(John Leyba, Denver Post file)

Pot stocks: SEC inquiry into Denver-based FusionPharm ongoing

Common stock trading for FusionPharm Inc., a Denver-based company that recycles shipping containers into greenhouses marketed to cannabis growers, resumed trading Monday amid a federal securities inquiry into its activity.

FusionPharm was the fifth pot-related company to have sales of its stock halted by the U.S. Securities and Exchange Commission.

The SEC stopped trading on FusionPharm stock on May 16 over concerns about certain financial disclosures.

As part of that action, the company said in a statement Monday that its offices in Commerce City were raided last month, records and computers were seized, as was about $200,000 from one of its bank accounts.

FusionPharm CEO Scott Dittman disclosed that his brother-in-law, William Sears, appears to be the focus of the SEC inquiry, particularly because he had pleaded guilty in 2007 in New York to federal charges of securities fraud and conspiracy to commit bribery.

“The company also believes the government is reviewing the trading history of Mr. Sears in the company’s common stock,” FusionPharm’s statement said.

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The company, whose stock trades on over-the-counter Pink Sheets, was down to $1 on Tuesday. Companies that trade on the Pink Sheets do not file financial reports with the SEC.

“We are both saddened and confused by the actions taken against us by the federal government,” Dittman said in the statement. “We intend to cooperate with the authorities … to show our prior actions were taken in good faith.”

Neither Dittman nor Sears responded to efforts to reach them.

The company said the SEC has inquired about its 2012 financial statements, revenue receipts and its failure to disclose Sears purchases of company stock.

It also said Sears is currently or had been affiliated with four companies that do business with FusionPharm, including Meadpoint Venture Partners, Bayside Realty Holdings, and Vertifresh.

In the New York case, Sears was sentenced to one month in prison, to be served at a facility as close to Thornton as possible, records show, and was later confined to his home for six months. He also paid a $15,000 fine and was on three years of supervised probation.

He was indicted with two others for allegedly manipulating the price of shares of a company, Vencap Inc., a business that purportedly developed and sold projection display screens to supermarkets.

Like FusionPharm, Vencap was traded on the Pink Sheets.

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Sears was CEO of Vencap’s subsidiary, Vidiem. According to court filings, the alleged plan was to manipulate artificial demand for Vencap by paying bribes to stock brokers who in turn would have clients buy the company’s stock.

Their plan was dismantled by undercover investigators who worked as brokers and puffed up the stock to nearly a dime a share from a penny.

David Migoya: 303-954-1506, dmigoya@denverpost.com or twitter.com/davidmigoya

This story was first published on DenverPost.com