SEC Takes Action Against Company For False And Misleading COVID-19 Statements

On May 14, 2020, the United States Securities and Exchange Commission (“SEC”) announced it was charging Turbo Global Partners, Inc. (“Turbo”) and its chief executive officer, Robert W. Singerman (“Singerman”) with fraud based on statements made in its press releases and suspended trading in Turbo.  See SEC Litigation Release No. 24820, SEC Charges Penny Stock Company and Its CEO for Misleading Covid-19 Claims, https://www.sec.gov/litigation/litreleases/2020/lr24820.htm (May 14, 2020).  Turbo and Singerman allegedly made false and misleading statements in press releases touting that Turbo had the present ability to sell products that could assist in detecting individuals infected with COVID-19.  Id.  Notably, Singerman was previously charged with fraud in 1999 based on his sale of securities through a boiler room network.  Id. 

Specifically, the SEC’s complaint alleges that Turbo and Singerman violated the anti-fraud provisions Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making false and misleading statements.  SEC v. Turbo Global Partners, Inc., et al., No. 8:20-cv-01120 (M.D. Fla. May 14, 2020), Complaint at ¶¶19, 32-35, ECF No. 1.  For example, the SEC’s complaint alleges that on March 30, 2020, Turbo issued a press release stating that it had engaged in a partnership with BeMotion, Inc. (“BeMotion”), which was “ [the] front facing Partner in the multi-national public-private-partnership (PPP) for this innovation which simply stated, is the only scanning technology on the planet with non-contact intelligent human temperature screening and facial recognition.”  Id. at ¶19.  In fact, “BeMotion was not engaged in any public-private partnership or any partnership involving a governmental entity.”  Id. at ¶20.

Additionally, Turbo also touted that this scanning technology “instantly RED FLAGS an elevated body temperature and is 99.99% accurate, and is the only system that includes both state-of-the-art human body temperature scanning and facial recognition.”  Id. at ¶23 (emphasis in original).  However, the SEC’s complaint alleges that “the technology did not have facial recognition capability, but only face identification technology,” and that BeMotion did not authorize Turbo to make that statement.  Id. at ¶24.  Indeed, with respect to the technology Turbo touted, the SEC’s complaint alleges that “[t]he technology only had face detection ability (i.e., it could distinguish a face from a cup of coffee).”  Id. at ¶20.  

The SEC’s full complaint can be found here:  

https://www.sec.gov/litigation/complaints/2020/comp-pr2020-111-turbo.pdf