The U.S. Securities and Exchange Commission this week filed charges against the former head of Denver’s Marley Coffee, who is accused of orchestrating a $78 million scheme to “pump and dump” company stock.
The SEC complaint, which follows a years-long investigation, alleges that Jammin Java Corp., which does business as Marley Coffee, its former CEO Shane Whittle and his associates made millions during late 2010 and 2011 via an illegal stock offering with ties to offshore accounts.
Whittle, 39, a Canadian citizen, resigned from his executive roles in May 2010, and Jammin Java from Los Angeles in 2013. Whittle now lives in or near Kelowna, British Columbia, or Bridgetown, Barbados, according to the SEC.
Brent Toevs, the current CEO of Jammin Java, released a statement saying he’s glad to see the SEC complaint come to light. Toevs and company officials have worked closely with the SEC during its investigation.
“Now (that) there’s a change, shareholders can get some level of closure and hopefully recoup any of the losses they incurred from the alleged ‘pump and dump,’ ” Toevs said in a .
Shares of Jammin Java more than doubled in value Wednesday, jumping more than 7 cents to 14 cents.
The SEC that Whittle secretly gained millions of shares in Jammin Java ahead of a reverse merger into a publicly traded shell company.
Those shares were distributed in 2010 through a network of offshore entities controlled by other named defendants, the SEC claimed.
Whittle then engaged in a “sham financing agreement” and fraudulent promotion with brothers Alexander and Thomas Hunter to boost the stock price, according to the SEC.
The SEC since has implicated the Hunters in other “pump and dump” schemes.
By the middle of 2011, shares of Jammin Java had soared from pocket-change status. The stock hit a high of $6.35 per share and recorded a volume of 20 million shares, up dramatically from the 17 cents per share and no volume in December 2010, according to the complaint filed in U.S. District Court in the California Western Division.
As the stock climbed, Whittle illegally distributed another block of stock through the network. The defendants eventually sold 45 million shares, generating $78 million before the stock lost most of its value, the SEC claimed in the complaint.
Other defendants named in the complaint are Wayne S.P. Weaver of Britain and Canada; Michael K. Sun of India; Rene Berlinger of Switzerland; Stephen B. Wheatley and Kevin P. Miller, both British citizens; and Mohammed A. Al-Barwani of Oman.
Toevs said Jammin Java had nothing to do with Whittle’s “alleged misdeeds.”
“I am confident that between (founder and late reggae legend Bob Marley’s son) Rohan Marley, myself and our team, we’ve been able to win back the trust of (the) community at large by building a meaningful company that has a huge future in front of it,” Toevs said in the statement. “With all of the recent success, such as the company seeing 18 consecutive quarters of revenue growth, it is unfortunate that we seem to be caught up in events which occurred in the past.”
Marley Coffee was founded in 2004, moved to Denver in 2013 and , pedal-powered mobile coffee carts.
Alicia Wallace: 303-954-1939, awallace@denverpost.com or @aliciawallace
