SEC v. David A. Spargo; CannaCloud, Inc.; and D.A. Spargo & Co. LLC, No. LR-26297, District of Arizona (Apr. 29, 2025) — Press Release
raw: David A. Spargo; CannaCloud, Inc.; D.A. Spargo & Co. LLC
David A. Spargo; CannaCloud, Inc.; D.A. Spargo & Co. LLC, No. 2:25-cv-01043 (Apr. 29, 2025)
summary
David A. Spargo and his companies were ordered to pay over $1.8 million in disgorgement and penalties for defrauding 33 investors in a cannabis app scheme.
paragraph
The SEC obtained a final judgment against David A. Spargo, CannaCloud, Inc., and D.A. Spargo & Co. LLC for defrauding approximately 33 investors of at least $1.65 million. Spargo allegedly diverted funds intended for a cannabis application development project to personal expenses and casinos while promising 20% annual returns. The defendants were ordered to pay joint and several disgorgement of $1,504,559 plus $313,449 in prejudgment interest, with Spargo also facing a $230,464 civil penalty.
narrative
The SEC has secured a final judgment against Arizona resident David A. Spargo and his entities, CannaCloud, Inc. and D.A. Spargo & Co. LLC, for a fraudulent cannabis app investment scheme. Between February and December 2021, Spargo allegedly defrauded approximately 33 investors of at least $1.65 million by promising 20% annual returns to fund the development of a cannabis marketplace application. Instead of investing in the business, Spargo diverted the funds to cover personal expenses and casino gambling. Without admitting or denying the allegations, the defendants consented to permanent injunctions against violating anti-fraud provisions of the Securities Exchange Act. The court ordered joint and several disgorgement of $1,504,559 plus $313,449 in prejudgment interest, along with a $230,464 civil penalty against Spargo. Additionally, Spargo is prohibited from serving as an officer or director of a public company and is barred from participating in most securities offerings.
Classified pre-ipo-fraud(confidence 85%). EDGAR detection: forms S-1/Form D/1-A· recall 72% / precision 8%. detection rule →
Parties
HatcherBeadle
Keywords
spargocannaclouddavid spargosecurities exchangespargo cannacloudexchange commissioncannacloud spargosecuritiessecdavidexchangeinvestorsfinalapril securitiesdefrauding investors
Exhibits & Attached Documents (4)
- complaint perpetrated by defendant David A. Spargo (“Spargo”) through two defendant
- judgment Approve the parties’ Consent Judgment. (Doc. 6). The SEC and Defendant David A.
- judgment Approve the parties’ Consent Judgment. (Doc. 7). The SEC and Defendant CannaCloud
- judgment Approve the parties’ Consent Judgment. (Doc. 8). The SEC and Defendant D.A. Spargo
Extracted insights
Dollar amounts 4
- $1.65M $1.65 million $1M–$10M
- $1.50M $1,504,559 $1M–$10M
- $313K $313,449 $100K–$1M
- $230K $230,464 $100K–$1M
Entities 5
- company cannacloud, inc.
- company d.a. spargo & co. llc
- agency heather c. gorman and maria rodriguez in the sec’s los angeles regional office
- agency Securities and Exchange Commission
- company serving as an officer or director of a public company
Triples 11
- Securities And Exchange Commission charged David a. Spargo, CannaCloud, Inc., and D.A. Spargo & Co. LLC with defrauding approximately 33 investors out of at least $1.65 million dollars
- David a. Spargo represented investors that he would use their money to fund CannaCloud’s business and develop an application for accessing cannabis dispensary inventories
- David a. Spargo claimed that investors would receive a 20% annual return on their investment
- David a. Spargo spent investor funds at casinos and on his personal expenses
- David a. Spargo consented to entry of a final judgment permanently enjoining him from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
- David a. Spargo was ordered to pay disgorgement of $1,504,559 with prejudgment interest of $313,449 and a civil penalty of $230,464
- David a. Spargo was prohibited from serving as an officer or director of a public company
- CannaCloud, Inc. consented to entry of a final judgment enjoining it from future violations and disgorgement of $1,504,559 plus prejudgment interest of $313,449
- D.A. Spargo & Co. LLC consented to entry of a final judgment enjoining it from future violations and disgorgement of $1,504,559 plus prejudgment interest of $313,449
- Securities And Exchange Commission conducted investigation by Heather C. Gorman and Maria Rodriguez in the SEC’s Los Angeles Regional Office
- Securities And Exchange Commission was supervised by Assistant Regional Director Marc J. Blau of the Los Angeles Regional Office
PDF (from attached: complaint)
Text layers
Extracted body text (2,625c)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26297 / April 29, 2025 Securities and Exchange Commission v. David A. Spargo, et al., No. 2:25-cv-01043 (D. Ariz. filed Mar. 28, 2025) SEC Charges Arizona Man and His Companies with Defrauding Investors in Cannabis App Investment Scheme On April 24, 2025, the Securities and Exchange Commission obtained a final judgment against David A. Spargo, a resident of Mesa, Arizona, and two entities in his control, CannaCloud, Inc. and D.A. Spargo & Co. LLC, who were charged with defrauding approximately 33 investors out of at least $1.65 million dollars. The SEC’s complaint, filed in the United States District Court for the District of Arizona, alleged that, from at least February 2021 to December 2021, Spargo represented to investors that he would use their money to fund CannaCloud’s business, claiming that the company was developing an application that would give marijuana consumers the ability to access inventories of cannabis dispensaries and purchase cannabis products. As alleged, Spargo told investors that they would receive a 20% annual return on their investment. According to the complaint, rather than using investor funds to develop CannaCloud’s business as represented, Spargo instead spent investor funds at casinos and on his personal expenses. Spargo, CannaCloud, and D.A. Spargo, without admitting or denying SEC’s complaint, consented to the entry of final judgments permanently enjoining them from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Spargo’s final judgment also enjoins him from participating in the issuance, purchase, offer, or sale of any securities, with a carve-out for trading in his personal accounts, orders him to pay disgorgement of $1,504,559 with prejudgment interest of $313,449, on a joint-and-several basis with CannaCloud and D.A. Spargo, orders him to pay a civil penalty of $230,464, and prohibits him from serving as an officer or director of a public company. In addition, CannaCloud and D.A. Spargo, without admitting or denying the allegations in the complaint, each consented to the entry of a final judgment enjoining each company from future violations and disgorgement of $1,504,559 plus prejudgment interest of $313,449, on a joint-and-several basis with each other and Spargo. The SEC’s investigation was conducted by Heather C. Gorman and Maria Rodriguez in the SEC’s Los Angeles Regional Office, with assistance from trial counsel Alec Johnson. The case was supervised by Assistant Regional Director Marc J. Blau also of the Los Angeles Regional Office.
OCR text (2,625c · html-text · 99% conf)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26297 / April 29, 2025 Securities and Exchange Commission v. David A. Spargo, et al., No. 2:25-cv-01043 (D. Ariz. filed Mar. 28, 2025) SEC Charges Arizona Man and His Companies with Defrauding Investors in Cannabis App Investment Scheme On April 24, 2025, the Securities and Exchange Commission obtained a final judgment against David A. Spargo, a resident of Mesa, Arizona, and two entities in his control, CannaCloud, Inc. and D.A. Spargo & Co. LLC, who were charged with defrauding approximately 33 investors out of at least $1.65 million dollars. The SEC’s complaint, filed in the United States District Court for the District of Arizona, alleged that, from at least February 2021 to December 2021, Spargo represented to investors that he would use their money to fund CannaCloud’s business, claiming that the company was developing an application that would give marijuana consumers the ability to access inventories of cannabis dispensaries and purchase cannabis products. As alleged, Spargo told investors that they would receive a 20% annual return on their investment. According to the complaint, rather than using investor funds to develop CannaCloud’s business as represented, Spargo instead spent investor funds at casinos and on his personal expenses. Spargo, CannaCloud, and D.A. Spargo, without admitting or denying SEC’s complaint, consented to the entry of final judgments permanently enjoining them from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Spargo’s final judgment also enjoins him from participating in the issuance, purchase, offer, or sale of any securities, with a carve-out for trading in his personal accounts, orders him to pay disgorgement of $1,504,559 with prejudgment interest of $313,449, on a joint-and-several basis with CannaCloud and D.A. Spargo, orders him to pay a civil penalty of $230,464, and prohibits him from serving as an officer or director of a public company. In addition, CannaCloud and D.A. Spargo, without admitting or denying the allegations in the complaint, each consented to the entry of a final judgment enjoining each company from future violations and disgorgement of $1,504,559 plus prejudgment interest of $313,449, on a joint-and-several basis with each other and Spargo. The SEC’s investigation was conducted by Heather C. Gorman and Maria Rodriguez in the SEC’s Los Angeles Regional Office, with assistance from trial counsel Alec Johnson. The case was supervised by Assistant Regional Director Marc J. Blau also of the Los Angeles Regional Office.