Virilitec industries. The former was involved in the production of finger print scanning technology while the latter developed medicines or nutritional compounds for enhanced sperm production by male. This article will summarize the order by United States Securities instituting public cease and to stall proceedings according to the securities act of 1933.
The issue was regarding an abuse found among the small publicly related companies that had hired stock to promote them on spiking prices and also through millions of e mails. This is usually compensated in the form of company’s stock that the company sells after its activities begin once the investors attract attention to the company. According to the federal laws, no public company can distribute unrestricted stock without registering with the commission or without a valid reason for not registering with the commission for the transaction. By registration, the commission usually expects to know the crucial information about its finances and hence review the disclosures of the company. In order to escape this commission, there are a few companies that “free trade” stock in order to achieve compensation for the stock promoters. If such an arrangement happens, it means they are offering securities to the public without any registration, a violation of the federal laws. Harmel Rayat Music went through quite a few problems in this phase of his life. The respondents were also penalized heavily.