Peter H. Pocklington, former owner of the Edmonton Oilers National Hockey League franchise, and his company are the subjects of a $14 million SEC fraud complaint involving hidden identities and misappropriated funds.
Pocklington and others raised $14 million by offering unregistered securities in The Eye Machine LLC while hiding his identity and putting investor funds to personal use, according to an April 5 Securities and Exchange Commission complaint in the U.S. District Court for the Central District of California.
The Eye Machine LLC and its associates — Pocklington, owner; Lantson E. Eldred, manager; Terrence J. Walton, chief financial officer; and Vanessa Puleo, Yolanda C. Velazquez, and Robert A. Vanetten, managers and salespeople — raised more than $14 million from 2014 to 2017, according to the complaint.
The company, a biomedical firm specializing in treating macular degeneration, told investors only 28 percent of funds would go to offering costs, but spent about 39 percent on commissions alone, the complaint said. Their attorneys didn’t immediately respond to Bloomberg Law requests for comment.
The Eye Machine, now known as Nova Oculus Partners LLC, has never been registered with the SEC, according to the complaint. Pocklington, the company’s undisclosed founder and control person, has publicly said he suffers from macular degeneration related to age, the SEC said.
Pocklington kept his identity as The Eye Machine’s owner hidden, and referred to Eldred, a lawyer, as “the visual front” or “figurehead” of the company, according to the SEC complaint.
In a separate action in California state court, Eldred, under penalty of perjury, said Pocklington was a consultant for The Eye Machine but had never been one of its shareholders or officers, the SEC said. Pocklington’s true role was also concealed in SEC filings, according to the complaint.
Pocklington used investor funds on personal expenses in addition to misrepresenting the amount used for offering costs, the SEC said. Almost $128,000 in cash went to Pocklington’s wife, while about $56,000 went to the Pocklington’s health insurance and fitness costs, almost $51,000 went to their personal legal expenses, and about $5,000 went to flower purchases, according to the complaint.
Pocklington in 2013 paid $5 million to settle a state securities fraud case in Arizona. He previously pleaded guilty to perjury in 2010. Velazquez settled two securities fraud cases with the SEC, one in 2005 and the other in 2009, without admitting or denying wrongdoing.
Pocklington, in his stint as the Oilers’ owner, is best known for trading hockey legend Wayne Gretzky to the Los Angeles Kings in 1988. Pocklington sold the team in 1998.
Pocklington was the victim of a kidnapping in 1982. He was held hostage for more than 11 hours and then shot in the arm while law enforcement attempted to apprehend the kidnapper.
Michael P. McCloskey, a partner at Wilson Elser Moskowitz Edelman & Dicker LLP’s San Diego office, represents Pocklington, The Eye Machine, Eldred, Walton, and Vanetten. James W. Spertus, managing partner at Los Angeles-based Spertus Landes & Umhofer LLP, represents Velazquez and Puleo.
The case is SEC v. Pocklington, C.D. Cal., No. 5:18-cv-00701, complaint filed 4/5/18.
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