A US businessman has been charged for fraud after luring women he met on dating sites into dodgy investments in his own company.
Last Friday, it was revealed that 63-year-old Thomas J. Connerton had been charged by the SEC for persuading prospective dates into investing in his company, Safety Technologies LLC, only to spend the money on personal expenses.
Connerton used online dating sites to inform women that his company, Safety Technologies, had developed a new type of rubber glove that was more resistant to cuts and punctures, and the company was about to secure huge deals for the product.
Convincing them of his knowledge of the product’s success and saying investors were due an imminent, large payout, six women Connerton met online and 14 of their friends and families put money into the company.
An article by Forbes revealed that 36% of the company’s investors and 51% of the $2.3m the fraudster raised could be linked back to his online dating activities.
However this money did not stay in the company bank account, but instead was used to fund Connerton’s personal expenses.
Amongst other things, Connerton was found to have purchased a $20,000 engagement ring for his online date-turned-investor with company money.
Paul G. Levenson, the Director of the SEC’s Boston Regional Office said: “We charge Connerton with lying about the state of his business and exploiting personal connections to lure in investors.
“Investors beware: a rosy picture of a business that’s about to take off could still lead to a total loss of investment.”
The SEC also revealed that Connerton was not registered to sell investments, saying he: “Failed to comply with the requirements for private offerings exempt from registration under the federal securities laws, such as providing investors with appropriate financial information and confirming that they have sufficient knowledge and experience to evaluate the merits and risks of the investment.”
The SEC are seeking a permanent injunction and the repayment of the funds spent by Connerton, and in the meantime have frozen Connerton and Safety Technologies’ assets, preventing any further fraudulent activity.