Two former executives of ContinuityX Solutions, David P. Godwin and Anthony G. Roth, were recently charged by the Securities Exchange Commission (SEC) with allegedly fabricating the company’s revenues.
According to a SEC press release, Godwin and Roth allegedly devised a scheme to inflate the company’s revenues. Between April 2011 and September 2012, Continuity X reported revenues of more than $27 million, but the SEC alleges that 99% of it came from fictitious sales.
Allegedly, Godwin and Roth used the fraudulent SEC filing to raise millions in private placement offerings of ContinuityX Solutions. In one scheme, the SEC alleges the two executives approved companies to become straw buyers for services from internet providers. Allegedly the companies would not have to pay for the service and were promised part of the commissions paid to ContinuityX.
Godwin, the company’s CEO, was criminally charged with six counts of wire fraud for conduct related to the SEC’s case. Allegedly, Godwin received approximately $1.3 million in compensation. Roth is accused of receiving $351,800 in compensation and $456,098 of profits from sales of ContinuityX stock.
The foregoing information, which is publicly available, is being provided by The White Law Group.
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If you invested in ContinuityX Solutions at the recommendation of a financial advisor and would like to speak to a securities attorney to discuss your litigation options, please call the securities attorneys of The White Law Group at (312)238-9650 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.