On Wednesday, the Securities and Exchange Commission announced that two video game companies and their principal had agreed to pay $293,000 for misleading investors. The SEC complaint alleges that Florida-based Vergeous LLC, Dream Team Partners LLC, and Paul E. Renfroe raised approximately $1.2 million from investors across several states. Many of the investors were elderly consumers that were also clients of Renfroe’s other business.

From at least June of 2013 to June of 2016, the defendants raised roughly $1.2 million from 33 investors in Florida, Tennessee, Texas, Mississippi, Indiana, Alabama, and South Carolina through a series of unregistered offerings. The complaint insists that the purpose of the offerings was to fund video game projects for the companies. Renfroe assumed the majority of the responsibility for raising money.

According to the complaint, Renfroe advertised the securities on his radio show, as well as on Vergeous’ website. When distributing offering materials to investors, the defendants are accused of making omissions and misrepresentations, such as failing to disclose Renfroe’s disciplinary history, the use of some investor proceeds to pay back debt and back pay associated with a suspended project, and Dream Team’s complete ownership of intellectual property rights of the joint video game projects.

Both companies are registered as limited liability companies in Florida with a principal address in Santa Rosa Beach. Vergeous was founded in January of 2013, while Dream Team was formed in April of 2015. Neither company nor their securities have ever been registered with the Commission. Renfroe, who resides in Santa Rosa Beach, is the sole proprietor of Emerald Coast Financial Accounts LLC. Previously, Renfroe was connected with several broker-dealers and held Series 6, 22, and 63 licenses. Renfroe consented to an NASD permanent bar from association with any NASD member in June of 2002.

The complaint alleges that Vergeous raised money to finance a video game project called Novus. The project was suspended in 2014. Then, Dream Team and Vergeous entered into a joint venture and began selling shares to investors to purportedly fund “free-to-play” video games.

Renfroe solicited investments for both. He drafted offering materials and created a video advertising the investment. The information was later posed on YouTube, Vergeous’s website, and the Crowdfunding website fundable.com.

According to the SEC complaint, Renfroe began offering so-called “Family Legacy Shares” in Vergeous in May of 2015. He is accused of advertising the investments on his week radio show “Emerald Coast Senior Show” on at least three occasions. The SEC Complaint alleges that Renfroe was not a registered broker-deal with the SEC. Investors are encouraged to visit the SEC’s website to check the credentials of individuals attempt to sell investments.

The defendants have consented to the entry of final judgments without admitting or denying the allegations. The trio will be required to pay $203,950 in disgorgement and interest. Renfroe has also been ordered to pay a penalty of $89,078.

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