SEC v. Pison Stream Solutions, Inc.; and Joseph James, Jr., No. 1:24-cv-00816, Northern District of Ohio (May 8, 2024) — Complaint

UNITED STATES DISTRICT COURT 
NORTHERN DISTRICT OF OHIO 
EASTERN DIVISION 
__________________________________________ 
       : 
UNITED STATES SECURITIES   : 
AND EXCHANGE COMMISSION,  : 
       :    
   Plaintiff,   : 
       :    CASE NO. ___________ 
  v.     :  
       :  
PISON STREAM SOLUTIONS, INC. and : JUDGE ____________ 
JOSEPH JAMES, JR.,    : 
       : 
   Defendants, and  : JURY DEMANDED 
       : 
GENACTS LLC and SOISI LLC,   : 
       : 
   Relief Defendants.    :   
_________________________________________ :   
 
COMPLAINT 
 
  Plaintiff United States Securities and Exchange Commission (“SEC” or the 
“Commission”) alleges as follows:   
INTRODUCTION 
1. This case involves a fraudulent scheme orchestrated by Defendant Joseph 
James, Jr.,  to divert to himself millions of dollars from investors in a startup company he 
controlled, Defendant Pison Stream Solutions, Inc. (“Pison”).  Between at least December 
2017 and September 2022, James and Pison raised approximately $32.5 million by offering 
and selling Pison’s securities.  Investors were told those funds would be used to support 
Pison.  Despite those promises, James and Pison siphoned off more than $10.8 million of 
investor money for James’s personal benefit.  James used that money to live a luxurious 
lifestyle,  buying homes, expensive cars, jewelry, art, and even a private airplane. 
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2. James directed the offer and sale of debt and equity securities on behalf of 
Pison, and he also offered and sold his personal Pison securities to investors.  In all, at least 
85 investors in 15 states purchased Pison securities, either directly from James or through 
Pison. 
3. Pison is a private chemical coatings company James founded and controlled, 
but Pison never grew beyond its start-up status.  Between 2018 and 2022, Pison only 
recognized approximately $6,800 in total revenues from selling its products and services.  
With almost no money coming in from its operations, the ultimate source of the millions of 
dollars    James received was from Pison investors. 
4. James told investors that Pison was engaged in cutting-edge research and 
development and needed money to grow the company, such as by securing necessary 
inventory.  Although some investor funds were used for those disclosed purposes, 
unbeknownst to investors James took millions of dollars for his own undisclosed personal 
uses. 
5. James portrayed himself as independently wealthy, and he repeatedly told 
investors he never took a salary from Pison.  But the reality was very different.  James 
needed investor funds to live a lavish lifestyle.  James used investor funds to pay personal 
expenses, and buy, among other things, two expensive homes, luxury cars from 
manufacturers including Maserati, Audi, Cadillac, Land Rover and BMW, and fancy 
watches.  He even leased a Rolls-Royce automobile and purchased a 2005   Raytheon 
Hawker 800 XP private jet.  During the period of the fraudulent scheme James had no other 
source of income, and his wife earned a low six-figure income from her employment with a 
different company.  
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6. To help promote the illusion that Pison was a successful business, in August 
2019, James moved the company’s headquarters from Ohio to One World Trade Center in 
New York City.  He also rented an expensive Manhattan apartment for his personal use.  
7. James used two entities he created—Relief Defendants Genacts LLC 
(“Genacts”) and Soisi LLC (“Soisi”)—to hold some of the personal assets he acquired with 
investor funds.   
8. The SEC brings this lawsuit to hold James and Pison responsible for their 
fraud, prevent them from harming future investors, and return money to their victims. 
JURISDICTION AND VENUE 
9. The SEC brings this action pursuant to Section 20(b) of the Securities Act of 
1933 (“Securities Act”) [15 U.S.C. § 77t(b)], and Sections 21(d) and 21(e) of the Securities 
Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78u(d) and 78u(e)]. 
10. This Court has jurisdiction over this action pursuant to Section 22 of the 
Securities Act [15 U.S.C. § 77v] and Section 27 of the Exchange Act [15 U.S.C. § 78aa]. 
11. Venue is proper in this Court pursuant to Section 27 of the Exchange Act [15 
U.S.C. § 78aa]. The acts, practices and courses of business constituting the violations 
alleged herein have occurred within the jurisdiction of the United States District Court for 
the Northern District of Ohio and elsewhere. 
12. James and Pison (collectively, “Defendants”) each reside and transact 
business within the Northern District of Ohio. 
13. Defendants directly and indirectly made use of the means and 
instrumentalities of interstate commerce and of the mails in connection with the acts, 
practices, and courses of business alleged herein, and will continue to do so unless enjoined. 
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DEFENDANTS 
14. Joseph James, Jr., age 58, is a resident of Bratenahl, Ohio.  During the 
relevant time period, James also maintained residences in the States of Florida, Tennessee, 
and New York.  James has served as Pison’s CEO since he formed the company.  James has 
also served as the Chairman of Pison’s Board of Directors since the inception of the board.  
Before founding Pison, James worked as a chemist for various companies.  
15. Pison Stream Solutions, Inc. is a Delaware corporation with its most recent 
principal place of business in Broadview Heights, Ohio.  Pison engages in researching and 
developing products in the chemical coatings industry.  James formed Pison as Pison 
Stream Solutions, LLC in Tennessee in or around 2011.  In August 2018, James directed the 
conversion of Pison Stream Solutions LLC to a Delaware corporation, and it became 
known as Pison Stream Solutions, Inc. 
16. In the course of the SEC’s investigation that preceded this lawsuit, James and 
Pison executed tolling agreements that suspend any applicable statutes of limitations for the 
period November 17, 2022 through May 20, 2024. 
RELIEF DEFENDANTS 
17. Genacts LLC is a Florida for-profit limited liability company formed by 
James in or about February 2019.  James has been its sole member since March 2019. 
18. Soisi LLC is an Ohio for-profit limited liability company formed by James in 
or about March 2018.  James is and has been its sole member. 
 
 
 
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FACTS 
A. Pison’s Business and Finances 
19. James has been Pison’s CEO since he formed Pison Stream Solutions LLC, 
the predecessor to Pison.  Since 2011, James has presented Pison as engaging in cutting-
edge research and development of chemical coatings for niche markets, such as defense, 
aerospace, and automotive applications. 
20. In 2018, after James converted the predecessor LLC into a corporation, he 
gave Pison the trappings of corporate governance.  James created a board of directors (the 
“board”), made himself Chairman, and invited several early investors and also outsiders to 
sit on the board.  At James’s direction, Pison also hired a CFO and other employees. 
21. Since 2011, Pison has never been profitable.  Between 2018 and 2022, Pison 
recognized only approximately $6,800 in total revenues. 
22. Unable to fund operations from the sale of its chemical products or services, 
Pison’s primary source of cash flow was money raised from investors.  Between December 
2017 and September 2022, investors purchased approximately $32.5 million of Pison 
securities in multiple offerings.  Some of those securities were purchased directly from 
Pison, which made a series of offerings of both debt and equity securities.  In other 
instances, James offered and sold his personally-held Pison securities to investors, while 
representing to those investors that he would direct the proceeds of the sales to Pison. 
23. Pison did not differentiate in its use of funds between cash it received from 
investors in the Pison offerings and cash it received when James directed funds to Pison 
after he sold personally-held securities to investors.  Pison used both sources of cash 
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interchangeably.  Pison used investor funds to pay certain operating expenses, and also to 
make payments to James. 
24. At all times, James maintained voting and operational control of Pison.  As 
CEO, James had the power to bind Pison to most corporate actions during the entire time 
from December 2017 until September 2022.  During that same period, James had at least 
joint control of all of Pison’s bank accounts.  James controlled how Pison spent money, and 
all withdrawals from its accounts required his approval. 
25. As more fully described below, Pison and James raised money from investors 
through a series of securities offerings beginning in December 2017.  In that period, Pison 
conducted twelve offerings and filed with the Commission seven Notices of Exempt 
Offering of Securities on Form D under the Securities Act.  In addition, James offered and 
sold his own Pison securities to investors.   
26. The securities offerings and sales were documented with varying degrees of 
formality and detail.  In some instances, the offering documents exceeded one hundred 
pages and contained detailed information about Pison’s business, governance, and finances.  
Other offerings and sales transactions were documented with shorter and less detailed 
purchase agreements.  Still other transactions were documented, if at all, with simple 
agreements confirming little more than the purchase price and the number and type of 
securities being sold. 
27. James communicated directly with prospective investors, either orally or by 
email.  In other instances, agents communicated with prospective investors on behalf of 
James and Pison and acting at their direction.  The agents who assisted James and Pison in 
finding investors or raising funds from existing investors were, themselves, investors.  Some 
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of the agents served on Pison’s board and/or performed work for Pison in some capacity, 
without pay.  
28. As part of James’s efforts to portray Pison as a successful business, in August 
2019 he moved the company’s headquarters from Ohio to One World Trade Center in New 
York City.  James also used investor funds to purchase luxury cars, watches, and other 
items for himself to create the false appearance that he was independently wealthy.  
Meanwhile, James repeatedly told investors he took no salary from Pison, while failing to 
disclose that his lavish lifestyle was funded almost entirely with investor funds. 
29. In reality, Pison always had problems with cash flow.  As time went on, it 
struggled to pay rent and its employees.  It was evicted from its Ohio offices and production 
facility in October 2021 and its One World Trade Center office in April 2023 after it failed 
to make required lease payments.  But despite these cash flow struggles, Pison continued to 
prioritize payments to James, which he used for his personal expenses, at the expense of 
investors and other creditors, as more fully detailed below. 
B. Pison’s Offer and Sale of Securities 
30. Between December 2017 and November 2021, Pison raised approximately 
$10.3 million through a total of 12 offerings of either debt or equity securities.  Each offering 
is discussed in detail in paragraphs 35 - 99 below, and each offering involved “securities,” as 
that term is defined in the Securities Act and the Exchange Act. 
31. The offering documents given to prospective and/or current investors 
identified various uses for the investor funds raised, including purchasing raw materials, 
increasing working capital, research and development, and paying various operating and 
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financing costs.  None of the offering documents disclosed that a significant portion of the 
funds raised would be used by James to pay personal expenses. 
32. When Pison needed more money, James informed Pison’s board. The board 
approved the offerings, but did not track the investor funds Pison raised or received.  The 
board also did not track how Pison or James were using the proceeds of the various 
offerings. 
33. James typically drafted the communications Pison sent to prospective 
investors and provided Pison’s agents with the information they communicated to 
prospective investors.  James or others from Pison typically had oral discussions with 
prospective investors before they invested.  In those discussions, James and others, at 
James’s direction, told prospective investors about Pison’s need for new investor funding to 
pay operating or other business expenses.  James, and others acting at James’s direction, 
never disclosed in those discussions that a substantial portion of the money received from 
investors would be used to pay James’s own personal expenses, a fact that was known to 
James but not others offering Pison securities to investors. 
34. James began using investor funds for his own personal benefit no later than 
March 2018, when Pison wired over $2 million to a title company to purchase a house for 
James.  After March 2018, James and Pison made additional offerings and sales of securities 
without disclosing to investors that James had already begun misusing investor funds.  By 
continuing to offer and sell securities after James had begun using investor funds for his own 
personal purposes but without disclosing that misuse to investors, Pison and James made 
false and misleading statements to investors regarding the use of their funds.    
   
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a. December 2017-September 2018 Debt Offering (“Pison Offering 1”) 
35. Between December 2017 and September 2018, an investor (“Investor 1”) 
purchased a series of six promissory notes, totaling $730,000, from Pison.  Each note had a 
10% interest rate and an initial term of 90 days, which could be extended for an additional 
90 days.  James executed the first five notes as president of Pison Stream Solutions LLC, 
and the sixth note as president of Pison. 
36. Pison did not repay any of the notes at maturity.  At James’s request, Investor 
1 agreed to extend each of the notes due to Pison’s lack of available funds.   
37. In October 2019, Pison and Investor 1 agreed to consolidate all of the 
outstanding amounts into an Amended and Restated Convertible Promissory Note.  The 
Amended and Restated Convertible Promissory Note stated that the funds would “be used 
for the immediate working capital needs of the Company,” except that “organizational, 
legal, accounting, and filing fees payable in connection with this Offering may be paid for by 
the proceeds raised through this Offering.” 
38. The Amended and Restated Convertible Promissory Note also stated: “The 
net proceeds from this Offering may be used to cover the expenses associated with this 
Offering and for working capital purposes of the Company.” 
b. February 2019 – June 2019 Equity Offering (“Pison Offering 2”) 
39.  Between February and June 2019, Pison sold $1,025,000 of equity securities 
to several investors.  James and others at Pison acting at James’s   direction told investors 
those funds would be used to benefit the company.   
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40. In an email dated February 1, 2019, a Pison board member (“Board Member 
1”) wrote to several prospective investors, telling them that “we need some additional 
capital for raw materials over the next two weeks.” 
41. In an email dated May 8, 2019, Pison’s CFO wrote to a group of existing 
investors, saying the company was seeking to raise $2.5 million.  The CFO’s email stated: 
“The proceeds will be used to fund fees required to complete the QPD [Qualified Products 
Database of the Department of Defense] application process, purchase additional raw 
materials and fund working capital requirements . . . .” 
42. In an email to existing investors dated June 13, 2019, on which James was 
copied, Pison’s Vice President of Corporate Business Development (“Vice President 1”) 
wrote that the company had an “immediate need to purchase additional raw materials as we 
continue to build finished goods inventory.”  Vice President 1’s email offered investors the 
opportunity to purchase additional shares of Pison.  Attached to Vice President 1’s email 
were two emails from James stating that Pison had been accepted into the QPD system, and 
would need to increase its working capital to be able to fulfill large volume orders for the 
United States military. 
43. James and the other Pison executives did not disclose to investors their 
money would ultimately be used to pay for James’s   personal expenditures and lifestyle.  
c. March-April 2019 Debt Offering (“Pison Offering 3”) 
44. In March and April 2019, Pison sold additional promissory notes to two 
investors (“Investor 2” and “Investor 3”).  The total face value of the promissory notes was 
$1.5 million.  The notes paid interest at an annual rate of 10%, and the notes were due to be 
repaid on December 31, 2019.   
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45. The notes provided that all current or future promissory notes issued by Pison 
to James, Investor 1, Investor 2, or Investor 3 would be deemed “Senior Notes” that would 
all be paid on a pro rata basis, and would have priority of repayment over loans Pison 
received from any other source.   
46. In October 2019, Pison made another offering of promissory notes on more 
favorable terms for investors than notes previously issued to Investor 1, Investor 2 and 
Investor 3.  Pison agreed to issue new notes to Investor 1, Investor 2 and Investor 3 that 
matched the terms of the new offering.  Thus, in October 2019, Pison consolidated   all of the 
outstanding amounts owed to Investor 2 and Investor 3 into Amended and Restated 
Convertible Promissory Notes that were identical in form to the Amended and Restated 
Convertible Promissory Note with Investor 1.    
47. The Amended and Restated Convertible Promissory Notes stated that 
investor funds would “be used for the immediate working capital needs of the Company,” 
except that “organizational, legal, accounting, and filing fees payable in connection with 
this Offering may be paid for by the proceeds raised through this Offering.”  Again, James 
and Pison failed to disclose to Investors 2 and 3 that their money would ultimately be used 
to pay for James’s   personal expenditures and lifestyle. 
d. July 2019 Equity Offering (“Pison Offering 4”) 
48. On July 6, 2019, Vice President 1 emailed prospective investors to offer 
between $2 million and $3.5 million in additional Pison equity securities.  Vice President 1’s 
email, on which James was copied, said the offering was “an effort to fund immediate 
access to cash to be used primarily to purchase raw materials to produce CARC . . .   .”  
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CARC, which stands for Chemical Agent Resistant Coating, is a specialized type of paint 
used primarily on military vehicles. 
49. Several documents were attached to Vice President 1’s email.  One of those 
documents was an Offering Term Sheet.  The introductory paragraph of the Offering Term 
Sheet stated that the offering was “for the purpose of raising money to facilitate satisfying 
orders from customers subsequent to the inclusion of Pison in the U.S. Army’s Qualified 
Productions Database (‘QPD’), and to pay off a portion of existing debt.” 
50. Next to the heading “Use of Proceeds”, the Offering Term Sheet stated: “The 
net proceeds from this Offering may be used to cover the expenses associated with this 
Offering and for the purposes described in the introductory paragraph of this Term Sheet.” 
51. Pison filed a Form D with the Commission on July 22, 2019 in connection 
with Pison Offering 4.  The Form D stated that $700,000 of the offering proceeds would be 
used to reimburse officers, directors, or promoters for advances to fund working capital 
needs.  That information was contained only in the Form D, and not in the offering 
materials that were distributed to investors.  James signed the Form D. 
52. Several investors purchased equity securities, and the offering resulted in 
Pison raising $3,015,294.  Neither James nor Pison disclosed to the investors their money 
would ultimately be used to pay for James’s   personal expenditures and lifestyle, or that 
Pison would prioritize payments to James over other investors or creditors.  
e.   October 2019-December 2019 Debt Offering (“Pison Offering 5”) 
53. In an email to prospective investors dated October 21, 2019 and transmitted 
through his executive assistant, James stated that the Pison board had authorized an 
offering of convertible promissory notes, as well as the exchange of the existing promissory 
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notes with himself,   Investor 1, Investor 2, and Investor 3 into amended and restated 
convertible notes. 
54. As part of the offering, James provided prospective investors, including 
Investor 1, Investor 2, and Investor 3, with an Offering Term Sheet.  The introductory 
paragraph of the Offering Term Sheet stated the offering was made “for the purpose of 
raising capital to be used for the immediate working capital needs of the Company.” 
55. Next to the heading “Use of Proceeds”, the Offering Term Sheet stated: “The 
net proceeds from this Offering may be used to cover the expenses associated with this 
Offering and for the purposes described in the introductory paragraph of this Term Sheet.” 
56. On October 22, 2019, Pison sold a note to Investor 1 for $100,000.  The note 
was due in 240 days, with interest payable at a rate of 15% for the first 120 days and 25% for 
the second 120 days.  Investor 1 had the option to convert the outstanding debt into Pison 
shares in a contemplated subsequent equity offering.   
57. The October 2019 note stated that there were approximately $8.3 million in 
Senior Notes outstanding as of August 31, 2019 that had a right to be repaid first before any 
other lending source.  But the October 2019 note further stated that the Senior Notes would 
be amended before the closing of the current offering so as to make their repayment 
subordinate in terms of priority to all October 2019 notes. 
58. Investor 2 and Investor 3 each purchased a $150,000 convertible promissory 
note, and Pison received their funds on December 30, 2019. 
59. After Investor 3 inquired about the terms of the notes he purchased, James 
confirmed in an email to Investor 2 and Investor 3 that their notes were on the same terms 
as the October 2019 convertible promissory note offering. 
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60. Pison filed a Form D with the Commission on November 5, 2019 in 
connection with Pison Offering 5.  James signed the Form D. 
61. During Pison Offering 5, James and Pison never told investors James would 
use their money for personal expenditures or prioritize Pison’s payments to James over 
other investors or creditors.  
f.   January 2020 Debt Offering (“Pison Offering 6”) 
62. Pison’s CFO sent an email to prospective investors, all of whom were existing 
Pison shareholders, dated January 9, 2020.  In that email, on which James was copied, the 
CFO stated that, in anticipation of Pison being approved to have products listed in the 
military’s QPD, “[i]t is important that the company has sufficient funding to maintain 
inventory levels to meet anticipated demands and for working capital.” 
63. The CFO’s email went on to state that Pison would soon conduct an equity 
offering.  “In the interim, additional funding is required for inventory purchases and 
working capital.  Pison must have sufficient finished goods available to fill customer orders 
within 10 days of receipt.” 
64. To meet those interim funding needs, the CFO’s email asked the shareholders 
to purchase new debt securities.  The CFO’s email added, “Joe James has committed to a 
$50,000 investment to kick start this process and is requesting that you participate in this 
effort.” 
65. The following day, January 10, 2020, the CFO emailed a package of offering 
documents to the shareholders.  James was copied on the email.  One of the documents was 
an Offering Term Sheet.  The introductory paragraph to the Offering Term Sheet stated the 
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offering was conducted “for the purpose of raising capital to be used for the immediate 
working capital needs of the Company, including the purchase of raw materials.” 
66. Next to the heading “Use of Proceeds”, the Offering Term Sheet stated: “The 
net proceeds from this Offering may be used to cover the expenses associated with this 
Offering and for working capital purposes of the Company.”  None of the materials sent to 
investors disclosed James would use their money for personal uses. 
67. Several investors purchased promissory notes, collectively totaling $133,000, 
in the January 2020 offering.  The promissory notes were due on December 31, 2020 and 
paid interest at a rate of 15% annually.   
g. February 2020 Debt Offering (“Pison Offering 7”) 
68. Pison conducted another debt offering in February 2020.  The promissory 
notes it offered were due on June 15, 2020 and paid interest at a rate of 15% annually. 
69. Pison provided prospective investors with an offering package consisting of 
several documents.  One of the documents provided to prospective investors was an 
Offering Term Sheet. The introductory paragraph to the Offering Term Sheet stated the 
offering was conducted “for the purpose of raising capital to be used for the immediate 
operating and working capital needs of the Company.” 
70. Next to the heading “Use of Proceeds”, the Offering Term Sheet stated: “The 
net proceeds from this Offering may be used to cover the expenses associated with this 
Offering and for operating and working capital purposes of the Company.” 
71. The promissory note stated that there were approximately $4.85 million in 
Senior Notes outstanding, and that the holders of those notes were entitled to be paid first, 
before any other unsecured notes of the company.  The promissory notes represented that, 
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before executing the notes, Pison shall have obtained the agreement of each Senior Note 
holder “that the priority of payment between the holders of the February 2020 Notes shall 
be equal to the priority of payment of the Senior Notes.” 
72. Pison filed a Form D with the Commission on February 8, 2020 in 
connection with Pison Offering 7.  James signed the Form D. 
73. Several investors purchased promissory notes, collectively totaling 
$2,070,000, in Pison Offering 7.  None were told their money would be used by James for 
personal purchases, or that Pison would prioritize payments to James over other investors 
or creditors.   
h.  July 2020 Equity Offering (“Pison Offering 8”) 
74. On July 27, 2020, James wrote an email, which he transmitted to existing 
Pison investors through his executive assistant, in which he discussed a contemplated $5 
million offering of Pison’s shares.  James’s email stated: “Proceeds from the offering would 
be used to purchase active ingredients and other raw materials and produce finished goods 
and for working capital, including funding to support efforts to secure ‘EPA’ approval for 
our antimicrobial product – this product will be sold as a Super Durable Cleaner until a 
EPA registration is available to us.” 
75. James’s email invited interested investors to request a Private Placement 
Memorandum (“PPM”) with additional information about the terms of the offering.  Some 
Pison shareholders expressed interest, and Pison provided the PPM to those investors. 
76. The PPM contained a summary section titled “Key Terms of the Offering and 
the Class A Voting Common Stock.”  In that section, next to the heading “Use of 
Proceeds”, the PPM stated the funds raised in the offering would be used: 
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(a) to acquire raw materials to make sufficient inventory to meet customer’s needs; 
(b) to continue to create and protect the intellectual property and research and 
development of the Company; (c) to fund the sale, marketing and promotion of the 
Company’s services to its potential customers; (d) to provide working capital to fund 
expenses related to general operations and administration of the Company and (e) to 
pay off existing debt, as needed, including, potentially, amounts outstanding under 
the Convertible Notes. The Company may, in its sole discretion, decide to allocate 
the net Offering proceeds to different working capital categories and in any 
proportion it deems reasonable or utilize them for other reasons. 
 
77. The PPM contained a section titled “Remuneration of Directors and 
Executive Officers.”  That section stated that directors were not compensated for their 
services and executive officers had received no salary.  The section further stated: 
“Executive officers have elected to defer going onto the Company’s payroll in order to 
maximize the available cash to fund the Company’s available cash resources.”   
78. One investor purchased shares in the offering for $100,000.  That investor was 
never told that Pison would prioritize paying James over other investors and creditors.  
i. September 2020 Debt Offering (“Pison Offering 9”) 
79. Pison conducted another debt offering in September 2020.  The promissory 
notes it offered were due on October 1, 2021 and paid interest at a rate of 15% annually. 
80. Pison provided prospective investors with an offering package consisting of 
several documents.  One of the documents provided to prospective investors was an 
Offering Term Sheet. The introductory paragraph to the Offering Term Sheet stated the 
offering was conducted “for the purpose of raising capital to be used for the immediate 
operating and working capital needs of the Company.” 
81. Next to the heading “Use of Proceeds”, the Offering Term Sheet stated: “The 
net proceeds from this Offering may be used to cover the expenses associated with this 
Offering and for operating and working capital purposes of the Company.” 
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82. Pison filed a Form D with the Commission on October 8, 2020 in connection 
with Pison Offering 9.  James signed the Form D. 
83. Several investors purchased promissory notes, collectively totaling $670,000, 
in Pison Offering 9.  None of these investors were told their money would ultimately be 
used to support James’s   personal purchases and lifestyle.  
    j.   March 2021 Debt Offering (“Pison Offering 10”) 
84. Pison conducted another debt offering in March 2021.  The promissory notes 
it offered were due on June 30, 2021 and paid interest at a rate of 15% annually. 
85. Pison provided prospective investors with an offering package consisting of 
several documents.  One of the documents provided to prospective investors was an 
Offering Term Sheet. The introductory paragraph to the Offering Term Sheet stated the 
offering was conducted “for the purpose of raising capital to be used for the immediate 
working capital needs of the Company, including the purchase of raw materials.” 
86. Next to the heading “Use of Proceeds”, the Offering Term Sheet stated: “The 
net proceeds from this Offering may be used to cover the expenses associated with this 
Offering and for working capital purposes of the Company.” 
87. Pison filed a Form D with the Commission on April 14, 2021 in connection 
with Pison Offering 10.  James signed the Form D. 
88. Several investors purchased promissory notes, collectively totaling $125,000, 
in Pison Offering 10, without being told their money would ultimately be used for James’s 
personal benefit.   
 
 
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    k.   June 2021 Debt Offering (“Pison Offering 11”) 
89. Pison conducted another debt offering in June 2021.  The promissory notes it 
offered were due 12 months after issuance and paid interest at a rate of 25% annually. 
90. Pison provided prospective investors with an offering package consisting of 
several documents.  One of the documents provided to prospective investors was an 
Offering Term Sheet. The introductory paragraph to the Offering Term Sheet stated the 
offering was conducted “for the purpose of raising capital to be used for the immediate 
working capital needs of the Company, including the purchase of raw materials.” 
91. Next to the heading “Use of Proceeds”, the Offering Term Sheet stated: “The 
net proceeds from this Offering may be used to cover the expenses associated with this 
Offering and for working capital purposes of the Company, including payment of certain 
legal fees, back utilities and back rent to the landlord of the Company’s Brecksville, Ohio 
facilities.” 
92. Pison filed a Form D with the Commission on July 6, 2021 in connection 
with Pison Offering 11.  James signed the Form D. 
93. Several investors purchased promissory notes, collectively totaling $418,905, 
in Pison Offering 11, again without being told their money would go to James.   
l. October 2021 Equity Offering (“Pison Offering 12”) 
94. On October 28, 2021, James wrote an email, which he transmitted to existing 
Pison investors, in which he discussed a contemplated $3 million offering of Pison’s shares.  
Attached to James’s email was a PPM for an offering of Pison’s shares, as well as a 
presentation about Pison’s business. 
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95. The PPM contained a summary section titled “Key Terms of the Offering and 
the Class A Voting Common Stock.”  In that section, next to the heading “Use of 
Proceeds”, the PPM stated the funds raised in the offering would be used: 
(a) to acquire raw materials to make sufficient inventory to meet customer’s needs; 
(b) to continue to create and protect the intellectual property and research and 
development of the Company; (c) to fund the sale, marketing and promotion of the 
Company’s services to its potential customers; (d) to provide working capital to fund 
expenses related to general operations and administration of the Company and (e) to 
pay off existing debt, as needed, including, potentially, amounts outstanding under 
the Convertible Notes. The Company may, in its sole discretion, decide to allocate 
the net Offering proceeds to different working capital categories and in any 
proportion it deems reasonable or utilize them for other reasons. 
 
96. The PPM contained a section titled “Remuneration of Directors and 
Executive Officers.”  That section stated that directors were not compensated for their 
services and executive officers had received no salary.  The section further stated: 
“Executive officers have elected to defer going onto the Company’s payroll in order to 
maximize the available cash to fund the Company’s available cash o [sic].”   
97. The PPM contained a section titled Use of Proceeds.  That section stated that 
the proceeds of the offering would be used for “working capital to fund expenses related to 
general operations and administration of the Company (consists primarily of employee 
compensation, insurance, regulatory and legal fees, facilities and related costs and 
outstanding accounts payable[)].” 
98. Pison filed a Form D with the Commission on November 29, 2021 in 
connection with Pison Offering 12.  James signed the Form D.   
99. Two investors purchased shares in the offering, collectively totaling $130,000, 
without being told Pison would use the money to prioritize payments to James over 
investors and other creditors.  
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C. James’s Offer and Sale of Personally-Held Pison Securities 
100. Between at least December 2017 and September 2022, James offered and sold 
his personally-held Pison securities and raised approximately $22.2 million from investors.  
James found prospective investors through referrals from family, friends, employees, or 
sought additional investments from existing investors. 
101. Pison Stream Solutions LLC changed its corporate form in August 2018, and 
converted its membership interests into shares of Pison stock.  Thereafter, the securities 
James sold to investors were his personal Pison shares.  James sometimes documented sale 
of his shares with a share purchase agreement.   
102. In oral communications, James told investors he was selling his personal 
securities to raise funds for Pison either because Pison needed money in short order to 
secure necessary inventory, purchase raw materials, or satisfy other immediate obligations, 
and/or to avoid diluting existing shareholders’ holdings through issuance of additional 
equity securities of Pison. 
103. James told investors he would direct or loan the proceeds of the sales to Pison 
for the company’s use.  James told certain investors he would retain approximately 35% of 
the proceeds to cover tax liabilities he incurred on the transactions.  James failed to tell 
investors that he would use a substantial portion of the proceeds to fund his own personal 
lifestyle.  In reality, James never paid anywhere close to 35% of his personal sales proceeds 
for income taxes, and instead spent investor money on lavish purchases and expenditures. 
a. December 2017 – January 2018 
104. In December 2017 and January 2018, James made two sales of his own 
membership interests in Pison Stream Solutions, LLC to Investor 1. 
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105. Before the sales, James explained to Investor 1 that he was selling his own 
equity securities but that he would put the money back into Pison. 
106. Investor 1 paid $50,000 to James for each purchase, for a total of $100,000. 
107. Each of those sales was documented with a written consent of the members of 
Pison Stream Solutions, LLC.  James signed both consents on behalf of the company.  Each 
of the consents stated that James was transferring 1% of his membership interests to 
Investor 1.   
    b.    February 2018 – November 2018  
108. Beginning in February 2018, James and his agents, acting at James’s 
direction, approached several prospective investors and told them Pison needed money.  
James or his agents, at James’s   direction, told the prospective investors their funds would be 
used to support Pison.  In some instances, James or his agents told prospective investors he 
would retain a portion of the investor funds to cover capital gains tax liabilities he would 
incur on the sales.  But neither James nor his agents, who were unaware of how James 
would spend the money, told prospective investors that James would use invested funds to 
pay any other personal expenses.   
109. Approximately five investors purchased securities from James between 
February 12, 2018 and November 14, 2018.  Collectively, those investors paid $12,673,428 
for those securities.  
c. September 2019 
110. In September 2019, James approached Investor 2 and Investor 3 to offer them 
additional Pison securities from his personal holdings. 
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111. James told Investor 2 and Investor 3 that the money they invested would go 
to support Pison. 
112. On or about September 9, 2019, Investor 2 and Investor 3 each purchased 
$500,000 of Pison securities, for a collective total of $1 million, from James. 
d. November 2019 
113. In late October and early November 2019, James offered additional Pison 
securities he owned to prospective investors from his personal holdings. 
114. On November 5, 2019, James entered into a Share Purchase Agreement with 
a group of approximately ten investors who agreed to purchase from James a collective total 
of 8.125% of Pison’s outstanding securities for $1,625,000. 
115. The Share Purchase Agreement contained a section titled Representations 
and Warranties made by James.  One of the warranties James made was “that at least 65% 
of the proceeds from the sale of the Shares will be loaned back into Pison, on terms similar 
in nature to previous lending agreements with Joseph James. . . .” 
116. In accordance with the Share Purchase Agreement, the investors collectively 
paid $1,625,000 to James for his Pison securities. 
e. January 2020 – December 2020 
117. Between January 2020 and December 2020, James sold additional shares of 
his Pison stock to approximately 25 investors. 
118. Before those investors agreed to invest, James made oral representations to 
them that the funds they provided to him would be used for the benefit of the company. 
119. Some of the share purchase agreements used during this time period included 
an addendum signed by James.  The addendum, which was dated May 13, 2020, stated: 
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“Joseph James, CEO, President and Founder of the Company has agreed, that the proceeds 
from this issuance, will be used to support the needs of the company going forward in the 
form of loans with interest rate set and approved by the Board of Directors of Company.”  
120. Investors paid James a total of $4,569,822 during this time period to purchase 
Pison securities from him. 
f. January 2021 – December 2021 
121. Between January 2021 and December 2021, James sold additional shares of 
Pison stock to approximately 23 investors. 
122. Before those investors agreed to invest, James made oral representations to 
them that the funds they provided to him would be used for the benefit of the company. 
123. Some of the share purchase agreements used during this time period included 
an addendum signed by James.  This addendum, which was dated August 13, 2021, differed 
somewhat from the May 13, 2020 addendum.  The August 13, 2021 addendum stated: 
“Joseph James, CEO, President and Founder of the Company has agreed, that the proceeds 
from the Share Sales, will be used to support the needs of the company going forward in the 
form of loans with interest rate set and approved by the Board of Directors of Company.”  
James further agreed that loan proceeds “will be used exclusively for salaries and rent 
expense of the Company, or to pay down existing liabilities relating to the same.”   
124. The addendum also stated that James was entitled to retain “such portion of 
the Share Sale proceeds that is reasonably deemed to represent Mr. James’s capital gains tax 
liability in connection with the Share Sale.”  Neither the share purchase agreement nor the 
addendum provided that James would retain investor funds for any other reason.  
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125. In total, investors paid James a total of $2,099,548 during this time period to 
purchase Pison securities from him. 
g. January 2022 – November 2022 
126. Between January and November 2022, James sold equity securities to one 
additional investor for $150,000.  
D. Pison and James Made Oral and Written Misrepresentations to Investors 
127. In addition to statements in the offering documents and purchase agreements 
discussed above in paragraphs 30 - 125, James,  and others from Pison acting at his 
direction, made numerous oral and written representations to prospective investors.  James 
and his agents—including Board Member 1, Vice President 1, Investor 1’s father, Investor 4, 
Investor 5, and Investor 6—repeatedly represented in oral communications during the 
period from December 2017 to September 2022 that investors’ money would be used to 
support Pison’s business operations.  Neither James nor anyone else from Pison, who were 
unaware of how James spent investor money, told investors James would use their money 
to fund his personal purchases and support his extravagant lifestyle. 
128. On some occasions, James or his agents told investors he would retain a 
portion of the proceeds from the sale of his personal securities to cover tax liabilities he 
incurred in connection with the sale.  James and his agents, who were unaware of how 
James spent investor money or the amount of taxes he incurred, did not disclose to 
prospective investors that he would retain funds for any other personal use or that James 
would pay taxes in amounts far less than the amount of investor money he retained for 
purported tax purposes. 
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129. In addition to oral representations, James and his agents also represented in 
written communications that funds raised would be used for the benefit of Pison, and not for 
the personal benefit of James. 
130. For example, in or around November 2019, James engaged in discussions to 
sell his personal securities to a group of investors, including people who were not current 
Pison shareholders.  The sale required authorization from Pison’s board.  James told the 
board members that he would loan 65% of the proceeds of the sales to Pison, while retaining 
the remaining 35% to pay capital gains taxes he incurred on the sales.  Based on the 
representations made by James, the board authorized the sale of James’s securities. 
131. One of the investors to whom James offered some of his personal securities in 
November 2019 was Investor 4.  After agreeing to invest, Investor 4 asked James if Pison 
still needed more funds and offered to contact a few of his friends to see if they would be 
interested in purchasing securities from James.  After James agreed, Investor 4 located some 
additional people who were willing to invest. 
132. In a text message dated November 4, 2019, Investor 4 told James that all of 
the prospective investors he identified would need assurances that the money, less any tax 
liabilities, would be going to Pison.  Later that day, James responded to Investor 4 with a 
text message stating “The monies being raised are definitely going into the business less 
taxes etc.”   
133. In another example, on May 10, 2020, Vice President 1 sent a text message to 
James saying he had located a potential investor interested in purchasing James’s personal 
securities.  But Vice President 1 requested that, to facilitate the sale, James provide a 
document confirming the “proceeds of which will go to support Pison efforts.”   
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134. Less than an hour later, James responded to Vice President 1’s request with a 
series of text messages.  First, James stated: “Btw I am sure you know I will be using the 
money to help fund the company.  The other two guys said they didn’t need those 
restrictions because they know that I will be using the funds because I have since day one.”  
Then, James added: “Of course I have to pay taxes out of etc.”  James’s response concluded 
by stating: “Just know [Vice President 1], funds will be used for company expenses raw 
materials as in the past etc.”   
135. Another time, on July 28, 2020, two prospective investors sent Investor 4 an 
email expressing interest in purchasing Pison securities from James, but posing several 
questions about the company.  One of their questions was whether the capital being raised 
would go to the company.  Investor 4 responded by saying James “commits to putting 
minimum 70% into co. 30% usually reserved for taxes.”  Investor 4 also confirmed that 
capital had been used the same way in previous sales and that there would be a 
representation and warranty to that effect in the share purchase agreement.   
136. In yet another example, on November 17, 2020, Vice President 1 sent a text 
message to James saying there were a few potential investors interested in purchasing 
securities.  Vice President 1 posed several questions to James: “How much do you need?  
What is the specific use of proceeds?  Can [CFO] show a 60 day cash flow with projected 
revenues and expenses?”   
137. Twelve minutes later, James responded with a text message: “[Vice President 
1] we are behind on bills payroll utilities general things remember our cash burn is 600k and 
we only been bringing in minimums over the last two months to cover payroll so we are 
behind we need to pay insurance etc.”   
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138. The representations made by James and his agents regarding the use of funds 
received from investors were false.  Throughout nearly the entire time they were selling 
Pison securities between December 2017 and September 2022, Pison and James were 
diverting large sums of money received from investors to James for his personal use.   
139. In total, James orchestrated hundreds of transfers between Pison’s bank 
accounts and his personal accounts.  Investors were the source of those funds because Pison 
had no other significant source of income—apart from government grants and loans (that 
were supposed to be used for Pison’s business) totaling less than $2 million—during that 
time. 
140. Pison and James’s misrepresentations regarding the intended use of investor 
funds were material.  In making an investment decision, a reasonable investor would 
consider it important that—rather than use investor funds to support and grow Pison’s 
business as promised—James used a substantial portion of those investor funds from the 
sales of his Pison securities to purchase automobiles, homes, a private airplane, and luxury 
goods for his personal benefit.  Pison used the investor funds it received directly from the 
Pison Offerings 1 through 12 to make payments to James, which James in turn used to 
make personal purchases.  James also retained investor funds he received from the sale of 
his personally-held Pison securities and used them to make personal purchases. 
141. James and Pison acted with scienter.  At the time they offered and sold Pison 
securities, James and Pison, through James, knew or recklessly disregarded that the 
representations to prospective investors regarding the use of investor proceeds were false, 
misleading, and omitted material information.  They knew, or recklessly disregarded, that 
James had received, and was continuing to receive, millions of dollars of investor proceeds 
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and using those funds for his own personal benefit rather than to support and grow Pison’s 
business, as represented. 
142. In making these representations and omissions, James and Pison also acted 
negligently. 
E. James Loaned Funds to Pison, Which Prioritized Repaying Him Over Other 
Noteholders Supposedly on Equal Footing With Him 
 
143. When James received investor funds from selling his personal securities, he 
loaned some of the proceeds to Pison, which characterized the loans on its books as working 
capital advances. 
144. In December 2018, Pison issued a note to James that memorialized his 
working capital advances up to that point.  The note had a principal amount of $5.3 million 
and an annual interest rate of 10%. 
145. When Investor 2 and Investor 3 purchased their notes in Pison Offering 3, as 
more fully described in paragraphs 44 - 47 above, all notes issued by Pison to James, 
Investor 1, Investor 2, or Investor 3 were deemed to be Senior Notes.  The Senior Notes 
were all to be repaid on a pro rata basis, but had priority of repayment over borrowings Pison 
received from other sources. 
146. In or around October 2019, Pison and the holders of the Senior Notes, 
including James, amended the terms of their notes to match the interest rate offered to 
investors in Pison Offering 5 (a variable rate of 15% to 25%) and to make the Senior Notes 
subordinate to investors in that offering. 
147. In or around February 2020, Pison and the holders of the Senior Notes, 
including James, again amended the terms of their notes to make them equal in repayment 
priority to investors in Pison Offering 7. 
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148. In or around September 2020, Pison and the two remaining holders of the 
Senior Notes, James and Investor 1, again amended the terms of their notes to make them 
equal in repayment priority to investors in Pison Offering 9.  By that time, Investor 2 and 
Investor 3 no longer held any Senior Notes, because they had converted their notes into 
shares of Pison. 
149. After December 2018, James continued to make additional working capital 
advances to Pison.  Pison did not issue a new note to James, but instead tracked the 
working capital advances on a spreadsheet as loans with a 15% interest rate. 
150. Pison treated all of the working capital advances as payable to James 
whenever James requested repayment, without regard to the obligations Pison had to its 
other noteholders or creditors.  James and Pison did not disclose to investors that Pison’s 
repayment of James’s working capital advances would take precedence over payments to 
investors or creditors.  In treating James’s working capital advances as payable on demand, 
Pison and James violated the provisions of the notes purchased by the Senior Note holders 
and the purchasers of notes in Pison Offering 5, Pison Offering 7, and Pison Offering 9.  
Pison and James prioritized payments solely to James, regardless of the payment priority 
terms of other investors’ notes. 
151. Between June 2018 and May 2022, Pison made approximately 45 payments, 
totaling approximately $6.2 million, to James for repayments of his working capital 
advances.  Pison made payments to James even during periods when it was not repaying 
holders of its promissory notes and other creditors. 
152. James and Pison never disclosed that Pison would prioritize paying James’s 
working capital advances over other noteholders and creditors.   
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F. James and Pison Misused Investor Funds for James’s Personal Benefit  
153. Between December 2017 and September 2022, investors paid a total of 
approximately $32.5 million to purchase Pison securities, both from James and from the 
company.  At the direction of James and/or Pison, investors sent approximately $16.2 
million of those funds to James, and $16.3 million directly to Pison.  
154. When investors purchased securities from the company, Pison directed the 
investors to send their funds to a Pison bank account.  When investors purchased James’s 
personal securities prior to August 2018, James directed the investors to send their funds to 
a Pison bank account, and after August 2018 he  directed the investors to send their funds to 
one of his personal bank accounts.   
155. James and Pison made hundreds of transfers between James’s personal bank 
accounts and the company’s bank accounts.  James directed all of those transfers.  
156. James used some of the investor funds he received into his personal accounts 
for Pison’s benefit, both by transferring cash to the company and by making payments on its 
behalf.   
157. But at James’s direction, Pison used investor funds for James’s personal 
benefit.  Between December 2017 and July 2023, Pison made approximately $6.2 million in 
cash transfers to James.  Pison also made approximately $2.3 million in payments on behalf 
of James. 
158. James also spent investor  funds deposited into his personal bank accounts to 
make numerous personal expenditures and live a luxurious lifestyle. 
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159. In sum, James received a net personal benefit of more than $10.8 million from 
the deposits of investor funds, cash transfers back and forth between Pison’s accounts and 
James’s personal accounts, and payments James and Pison made on behalf of each another. 
160. James and Pison began diverting investor funds for James’s personal benefit 
no later than March 2018.  James and Pison continued diverting investor funds for James’s 
personal benefit throughout the duration of their fraudulent scheme. 
161. Between March 2018 and July 2023, James spent investor funds as follows 
(all numbers approximate): 
• $3.4 million to purchase, finance, maintain, and use a private jet;  
• $2 million to purchase James’s personal residence in Ohio; 
• $1.3 million in rent for a $29,000/month apartment in New York City; 
• $855,000 in personal credit card payments; 
• $850,000 in retail purchases, including $285,000 at a luxury watch retailer, 
$150,000 at an auction house, $120,000 at an art gallery, $50,000 at a jeweler, 
and $40,000 at a designer clothing company; 
• $700,000 in home renovations and expenses, including theater equipment, a 
piano, and $60,000 in aquarium and fish expenses; 
• $630,000 to purchase and maintain several automobiles from manufacturers 
including Maserati, Land Rover, BMW, Audi, and Cadillac;   
• $425,000 in personal loan and lease payments, including a lease on a Rolls-
Royce automobile; 
• $400,000 to purchase a vacation home in Florida; 
• $310,000 in cash and miscellaneous withdrawals; 
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• $250,000 in payments to family members; and 
• $225,000 in personal property taxes.  
162. Beginning in late 2021, as the flow of investor funds slowed, James had 
trouble maintaining the lavish lifestyle he had created for himself.  As a result, he sold some 
of the expensive assets he had acquired, including the private airplane and several 
automobiles. 
163. The vast majority of funds deposited into James’s personal bank accounts 
between June 2018 and July 2023 came either from Pison, from purchasers of Pison 
securities, or from the sale of assets previously purchased with investor funds. 
164. James told some investors who bought his personal securities, and the Pison 
board with respect to the November 2019 transaction, that he would retain a portion, 
typically 35%, of the investor proceeds to cover his personal tax liabilities incurred as a 
result of his securities sales.  James did not disclose to any investors that he would use their 
funds for any other personal purpose. 
165. During the entire period from June 2018 through July 2023, James paid less 
than $2.3 million in income taxes, which is far less than either the $10.8 million in investor 
funds he used for his personal benefit, or 35% of the proceeds he received for selling his 
personal securities.   
166. James and Pison acted knowingly, recklessly, or alternatively negligently, 
when they used investor funds to pay James’s personal expenses and failed to use all of 
them for the disclosed purposes of supporting Pison’s business or to pay James’s tax 
obligations arising from his sale of his personally-held Pison securities. 
 
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G. James Transferred Assets He Acquired With Investor Funds to Relief 
Defendants Genacts and Soisi  
 
167. James titled some of the assets he acquired with the proceeds of investor 
funds, such as homes, automobiles, and his personal airplane, in the names of Relief 
Defendants Genacts and Soisi.  Assets titled in Genacts’s name include, but are not limited 
to, James’s Florida home, two BMW automobiles, an Audi sport utility vehicle, and a 
Corvette.  Assets titled in Soisi’s name include, but are not limited to, James’s Ohio home, 
two Land Rover vehicles, three other sport utility vehicles manufactured by Maserati, 
Cadillac, and Lincoln, a Ford Mustang Shelby GT500, and a pickup truck. 
168. James also transferred cash to Genacts.  The cash transferred to Genacts 
consisted of investor funds or the proceeds from the sale of assets purchased with investor 
funds.  
169. Genacts and Soisi have no legitimate claim to the investor monies, or the 
assets purchased with those monies, that James transferred to Genacts and Soisi.  
COUNT I 
Fraud in the Offer or Sale of Securities 
[Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a)] 
(Against James and Pison) 
 
170. Paragraphs 1 - 169 are hereby realleged and incorporated herein by reference. 
171. By engaging in the acts and conduct described in this Complaint, Defendants 
James and Pison, directly or indirectly, in the offer or sale of securities, by use of the means 
or instruments of transportation or communication in interstate commerce or by use of the 
mails, used and employed devices, schemes, or artifices to defraud; obtained money or 
property by means of untrue statements of a material fact or an omission to state material 
facts necessary in order to make the statements made, in the light of the circumstances 
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under which they were made, not misleading; and engaged in transactions, practices, or 
courses of business which operated or would operate as a fraud and deceit upon the 
purchaser. 
172. James and Pison engaged in the fraudulent conduct described above 
knowingly or recklessly. 
173. James and Pison also acted negligently in engaging in the conduct described 
above. 
174. By reason of the foregoing, Defendants James and Pison, directly or 
indirectly, violated, and, unless enjoined, will continue to violate Section 17(a) of the 
Securities Act, 15 U.S.C. § 77q(a). 
COUNT II 
Fraud in Connection with the Purchase or Sale of Securities 
[Exchange Section 10(b), 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5] 
(Against James and Pison) 
 
175. Paragraphs 1 - 169 are hereby realleged and incorporated herein by reference. 
176. By reason of the acts and conduct described in this Complaint, Defendants 
James and Pison directly or indirectly, in connection with the purchase or sale of securities, 
by the use of means or instrumentalities of interstate commerce or of the mails or any 
facility of a national securities exchange: (a) used and employed devices, schemes, or 
artifices to defraud; (b) made untrue statements of a material fact or omitted to state 
material facts necessary in order to make the statements made, in the light of the 
circumstances under which they were made, not misleading; and (c) engaged in acts, 
practices, or courses of business which operated or would operate as a fraud and deceit upon 
any person. 
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177. James and Pison engaged in the fraudulent conduct described above 
knowingly or recklessly. 
178. By reason of the foregoing, James and Pison, directly or indirectly, violated, 
and, unless enjoined, will continue to violate Section 10(b) of the Exchange Act, 15 U.S.C. 
§ 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder. 
COUNT III 
Relief Defendants 
[Against Genacts and Soisi] 
 
179. Paragraphs 1 - 169 are hereby realleged and incorporated herein by reference. 
180. The assets obtained by Genacts and Soisi are the proceeds, or were purchased 
with the proceeds, of the securities violations committed by James and Pison as described in 
this Complaint. 
181. Genacts and Soisi have no legitimate claim to the assets they obtained as a 
result of the fraudulent scheme described in this Complaint. 
PRAYER FOR RELIEF 
 
WHEREFORE, the SEC respectfully requests that this Court: 
 
I. 
Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of Civil 
Procedure, permanently enjoining James and Pison, and their officers, agents, servants, 
employees and attorneys, and those persons in active concert or participation with any of 
them, who receive actual notice of the judgment by personal service or otherwise, and each 
of them, from: 
a. violating Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]; and 
 
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37 
 
b. violating Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 
Rule 10b- 5   thereunder [17 C.F.R. §§ 240.10b-5]. 
II. 
 Issue a judgment, in a form consistent with Rule 65(d) of the Federal Rules of Civil 
Procedures, permanently enjoining James from directly or indirectly, including, but not 
limited to, through any entity owned or controlled by him, participating in the issuance, 
purchase, offer, or sale of any security in an unregistered transaction; provided, however, 
that such injunction shall not prevent James from purchasing or selling securities listed on a 
national securities exchange for his own personal account. 
III. 
 Issue an Order prohibiting Defendant James from acting as an officer or director of 
any public company, pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. 
§ 78u(d)(2)]. 
IV. 
Order Defendants and Relief Defendants to pay disgorgement of any unjust 
enrichment they received as a result of the violations alleged herein, together with 
prejudgment interest thereon, pursuant to Sections 21(d)(3), 21(d)(5) and 21(d)(7) of the 
Exchange Act [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), 78u(d)(7)]. 
V. 
Order each Defendant to pay a civil monetary penalty pursuant to Section 20(d) of 
the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 
78u(d)(3)]. 
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VI. 
Retain jurisdiction of this action in accordance with the principles of equity and the 
Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders 
and decrees that may be entered, or to entertain any suitable application or motion for 
additional relief within the jurisdiction of this Court. 
VII. 
Grant such other and further relief as this Court may determine to be just and 
necessary. 
JURY DEMAND 
The SEC demands a trial by jury on all claims so triable.   
 
 
Dated:   May 7, 2024     
 
UNITED STATES SECURITIES 
                                                           AND EXCHANGE COMMISSION 
 
                                                      By:     /s/ Christopher H. White             
     Christopher H. White (IL Bar No. 6280031) 
     Benjamin J. Hanauer (IL Bar No. 6280156) 
     Raven A. Winters (IL Bar No. 6291077)     
       
     175 West Jackson Blvd., Suite 1450 
     Chicago, IL 60604 
      Telephone: (312) 353-7390 
     [email protected] 
 
Attorneys for the Plaintiff 
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UNITED STATES DISTRICT COURT 
NORTHERN DISTRICT OF OHIO 

EASTERN DIVISION 
__________________________________________ 
       : 
UNITED STATES SECURITIES   : 
AND EXCHANGE COMMISSION,  : 
       :    
   Plaintiff,   : 
       :    CASE NO. ___________ 
  v.     :  
       :  
PISON STREAM SOLUTIONS, INC. and : JUDGE ____________ 
JOSEPH JAMES, JR.,    : 
       : 
   Defendants, and  : JURY DEMANDED 
       : 
GENACTS LLC and SOISI LLC,   : 
       : 
   Relief Defendants.  :   
_________________________________________ :   
 

COMPLAINT 
 
  Plaintiff United States Securities and Exchange Commission (“SEC” or the 

“Commission”) alleges as follows:   

INTRODUCTION 

1. This case involves a fraudulent scheme orchestrated by Defendant Joseph 

James, Jr., to divert to himself millions of dollars from investors in a startup company he 

controlled, Defendant Pison Stream Solutions, Inc. (“Pison”).  Between at least December 

2017 and September 2022, James and Pison raised approximately $32.5 million by offering 

and selling Pison’s securities.  Investors were told those funds would be used to support 

Pison.  Despite those promises, James and Pison siphoned off more than $10.8 million of 

investor money for James’s personal benefit.  James used that money to live a luxurious 

lifestyle, buying homes, expensive cars, jewelry, art, and even a private airplane. 

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2. James directed the offer and sale of debt and equity securities on behalf of 

Pison, and he also offered and sold his personal Pison securities to investors.  In all, at least 

85 investors in 15 states purchased Pison securities, either directly from James or through 

Pison. 

3. Pison is a private chemical coatings company James founded and controlled, 

but Pison never grew beyond its start-up status.  Between 2018 and 2022, Pison only 

recognized approximately $6,800 in total revenues from selling its products and services.  

With almost no money coming in from its operations, the ultimate source of the millions of 

dollars James received was from Pison investors. 

4. James told investors that Pison was engaged in cutting-edge research and 

development and needed money to grow the company, such as by securing necessary 

inventory.  Although some investor funds were used for those disclosed purposes, 

unbeknownst to investors James took millions of dollars for his own undisclosed personal 

uses. 

5. James portrayed himself as independently wealthy, and he repeatedly told 

investors he never took a salary from Pison.  But the reality was very different.  James 

needed investor funds to live a lavish lifestyle.  James used investor funds to pay personal 

expenses, and buy, among other things, two expensive homes, luxury cars from 

manufacturers including Maserati, Audi, Cadillac, Land Rover and BMW, and fancy 

watches.  He even leased a Rolls-Royce automobile and purchased a 2005 Raytheon 

Hawker 800 XP private jet.  During the period of the fraudulent scheme James had no other 

source of income, and his wife earned a low six-figure income from her employment with a 

different company.  

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6. To help promote the illusion that Pison was a successful business, in August 

2019, James moved the company’s headquarters from Ohio to One World Trade Center in 

New York City.  He also rented an expensive Manhattan apartment for his personal use.  

7. James used two entities he created—Relief Defendants Genacts LLC 

(“Genacts”) and Soisi LLC (“Soisi”)—to hold some of the personal assets he acquired with 

investor funds.   

8. The SEC brings this lawsuit to hold James and Pison responsible for their 

fraud, prevent them from harming future investors, and return money to their victims. 

JURISDICTION AND VENUE 

9. The SEC brings this action pursuant to Section 20(b) of the Securities Act of 

1933 (“Securities Act”) [15 U.S.C. § 77t(b)], and Sections 21(d) and 21(e) of the Securities 

Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78u(d) and 78u(e)]. 

10. This Court has jurisdiction over this action pursuant to Section 22 of the 

Securities Act [15 U.S.C. § 77v] and Section 27 of the Exchange Act [15 U.S.C. § 78aa]. 

11. Venue is proper in this Court pursuant to Section 27 of the Exchange Act [15 

U.S.C. § 78aa]. The acts, practices and courses of business constituting the violations 

alleged herein have occurred within the jurisdiction of the United States District Court for 

the Northern District of Ohio and elsewhere. 

12. James and Pison (collectively, “Defendants”) each reside and transact 

business within the Northern District of Ohio. 

13. Defendants directly and indirectly made use of the means and 

instrumentalities of interstate commerce and of the mails in connection with the acts, 

practices, and courses of business alleged herein, and will continue to do so unless enjoined. 

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DEFENDANTS 

14. Joseph James, Jr., age 58, is a resident of Bratenahl, Ohio.  During the 

relevant time period, James also maintained residences in the States of Florida, Tennessee, 

and New York.  James has served as Pison’s CEO since he formed the company.  James has 

also served as the Chairman of Pison’s Board of Directors since the inception of the board.  

Before founding Pison, James worked as a chemist for various companies.  

15. Pison Stream Solutions, Inc. is a Delaware corporation with its most recent 

principal place of business in Broadview Heights, Ohio.  Pison engages in researching and 

developing products in the chemical coatings industry.  James formed Pison as Pison 

Stream Solutions, LLC in Tennessee in or around 2011.  In August 2018, James directed the 

conversion of Pison Stream Solutions LLC to a Delaware corporation, and it became 

known as Pison Stream Solutions, Inc. 

16. In the course of the SEC’s investigation that preceded this lawsuit, James and 

Pison executed tolling agreements that suspend any applicable statutes of limitations for the 

period November 17, 2022 through May 20, 2024. 

RELIEF DEFENDANTS 

17. Genacts LLC is a Florida for-profit limited liability company formed by 

James in or about February 2019.  James has been its sole member since March 2019. 

18. Soisi LLC is an Ohio for-profit limited liability company formed by James in 

or about March 2018.  James is and has been its sole member. 

 

 

 

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FACTS 

A. Pison’s Business and Finances 

19. James has been Pison’s CEO since he formed Pison Stream Solutions LLC, 

the predecessor to Pison.  Since 2011, James has presented Pison as engaging in cutting-

edge research and development of chemical coatings for niche markets, such as defense, 

aerospace, and automotive applications. 

20. In 2018, after James converted the predecessor LLC into a corporation, he 

gave Pison the trappings of corporate governance.  James created a board of directors (the 

“board”), made himself Chairman, and invited several early investors and also outsiders to 

sit on the board.  At James’s direction, Pison also hired a CFO and other employees. 

21. Since 2011, Pison has never been profitable.  Between 2018 and 2022, Pison 

recognized only approximately $6,800 in total revenues. 

22. Unable to fund operations from the sale of its chemical products or services, 

Pison’s primary source of cash flow was money raised from investors.  Between December 

2017 and September 2022, investors purchased approximately $32.5 million of Pison 

securities in multiple offerings.  Some of those securities were purchased directly from 

Pison, which made a series of offerings of both debt and equity securities.  In other 

instances, James offered and sold his personally-held Pison securities to investors, while 

representing to those investors that he would direct the proceeds of the sales to Pison. 

23. Pison did not differentiate in its use of funds between cash it received from 

investors in the Pison offerings and cash it received when James directed funds to Pison 

after he sold personally-held securities to investors.  Pison used both sources of cash 

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interchangeably.  Pison used investor funds to pay certain operating expenses, and also to 

make payments to James. 

24. At all times, James maintained voting and operational control of Pison.  As 

CEO, James had the power to bind Pison to most corporate actions during the entire time 

from December 2017 until September 2022.  During that same period, James had at least 

joint control of all of Pison’s bank accounts.  James controlled how Pison spent money, and 

all withdrawals from its accounts required his approval. 

25. As more fully described below, Pison and James raised money from investors 

through a series of securities offerings beginning in December 2017.  In that period, Pison 

conducted twelve offerings and filed with the Commission seven Notices of Exempt 

Offering of Securities on Form D under the Securities Act.  In addition, James offered and 

sold his own Pison securities to investors.   

26. The securities offerings and sales were documented with varying degrees of 

formality and detail.  In some instances, the offering documents exceeded one hundred 

pages and contained detailed information about Pison’s business, governance, and finances.  

Other offerings and sales transactions were documented with shorter and less detailed 

purchase agreements.  Still other transactions were documented, if at all, with simple 

agreements confirming little more than the purchase price and the number and type of 

securities being sold. 

27. James communicated directly with prospective investors, either orally or by 

email.  In other instances, agents communicated with prospective investors on behalf of 

James and Pison and acting at their direction.  The agents who assisted James and Pison in 

finding investors or raising funds from existing investors were, themselves, investors.  Some 

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of the agents served on Pison’s board and/or performed work for Pison in some capacity, 

without pay.  

28. As part of James’s efforts to portray Pison as a successful business, in August 

2019 he moved the company’s headquarters from Ohio to One World Trade Center in New 

York City.  James also used investor funds to purchase luxury cars, watches, and other 

items for himself to create the false appearance that he was independently wealthy.  

Meanwhile, James repeatedly told investors he took no salary from Pison, while failing to 

disclose that his lavish lifestyle was funded almost entirely with investor funds. 

29. In reality, Pison always had problems with cash flow.  As time went on, it 

struggled to pay rent and its employees.  It was evicted from its Ohio offices and production 

facility in October 2021 and its One World Trade Center office in April 2023 after it failed 

to make required lease payments.  But despite these cash flow struggles, Pison continued to 

prioritize payments to James, which he used for his personal expenses, at the expense of 

investors and other creditors, as more fully detailed below. 

B. Pison’s Offer and Sale of Securities 

30. Between December 2017 and November 2021, Pison raised approximately 

$10.3 million through a total of 12 offerings of either debt or equity securities.  Each offering 

is discussed in detail in paragraphs 35 - 99 below, and each offering involved “securities,” as 

that term is defined in the Securities Act and the Exchange Act. 

31. The offering documents given to prospective and/or current investors 

identified various uses for the investor funds raised, including purchasing raw materials, 

increasing working capital, research and development, and paying various operating and 

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financing costs.  None of the offering documents disclosed that a significant portion of the 

funds raised would be used by James to pay personal expenses. 

32. When Pison needed more money, James informed Pison’s board. The board 

approved the offerings, but did not track the investor funds Pison raised or received.  The 

board also did not track how Pison or James were using the proceeds of the various 

offerings. 

33. James typically drafted the communications Pison sent to prospective 

investors and provided Pison’s agents with the information they communicated to 

prospective investors.  James or others from Pison typically had oral discussions with 

prospective investors before they invested.  In those discussions, James and others, at 

James’s direction, told prospective investors about Pison’s need for new investor funding to 

pay operating or other business expenses.  James, and others acting at James’s direction, 

never disclosed in those discussions that a substantial portion of the money received from 

investors would be used to pay James’s own personal expenses, a fact that was known to 

James but not others offering Pison securities to investors. 

34. James began using investor funds for his own personal benefit no later than 

March 2018, when Pison wired over $2 million to a title company to purchase a house for 

James.  After March 2018, James and Pison made additional offerings and sales of securities 

without disclosing to investors that James had already begun misusing investor funds.  By 

continuing to offer and sell securities after James had begun using investor funds for his own 

personal purposes but without disclosing that misuse to investors, Pison and James made 

false and misleading statements to investors regarding the use of their funds.    

   

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a. December 2017-September 2018 Debt Offering (“Pison Offering 1”) 

35. Between December 2017 and September 2018, an investor (“Investor 1”) 

purchased a series of six promissory notes, totaling $730,000, from Pison.  Each note had a 

10% interest rate and an initial term of 90 days, which could be extended for an additional 

90 days.  James executed the first five notes as president of Pison Stream Solutions LLC, 

and the sixth note as president of Pison. 

36. Pison did not repay any of the notes at maturity.  At James’s request, Investor 

1 agreed to extend each of the notes due to Pison’s lack of available funds.   

37. In October 2019, Pison and Investor 1 agreed to consolidate all of the 

outstanding amounts into an Amended and Restated Convertible Promissory Note.  The 

Amended and Restated Convertible Promissory Note stated that the funds would “be used 

for the immediate working capital needs of the Company,” except that “organizational, 

legal, accounting, and filing fees payable in connection with this Offering may be paid for by 

the proceeds raised through this Offering.” 

38. The Amended and Restated Convertible Promissory Note also stated: “The 

net proceeds from this Offering may be used to cover the expenses associated with this 

Offering and for working capital purposes of the Company.” 

b. February 2019 – June 2019 Equity Offering (“Pison Offering 2”) 

39.  Between February and June 2019, Pison sold $1,025,000 of equity securities 

to several investors.  James and others at Pison acting at James’s direction told investors 

those funds would be used to benefit the company.   

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40. In an email dated February 1, 2019, a Pison board member (“Board Member 

1”) wrote to several prospective investors, telling them that “we need some additional 

capital for raw materials over the next two weeks.” 

41. In an email dated May 8, 2019, Pison’s CFO wrote to a group of existing 

investors, saying the company was seeking to raise $2.5 million.  The CFO’s email stated: 

“The proceeds will be used to fund fees required to complete the QPD [Qualified Products 

Database of the Department of Defense] application process, purchase additional raw 

materials and fund working capital requirements . . . .” 

42. In an email to existing investors dated June 13, 2019, on which James was 

copied, Pison’s Vice President of Corporate Business Development (“Vice President 1”) 

wrote that the company had an “immediate need to purchase additional raw materials as we 

continue to build finished goods inventory.”  Vice President 1’s email offered investors the 

opportunity to purchase additional shares of Pison.  Attached to Vice President 1’s email 

were two emails from James stating that Pison had been accepted into the QPD system, and 

would need to increase its working capital to be able to fulfill large volume orders for the 

United States military. 

43. James and the other Pison executives did not disclose to investors their 

money would ultimately be used to pay for James’s personal expenditures and lifestyle.  

c. March-April 2019 Debt Offering (“Pison Offering 3”) 

44. In March and April 2019, Pison sold additional promissory notes to two 

investors (“Investor 2” and “Investor 3”).  The total face value of the promissory notes was 

$1.5 million.  The notes paid interest at an annual rate of 10%, and the notes were due to be 

repaid on December 31, 2019.   

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45. The notes provided that all current or future promissory notes issued by Pison 

to James, Investor 1, Investor 2, or Investor 3 would be deemed “Senior Notes” that would 

all be paid on a pro rata basis, and would have priority of repayment over loans Pison 

received from any other source.   

46. In October 2019, Pison made another offering of promissory notes on more 

favorable terms for investors than notes previously issued to Investor 1, Investor 2 and 

Investor 3.  Pison agreed to issue new notes to Investor 1, Investor 2 and Investor 3 that 

matched the terms of the new offering.  Thus, in October 2019, Pison consolidated all of the 

outstanding amounts owed to Investor 2 and Investor 3 into Amended and Restated 

Convertible Promissory Notes that were identical in form to the Amended and Restated 

Convertible Promissory Note with Investor 1.    

47. The Amended and Restated Convertible Promissory Notes stated that 

investor funds would “be used for the immediate working capital needs of the Company,” 

except that “organizational, legal, accounting, and filing fees payable in connection with 

this Offering may be paid for by the proceeds raised through this Offering.”  Again, James 

and Pison failed to disclose to Investors 2 and 3 that their money would ultimately be used 

to pay for James’s personal expenditures and lifestyle. 

d. July 2019 Equity Offering (“Pison Offering 4”) 

48. On July 6, 2019, Vice President 1 emailed prospective investors to offer 

between $2 million and $3.5 million in additional Pison equity securities.  Vice President 1’s 

email, on which James was copied, said the offering was “an effort to fund immediate 

access to cash to be used primarily to purchase raw materials to produce CARC . . . .”  

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CARC, which stands for Chemical Agent Resistant Coating, is a specialized type of paint 

used primarily on military vehicles. 

49. Several documents were attached to Vice President 1’s email.  One of those 

documents was an Offering Term Sheet.  The introductory paragraph of the Offering Term 

Sheet stated that the offering was “for the purpose of raising money to facilitate satisfying 

orders from customers subsequent to the inclusion of Pison in the U.S. Army’s Qualified 

Productions Database (‘QPD’), and to pay off a portion of existing debt.” 

50. Next to the heading “Use of Proceeds”, the Offering Term Sheet stated: “The 

net proceeds from this Offering may be used to cover the expenses associated with this 

Offering and for the purposes described in the introductory paragraph of this Term Sheet.” 

51. Pison filed a Form D with the Commission on July 22, 2019 in connection 

with Pison Offering 4.  The Form D stated that $700,000 of the offering proceeds would be 

used to reimburse officers, directors, or promoters for advances to fund working capital 

needs.  That information was contained only in the Form D, and not in the offering 

materials that were distributed to investors.  James signed the Form D. 

52. Several investors purchased equity securities, and the offering resulted in 

Pison raising $3,015,294.  Neither James nor Pison disclosed to the investors their money 

would ultimately be used to pay for James’s personal expenditures and lifestyle, or that 

Pison would prioritize payments to James over other investors or creditors.  

e. October 2019-December 2019 Debt Offering (“Pison Offering 5”) 

53. In an email to prospective investors dated October 21, 2019 and transmitted 

through his executive assistant, James stated that the Pison board had authorized an 

offering of convertible promissory notes, as well as the exchange of the existing promissory 

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notes with himself, Investor 1, Investor 2, and Investor 3 into amended and restated 

convertible notes. 

54. As part of the offering, James provided prospective investors, including 

Investor 1, Investor 2, and Investor 3, with an Offering Term Sheet.  The introductory 

paragraph of the Offering Term Sheet stated the offering was made “for the purpose of 

raising capital to be used for the immediate working capital needs of the Company.” 

55. Next to the heading “Use of Proceeds”, the Offering Term Sheet stated: “The 

net proceeds from this Offering may be used to cover the expenses associated with this 

Offering and for the purposes described in the introductory paragraph of this Term Sheet.” 

56. On October 22, 2019, Pison sold a note to Investor 1 for $100,000.  The note 

was due in 240 days, with interest payable at a rate of 15% for the first 120 days and 25% for 

the second 120 days.  Investor 1 had the option to convert the outstanding debt into Pison 

shares in a contemplated subsequent equity offering.   

57. The October 2019 note stated that there were approximately $8.3 million in 

Senior Notes outstanding as of August 31, 2019 that had a right to be repaid first before any 

other lending source.  But the October 2019 note further stated that the Senior Notes would 

be amended before the closing of the current offering so as to make their repayment 

subordinate in terms of priority to all October 2019 notes. 

58. Investor 2 and Investor 3 each purchased a $150,000 convertible promissory 

note, and Pison received their funds on December 30, 2019. 

59. After Investor 3 inquired about the terms of the notes he purchased, James 

confirmed in an email to Investor 2 and Investor 3 that their notes were on the same terms 

as the October 2019 convertible promissory note offering. 

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60. Pison filed a Form D with the Commission on November 5, 2019 in 

connection with Pison Offering 5.  James signed the Form D. 

61. During Pison Offering 5, James and Pison never told investors James would 

use their money for personal expenditures or prioritize Pison’s payments to James over 

other investors or creditors.  

f. January 2020 Debt Offering (“Pison Offering 6”) 

62. Pison’s CFO sent an email to prospective investors, all of whom were existing 

Pison shareholders, dated January 9, 2020.  In that email, on which James was copied, the 

CFO stated that, in anticipation of Pison being approved to have products listed in the 

military’s QPD, “[i]t is important that the company has sufficient funding to maintain 

inventory levels to meet anticipated demands and for working capital.” 

63. The CFO’s email went on to state that Pison would soon conduct an equity 

offering.  “In the interim, additional funding is required for inventory purchases and 

working capital.  Pison must have sufficient finished goods available to fill customer orders 

within 10 days of receipt.” 

64. To meet those interim funding needs, the CFO’s email asked the shareholders 

to purchase new debt securities.  The CFO’s email added, “Joe James has committed to a 

$50,000 investment to kick start this process and is requesting that you participate in this 

effort.” 

65. The following day, January 10, 2020, the CFO emailed a package of offering 

documents to the shareholders.  James was copied on the email.  One of the documents was 

an Offering Term Sheet.  The introductory paragraph to the Offering Term Sheet stated the 

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offering was conducted “for the purpose of raising capital to be used for the immediate 

working capital needs of the Company, including the purchase of raw materials.” 

66. Next to the heading “Use of Proceeds”, the Offering Term Sheet stated: “The 

net proceeds from this Offering may be used to cover the expenses associated with this 

Offering and for working capital purposes of the Company.”  None of the materials sent to 

investors disclosed James would use their money for personal uses. 

67. Several investors purchased promissory notes, collectively totaling $133,000, 

in the January 2020 offering.  The promissory notes were due on December 31, 2020 and 

paid interest at a rate of 15% annually.   

g. February 2020 Debt Offering (“Pison Offering 7”) 

68. Pison conducted another debt offering in February 2020.  The promissory 

notes it offered were due on June 15, 2020 and paid interest at a rate of 15% annually. 

69. Pison provided prospective investors with an offering package consisting of 

several documents.  One of the documents provided to prospective investors was an 

Offering Term Sheet. The introductory paragraph to the Offering Term Sheet stated the 

offering was conducted “for the purpose of raising capital to be used for the immediate 

operating and working capital needs of the Company.” 

70. Next to the heading “Use of Proceeds”, the Offering Term Sheet stated: “The 

net proceeds from this Offering may be used to cover the expenses associated with this 

Offering and for operating and working capital purposes of the Company.” 

71. The promissory note stated that there were approximately $4.85 million in 

Senior Notes outstanding, and that the holders of those notes were entitled to be paid first, 

before any other unsecured notes of the company.  The promissory notes represented that, 

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before executing the notes, Pison shall have obtained the agreement of each Senior Note 

holder “that the priority of payment between the holders of the February 2020 Notes shall 

be equal to the priority of payment of the Senior Notes.” 

72. Pison filed a Form D with the Commission on February 8, 2020 in 

connection with Pison Offering 7.  James signed the Form D. 

73. Several investors purchased promissory notes, collectively totaling 

$2,070,000, in Pison Offering 7.  None were told their money would be used by James for 

personal purchases, or that Pison would prioritize payments to James over other investors 

or creditors.   

h. July 2020 Equity Offering (“Pison Offering 8”) 

74. On July 27, 2020, James wrote an email, which he transmitted to existing 

Pison investors through his executive assistant, in which he discussed a contemplated $5 

million offering of Pison’s shares.  James’s email stated: “Proceeds from the offering would 

be used to purchase active ingredients and other raw materials and produce finished goods 

and for working capital, including funding to support efforts to secure ‘EPA’ approval for 

our antimicrobial product – this product will be sold as a Super Durable Cleaner until a 

EPA registration is available to us.” 

75. James’s email invited interested investors to request a Private Placement 

Memorandum (“PPM”) with additional information about the terms of the offering.  Some 

Pison shareholders expressed interest, and Pison provided the PPM to those investors. 

76. The PPM contained a summary section titled “Key Terms of the Offering and 

the Class A Voting Common Stock.”  In that section, next to the heading “Use of 

Proceeds”, the PPM stated the funds raised in the offering would be used: 

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(a) to acquire raw materials to make sufficient inventory to meet customer’s needs; 
(b) to continue to create and protect the intellectual property and research and 
development of the Company; (c) to fund the sale, marketing and promotion of the 
Company’s services to its potential customers; (d) to provide working capital to fund 
expenses related to general operations and administration of the Company and (e) to 
pay off existing debt, as needed, including, potentially, amounts outstanding under 
the Convertible Notes. The Company may, in its sole discretion, decide to allocate 
the net Offering proceeds to different working capital categories and in any 
proportion it deems reasonable or utilize them for other reasons. 
 
77. The PPM contained a section titled “Remuneration of Directors and 

Executive Officers.”  That section stated that directors were not compensated for their 

services and executive officers had received no salary.  The section further stated: 

“Executive officers have elected to defer going onto the Company’s payroll in order to 

maximize the available cash to fund the Company’s available cash resources.”   

78. One investor purchased shares in the offering for $100,000.  That investor was 

never told that Pison would prioritize paying James over other investors and creditors.  

i. September 2020 Debt Offering (“Pison Offering 9”) 

79. Pison conducted another debt offering in September 2020.  The promissory 

notes it offered were due on October 1, 2021 and paid interest at a rate of 15% annually. 

80. Pison provided prospective investors with an offering package consisting of 

several documents.  One of the documents provided to prospective investors was an 

Offering Term Sheet. The introductory paragraph to the Offering Term Sheet stated the 

offering was conducted “for the purpose of raising capital to be used for the immediate 

operating and working capital needs of the Company.” 

81. Next to the heading “Use of Proceeds”, the Offering Term Sheet stated: “The 

net proceeds from this Offering may be used to cover the expenses associated with this 

Offering and for operating and working capital purposes of the Company.” 

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82. Pison filed a Form D with the Commission on October 8, 2020 in connection 

with Pison Offering 9.  James signed the Form D. 

83. Several investors purchased promissory notes, collectively totaling $670,000, 

in Pison Offering 9.  None of these investors were told their money would ultimately be 

used to support James’s personal purchases and lifestyle.  

    j.   March 2021 Debt Offering (“Pison Offering 10”) 

84. Pison conducted another debt offering in March 2021.  The promissory notes 

it offered were due on June 30, 2021 and paid interest at a rate of 15% annually. 

85. Pison provided prospective investors with an offering package consisting of 

several documents.  One of the documents provided to prospective investors was an 

Offering Term Sheet. The introductory paragraph to the Offering Term Sheet stated the 

offering was conducted “for the purpose of raising capital to be used for the immediate 

working capital needs of the Company, including the purchase of raw materials.” 

86. Next to the heading “Use of Proceeds”, the Offering Term Sheet stated: “The 

net proceeds from this Offering may be used to cover the expenses associated with this 

Offering and for working capital purposes of the Company.” 

87. Pison filed a Form D with the Commission on April 14, 2021 in connection 

with Pison Offering 10.  James signed the Form D. 

88. Several investors purchased promissory notes, collectively totaling $125,000, 

in Pison Offering 10, without being told their money would ultimately be used for James’s 

personal benefit.   

 

 

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    k.   June 2021 Debt Offering (“Pison Offering 11”) 

89. Pison conducted another debt offering in June 2021.  The promissory notes it 

offered were due 12 months after issuance and paid interest at a rate of 25% annually. 

90. Pison provided prospective investors with an offering package consisting of 

several documents.  One of the documents provided to prospective investors was an 

Offering Term Sheet. The introductory paragraph to the Offering Term Sheet stated the 

offering was conducted “for the purpose of raising capital to be used for the immediate 

working capital needs of the Company, including the purchase of raw materials.” 

91. Next to the heading “Use of Proceeds”, the Offering Term Sheet stated: “The 

net proceeds from this Offering may be used to cover the expenses associated with this 

Offering and for working capital purposes of the Company, including payment of certain 

legal fees, back utilities and back rent to the landlord of the Company’s Brecksville, Ohio 

facilities.” 

92. Pison filed a Form D with the Commission on July 6, 2021 in connection 

with Pison Offering 11.  James signed the Form D. 

93. Several investors purchased promissory notes, collectively totaling $418,905, 

in Pison Offering 11, again without being told their money would go to James.   

l. October 2021 Equity Offering (“Pison Offering 12”) 

94. On October 28, 2021, James wrote an email, which he transmitted to existing 

Pison investors, in which he discussed a contemplated $3 million offering of Pison’s shares.  

Attached to James’s email was a PPM for an offering of Pison’s shares, as well as a 

presentation about Pison’s business. 

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95. The PPM contained a summary section titled “Key Terms of the Offering and 

the Class A Voting Common Stock.”  In that section, next to the heading “Use of 

Proceeds”, the PPM stated the funds raised in the offering would be used: 

(a) to acquire raw materials to make sufficient inventory to meet customer’s needs; 
(b) to continue to create and protect the intellectual property and research and 
development of the Company; (c) to fund the sale, marketing and promotion of the 
Company’s services to its potential customers; (d) to provide working capital to fund 
expenses related to general operations and administration of the Company and (e) to 
pay off existing debt, as needed, including, potentially, amounts outstanding under 
the Convertible Notes. The Company may, in its sole discretion, decide to allocate 
the net Offering proceeds to different working capital categories and in any 
proportion it deems reasonable or utilize them for other reasons. 
 
96. The PPM contained a section titled “Remuneration of Directors and 

Executive Officers.”  That section stated that directors were not compensated for their 

services and executive officers had received no salary.  The section further stated: 

“Executive officers have elected to defer going onto the Company’s payroll in order to 

maximize the available cash to fund the Company’s available cash o [sic].”   

97. The PPM contained a section titled Use of Proceeds.  That section stated that 

the proceeds of the offering would be used for “working capital to fund expenses related to 

general operations and administration of the Company (consists primarily of employee 

compensation, insurance, regulatory and legal fees, facilities and related costs and 

outstanding accounts payable[)].” 

98. Pison filed a Form D with the Commission on November 29, 2021 in 

connection with Pison Offering 12.  James signed the Form D.   

99. Two investors purchased shares in the offering, collectively totaling $130,000, 

without being told Pison would use the money to prioritize payments to James over 

investors and other creditors.  

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C. James’s Offer and Sale of Personally-Held Pison Securities 

100. Between at least December 2017 and September 2022, James offered and sold 

his personally-held Pison securities and raised approximately $22.2 million from investors.  

James found prospective investors through referrals from family, friends, employees, or 

sought additional investments from existing investors. 

101. Pison Stream Solutions LLC changed its corporate form in August 2018, and 

converted its membership interests into shares of Pison stock.  Thereafter, the securities 

James sold to investors were his personal Pison shares.  James sometimes documented sale 

of his shares with a share purchase agreement.   

102. In oral communications, James told investors he was selling his personal 

securities to raise funds for Pison either because Pison needed money in short order to 

secure necessary inventory, purchase raw materials, or satisfy other immediate obligations, 

and/or to avoid diluting existing shareholders’ holdings through issuance of additional 

equity securities of Pison. 

103. James told investors he would direct or loan the proceeds of the sales to Pison 

for the company’s use.  James told certain investors he would retain approximately 35% of 

the proceeds to cover tax liabilities he incurred on the transactions.  James failed to tell 

investors that he would use a substantial portion of the proceeds to fund his own personal 

lifestyle.  In reality, James never paid anywhere close to 35% of his personal sales proceeds 

for income taxes, and instead spent investor money on lavish purchases and expenditures. 

a. December 2017 – January 2018 

104. In December 2017 and January 2018, James made two sales of his own 

membership interests in Pison Stream Solutions, LLC to Investor 1. 

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105. Before the sales, James explained to Investor 1 that he was selling his own 

equity securities but that he would put the money back into Pison. 

106. Investor 1 paid $50,000 to James for each purchase, for a total of $100,000. 

107. Each of those sales was documented with a written consent of the members of 

Pison Stream Solutions, LLC.  James signed both consents on behalf of the company.  Each 

of the consents stated that James was transferring 1% of his membership interests to 

Investor 1.   

    b. February 2018 – November 2018  

108. Beginning in February 2018, James and his agents, acting at James’s 

direction, approached several prospective investors and told them Pison needed money.  

James or his agents, at James’s direction, told the prospective investors their funds would be 

used to support Pison.  In some instances, James or his agents told prospective investors he 

would retain a portion of the investor funds to cover capital gains tax liabilities he would 

incur on the sales.  But neither James nor his agents, who were unaware of how James 

would spend the money, told prospective investors that James would use invested funds to 

pay any other personal expenses.   

109. Approximately five investors purchased securities from James between 

February 12, 2018 and November 14, 2018.  Collectively, those investors paid $12,673,428 

for those securities.  

c. September 2019 

110. In September 2019, James approached Investor 2 and Investor 3 to offer them 

additional Pison securities from his personal holdings. 

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111. James told Investor 2 and Investor 3 that the money they invested would go 

to support Pison. 

112. On or about September 9, 2019, Investor 2 and Investor 3 each purchased 

$500,000 of Pison securities, for a collective total of $1 million, from James. 

d. November 2019 

113. In late October and early November 2019, James offered additional Pison 

securities he owned to prospective investors from his personal holdings. 

114. On November 5, 2019, James entered into a Share Purchase Agreement with 

a group of approximately ten investors who agreed to purchase from James a collective total 

of 8.125% of Pison’s outstanding securities for $1,625,000. 

115. The Share Purchase Agreement contained a section titled Representations 

and Warranties made by James.  One of the warranties James made was “that at least 65% 

of the proceeds from the sale of the Shares will be loaned back into Pison, on terms similar 

in nature to previous lending agreements with Joseph James. . . .” 

116. In accordance with the Share Purchase Agreement, the investors collectively 

paid $1,625,000 to James for his Pison securities. 

e. January 2020 – December 2020 

117. Between January 2020 and December 2020, James sold additional shares of 

his Pison stock to approximately 25 investors. 

118. Before those investors agreed to invest, James made oral representations to 

them that the funds they provided to him would be used for the benefit of the company. 

119. Some of the share purchase agreements used during this time period included 

an addendum signed by James.  The addendum, which was dated May 13, 2020, stated: 

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“Joseph James, CEO, President and Founder of the Company has agreed, that the proceeds 

from this issuance, will be used to support the needs of the company going forward in the 

form of loans with interest rate set and approved by the Board of Directors of Company.”  

120. Investors paid James a total of $4,569,822 during this time period to purchase 

Pison securities from him. 

f. January 2021 – December 2021 

121. Between January 2021 and December 2021, James sold additional shares of 

Pison stock to approximately 23 investors. 

122. Before those investors agreed to invest, James made oral representations to 

them that the funds they provided to him would be used for the benefit of the company. 

123. Some of the share purchase agreements used during this time period included 

an addendum signed by James.  This addendum, which was dated August 13, 2021, differed 

somewhat from the May 13, 2020 addendum.  The August 13, 2021 addendum stated: 

“Joseph James, CEO, President and Founder of the Company has agreed, that the proceeds 

from the Share Sales, will be used to support the needs of the company going forward in the 

form of loans with interest rate set and approved by the Board of Directors of Company.”  

James further agreed that loan proceeds “will be used exclusively for salaries and rent 

expense of the Company, or to pay down existing liabilities relating to the same.”   

124. The addendum also stated that James was entitled to retain “such portion of 

the Share Sale proceeds that is reasonably deemed to represent Mr. James’s capital gains tax 

liability in connection with the Share Sale.”  Neither the share purchase agreement nor the 

addendum provided that James would retain investor funds for any other reason.  

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125. In total, investors paid James a total of $2,099,548 during this time period to 

purchase Pison securities from him. 

g. January 2022 – November 2022 

126. Between January and November 2022, James sold equity securities to one 

additional investor for $150,000.  

D. Pison and James Made Oral and Written Misrepresentations to Investors 

127. In addition to statements in the offering documents and purchase agreements 

discussed above in paragraphs 30 - 125, James, and others from Pison acting at his 

direction, made numerous oral and written representations to prospective investors.  James 

and his agents—including Board Member 1, Vice President 1, Investor 1’s father, Investor 4, 

Investor 5, and Investor 6—repeatedly represented in oral communications during the 

period from December 2017 to September 2022 that investors’ money would be used to 

support Pison’s business operations.  Neither James nor anyone else from Pison, who were 

unaware of how James spent investor money, told investors James would use their money 

to fund his personal purchases and support his extravagant lifestyle. 

128. On some occasions, James or his agents told investors he would retain a 

portion of the proceeds from the sale of his personal securities to cover tax liabilities he 

incurred in connection with the sale.  James and his agents, who were unaware of how 

James spent investor money or the amount of taxes he incurred, did not disclose to 

prospective investors that he would retain funds for any other personal use or that James 

would pay taxes in amounts far less than the amount of investor money he retained for 

purported tax purposes. 

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129. In addition to oral representations, James and his agents also represented in 

written communications that funds raised would be used for the benefit of Pison, and not for 

the personal benefit of James. 

130. For example, in or around November 2019, James engaged in discussions to 

sell his personal securities to a group of investors, including people who were not current 

Pison shareholders.  The sale required authorization from Pison’s board.  James told the 

board members that he would loan 65% of the proceeds of the sales to Pison, while retaining 

the remaining 35% to pay capital gains taxes he incurred on the sales.  Based on the 

representations made by James, the board authorized the sale of James’s securities. 

131. One of the investors to whom James offered some of his personal securities in 

November 2019 was Investor 4.  After agreeing to invest, Investor 4 asked James if Pison 

still needed more funds and offered to contact a few of his friends to see if they would be 

interested in purchasing securities from James.  After James agreed, Investor 4 located some 

additional people who were willing to invest. 

132. In a text message dated November 4, 2019, Investor 4 told James that all of 

the prospective investors he identified would need assurances that the money, less any tax 

liabilities, would be going to Pison.  Later that day, James responded to Investor 4 with a 

text message stating “The monies being raised are definitely going into the business less 

taxes etc.”   

133. In another example, on May 10, 2020, Vice President 1 sent a text message to 

James saying he had located a potential investor interested in purchasing James’s personal 

securities.  But Vice President 1 requested that, to facilitate the sale, James provide a 

document confirming the “proceeds of which will go to support Pison efforts.”   

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134. Less than an hour later, James responded to Vice President 1’s request with a 

series of text messages.  First, James stated: “Btw I am sure you know I will be using the 

money to help fund the company.  The other two guys said they didn’t need those 

restrictions because they know that I will be using the funds because I have since day one.”  

Then, James added: “Of course I have to pay taxes out of etc.”  James’s response concluded 

by stating: “Just know [Vice President 1], funds will be used for company expenses raw 

materials as in the past etc.”   

135. Another time, on July 28, 2020, two prospective investors sent Investor 4 an 

email expressing interest in purchasing Pison securities from James, but posing several 

questions about the company.  One of their questions was whether the capital being raised 

would go to the company.  Investor 4 responded by saying James “commits to putting 

minimum 70% into co. 30% usually reserved for taxes.”  Investor 4 also confirmed that 

capital had been used the same way in previous sales and that there would be a 

representation and warranty to that effect in the share purchase agreement.   

136. In yet another example, on November 17, 2020, Vice President 1 sent a text 

message to James saying there were a few potential investors interested in purchasing 

securities.  Vice President 1 posed several questions to James: “How much do you need?  

What is the specific use of proceeds?  Can [CFO] show a 60 day cash flow with projected 

revenues and expenses?”   

137. Twelve minutes later, James responded with a text message: “[Vice President 

1] we are behind on bills payroll utilities general things remember our cash burn is 600k and 

we only been bringing in minimums over the last two months to cover payroll so we are 

behind we need to pay insurance etc.”   

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138. The representations made by James and his agents regarding the use of funds 

received from investors were false.  Throughout nearly the entire time they were selling 

Pison securities between December 2017 and September 2022, Pison and James were 

diverting large sums of money received from investors to James for his personal use.   

139. In total, James orchestrated hundreds of transfers between Pison’s bank 

accounts and his personal accounts.  Investors were the source of those funds because Pison 

had no other significant source of income—apart from government grants and loans (that 

were supposed to be used for Pison’s business) totaling less than $2 million—during that 

time. 

140. Pison and James’s misrepresentations regarding the intended use of investor 

funds were material.  In making an investment decision, a reasonable investor would 

consider it important that—rather than use investor funds to support and grow Pison’s 

business as promised—James used a substantial portion of those investor funds from the 

sales of his Pison securities to purchase automobiles, homes, a private airplane, and luxury 

goods for his personal benefit.  Pison used the investor funds it received directly from the 

Pison Offerings 1 through 12 to make payments to James, which James in turn used to 

make personal purchases.  James also retained investor funds he received from the sale of 

his personally-held Pison securities and used them to make personal purchases. 

141. James and Pison acted with scienter.  At the time they offered and sold Pison 

securities, James and Pison, through James, knew or recklessly disregarded that the 

representations to prospective investors regarding the use of investor proceeds were false, 

misleading, and omitted material information.  They knew, or recklessly disregarded, that 

James had received, and was continuing to receive, millions of dollars of investor proceeds 

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and using those funds for his own personal benefit rather than to support and grow Pison’s 

business, as represented. 

142. In making these representations and omissions, James and Pison also acted 

negligently. 

E. James Loaned Funds to Pison, Which Prioritized Repaying Him Over Other 
Noteholders Supposedly on Equal Footing With Him 
 

143. When James received investor funds from selling his personal securities, he 

loaned some of the proceeds to Pison, which characterized the loans on its books as working 

capital advances. 

144. In December 2018, Pison issued a note to James that memorialized his 

working capital advances up to that point.  The note had a principal amount of $5.3 million 

and an annual interest rate of 10%. 

145. When Investor 2 and Investor 3 purchased their notes in Pison Offering 3, as 

more fully described in paragraphs 44 - 47 above, all notes issued by Pison to James, 

Investor 1, Investor 2, or Investor 3 were deemed to be Senior Notes.  The Senior Notes 

were all to be repaid on a pro rata basis, but had priority of repayment over borrowings Pison 

received from other sources. 

146. In or around October 2019, Pison and the holders of the Senior Notes, 

including James, amended the terms of their notes to match the interest rate offered to 

investors in Pison Offering 5 (a variable rate of 15% to 25%) and to make the Senior Notes 

subordinate to investors in that offering. 

147. In or around February 2020, Pison and the holders of the Senior Notes, 

including James, again amended the terms of their notes to make them equal in repayment 

priority to investors in Pison Offering 7. 

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148. In or around September 2020, Pison and the two remaining holders of the 

Senior Notes, James and Investor 1, again amended the terms of their notes to make them 

equal in repayment priority to investors in Pison Offering 9.  By that time, Investor 2 and 

Investor 3 no longer held any Senior Notes, because they had converted their notes into 

shares of Pison. 

149. After December 2018, James continued to make additional working capital 

advances to Pison.  Pison did not issue a new note to James, but instead tracked the 

working capital advances on a spreadsheet as loans with a 15% interest rate. 

150. Pison treated all of the working capital advances as payable to James 

whenever James requested repayment, without regard to the obligations Pison had to its 

other noteholders or creditors.  James and Pison did not disclose to investors that Pison’s 

repayment of James’s working capital advances would take precedence over payments to 

investors or creditors.  In treating James’s working capital advances as payable on demand, 

Pison and James violated the provisions of the notes purchased by the Senior Note holders 

and the purchasers of notes in Pison Offering 5, Pison Offering 7, and Pison Offering 9.  

Pison and James prioritized payments solely to James, regardless of the payment priority 

terms of other investors’ notes. 

151. Between June 2018 and May 2022, Pison made approximately 45 payments, 

totaling approximately $6.2 million, to James for repayments of his working capital 

advances.  Pison made payments to James even during periods when it was not repaying 

holders of its promissory notes and other creditors. 

152. James and Pison never disclosed that Pison would prioritize paying James’s 

working capital advances over other noteholders and creditors.   

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F. James and Pison Misused Investor Funds for James’s Personal Benefit  

153. Between December 2017 and September 2022, investors paid a total of 

approximately $32.5 million to purchase Pison securities, both from James and from the 

company.  At the direction of James and/or Pison, investors sent approximately $16.2 

million of those funds to James, and $16.3 million directly to Pison.  

154. When investors purchased securities from the company, Pison directed the 

investors to send their funds to a Pison bank account.  When investors purchased James’s 

personal securities prior to August 2018, James directed the investors to send their funds to 

a Pison bank account, and after August 2018 he  directed the investors to send their funds to 

one of his personal bank accounts.   

155. James and Pison made hundreds of transfers between James’s personal bank 

accounts and the company’s bank accounts.  James directed all of those transfers.  

156. James used some of the investor funds he received into his personal accounts 

for Pison’s benefit, both by transferring cash to the company and by making payments on its 

behalf.   

157. But at James’s direction, Pison used investor funds for James’s personal 

benefit.  Between December 2017 and July 2023, Pison made approximately $6.2 million in 

cash transfers to James.  Pison also made approximately $2.3 million in payments on behalf 

of James. 

158. James also spent investor  funds deposited into his personal bank accounts to 

make numerous personal expenditures and live a luxurious lifestyle. 

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159. In sum, James received a net personal benefit of more than $10.8 million from 

the deposits of investor funds, cash transfers back and forth between Pison’s accounts and 

James’s personal accounts, and payments James and Pison made on behalf of each another. 

160. James and Pison began diverting investor funds for James’s personal benefit 

no later than March 2018.  James and Pison continued diverting investor funds for James’s 

personal benefit throughout the duration of their fraudulent scheme. 

161. Between March 2018 and July 2023, James spent investor funds as follows 

(all numbers approximate): 

• $3.4 million to purchase, finance, maintain, and use a private jet;  

• $2 million to purchase James’s personal residence in Ohio; 

• $1.3 million in rent for a $29,000/month apartment in New York City; 

• $855,000 in personal credit card payments; 

• $850,000 in retail purchases, including $285,000 at a luxury watch retailer, 

$150,000 at an auction house, $120,000 at an art gallery, $50,000 at a jeweler, 

and $40,000 at a designer clothing company; 

• $700,000 in home renovations and expenses, including theater equipment, a 

piano, and $60,000 in aquarium and fish expenses; 

• $630,000 to purchase and maintain several automobiles from manufacturers 

including Maserati, Land Rover, BMW, Audi, and Cadillac;   

• $425,000 in personal loan and lease payments, including a lease on a Rolls-

Royce automobile; 

• $400,000 to purchase a vacation home in Florida; 

• $310,000 in cash and miscellaneous withdrawals; 

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• $250,000 in payments to family members; and 

• $225,000 in personal property taxes.  

162. Beginning in late 2021, as the flow of investor funds slowed, James had 

trouble maintaining the lavish lifestyle he had created for himself.  As a result, he sold some 

of the expensive assets he had acquired, including the private airplane and several 

automobiles. 

163. The vast majority of funds deposited into James’s personal bank accounts 

between June 2018 and July 2023 came either from Pison, from purchasers of Pison 

securities, or from the sale of assets previously purchased with investor funds. 

164. James told some investors who bought his personal securities, and the Pison 

board with respect to the November 2019 transaction, that he would retain a portion, 

typically 35%, of the investor proceeds to cover his personal tax liabilities incurred as a 

result of his securities sales.  James did not disclose to any investors that he would use their 

funds for any other personal purpose. 

165. During the entire period from June 2018 through July 2023, James paid less 

than $2.3 million in income taxes, which is far less than either the $10.8 million in investor 

funds he used for his personal benefit, or 35% of the proceeds he received for selling his 

personal securities.   

166. James and Pison acted knowingly, recklessly, or alternatively negligently, 

when they used investor funds to pay James’s personal expenses and failed to use all of 

them for the disclosed purposes of supporting Pison’s business or to pay James’s tax 

obligations arising from his sale of his personally-held Pison securities. 

 

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G. James Transferred Assets He Acquired With Investor Funds to Relief 
Defendants Genacts and Soisi  
 

167. James titled some of the assets he acquired with the proceeds of investor 

funds, such as homes, automobiles, and his personal airplane, in the names of Relief 

Defendants Genacts and Soisi.  Assets titled in Genacts’s name include, but are not limited 

to, James’s Florida home, two BMW automobiles, an Audi sport utility vehicle, and a 

Corvette.  Assets titled in Soisi’s name include, but are not limited to, James’s Ohio home, 

two Land Rover vehicles, three other sport utility vehicles manufactured by Maserati, 

Cadillac, and Lincoln, a Ford Mustang Shelby GT500, and a pickup truck. 

168. James also transferred cash to Genacts.  The cash transferred to Genacts 

consisted of investor funds or the proceeds from the sale of assets purchased with investor 

funds.  

169. Genacts and Soisi have no legitimate claim to the investor monies, or the 

assets purchased with those monies, that James transferred to Genacts and Soisi.  

COUNT I 
Fraud in the Offer or Sale of Securities 

[Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a)] 
(Against James and Pison) 

 
170. Paragraphs 1 - 169 are hereby realleged and incorporated herein by reference. 

171. By engaging in the acts and conduct described in this Complaint, Defendants 

James and Pison, directly or indirectly, in the offer or sale of securities, by use of the means 

or instruments of transportation or communication in interstate commerce or by use of the 

mails, used and employed devices, schemes, or artifices to defraud; obtained money or 

property by means of untrue statements of a material fact or an omission to state material 

facts necessary in order to make the statements made, in the light of the circumstances 

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under which they were made, not misleading; and engaged in transactions, practices, or 

courses of business which operated or would operate as a fraud and deceit upon the 

purchaser. 

172. James and Pison engaged in the fraudulent conduct described above 

knowingly or recklessly. 

173. James and Pison also acted negligently in engaging in the conduct described 

above. 

174. By reason of the foregoing, Defendants James and Pison, directly or 

indirectly, violated, and, unless enjoined, will continue to violate Section 17(a) of the 

Securities Act, 15 U.S.C. § 77q(a). 

COUNT II 
Fraud in Connection with the Purchase or Sale of Securities 

[Exchange Section 10(b), 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5] 
(Against James and Pison) 

 
175. Paragraphs 1 - 169 are hereby realleged and incorporated herein by reference. 

176. By reason of the acts and conduct described in this Complaint, Defendants 

James and Pison directly or indirectly, in connection with the purchase or sale of securities, 

by the use of means or instrumentalities of interstate commerce or of the mails or any 

facility of a national securities exchange: (a) used and employed devices, schemes, or 

artifices to defraud; (b) made untrue statements of a material fact or omitted to state 

material facts necessary in order to make the statements made, in the light of the 

circumstances under which they were made, not misleading; and (c) engaged in acts, 

practices, or courses of business which operated or would operate as a fraud and deceit upon 

any person. 

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177. James and Pison engaged in the fraudulent conduct described above 

knowingly or recklessly. 

178. By reason of the foregoing, James and Pison, directly or indirectly, violated, 

and, unless enjoined, will continue to violate Section 10(b) of the Exchange Act, 15 U.S.C. 

§ 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder. 

COUNT III 
Relief Defendants 

[Against Genacts and Soisi] 
 

179. Paragraphs 1 - 169 are hereby realleged and incorporated herein by reference. 

180. The assets obtained by Genacts and Soisi are the proceeds, or were purchased 

with the proceeds, of the securities violations committed by James and Pison as described in 

this Complaint. 

181. Genacts and Soisi have no legitimate claim to the assets they obtained as a 

result of the fraudulent scheme described in this Complaint. 

PRAYER FOR RELIEF 
 

WHEREFORE, the SEC respectfully requests that this Court: 
 

I. 

Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of Civil 

Procedure, permanently enjoining James and Pison, and their officers, agents, servants, 

employees and attorneys, and those persons in active concert or participation with any of 

them, who receive actual notice of the judgment by personal service or otherwise, and each 

of them, from: 

a. violating Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]; and 
 

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b. violating Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 

Rule 10b- 5 thereunder [17 C.F.R. §§ 240.10b-5]. 

II. 

 Issue a judgment, in a form consistent with Rule 65(d) of the Federal Rules of Civil 

Procedures, permanently enjoining James from directly or indirectly, including, but not 

limited to, through any entity owned or controlled by him, participating in the issuance, 

purchase, offer, or sale of any security in an unregistered transaction; provided, however, 

that such injunction shall not prevent James from purchasing or selling securities listed on a 

national securities exchange for his own personal account. 

III. 

 Issue an Order prohibiting Defendant James from acting as an officer or director of 

any public company, pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. 

§ 78u(d)(2)]. 

IV. 

Order Defendants and Relief Defendants to pay disgorgement of any unjust 

enrichment they received as a result of the violations alleged herein, together with 

prejudgment interest thereon, pursuant to Sections 21(d)(3), 21(d)(5) and 21(d)(7) of the 

Exchange Act [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), 78u(d)(7)]. 

V. 

Order each Defendant to pay a civil monetary penalty pursuant to Section 20(d) of 

the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 

78u(d)(3)]. 

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VI. 

Retain jurisdiction of this action in accordance with the principles of equity and the 

Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders 

and decrees that may be entered, or to entertain any suitable application or motion for 

additional relief within the jurisdiction of this Court. 

VII. 

Grant such other and further relief as this Court may determine to be just and 

necessary. 

JURY DEMAND 

The SEC demands a trial by jury on all claims so triable.   

 

 
Dated:   May 7, 2024     

 
UNITED STATES SECURITIES 

                                                           AND EXCHANGE COMMISSION 
 
                                                      By:    /s/ Christopher H. White             
     Christopher H. White (IL Bar No. 6280031) 
     Benjamin J. Hanauer (IL Bar No. 6280156) 
     Raven A. Winters (IL Bar No. 6291077)  
       
     175 West Jackson Blvd., Suite 1450 
     Chicago, IL 60604 

      Telephone: (312) 353-7390 
     [email protected] 
 

Attorneys for the Plaintiff 

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