The U.S. Securities and Exchange Commission filed a lawsuit against longtime marijuana investor Douglas Leighton, alleging that he and six associates made millions of dollars by engaging in illegal stock manipulation involving Denver-based cannabis technology firm MassRoots.
The suit alleges that Leighton – founder of Dutchess Capital Management and current principal at Altar Rock Capital – and the other defendants purchased roughly 90% of MassRoots shares in a private offering in 2014. A year later, Leighton steered the company toward a public offering.
In the interim, the suit alleges, Leighton helped promote the company and its stock “so that Leighton would have sufficient public demand for his shares and could sell them at a large profit.”
The suit, first reported by New Cannabis Ventures, also contends the defendants deliberately omitted their holdings in MassRoots, or their stock sales, in filings to the SEC.