On February 21, 2008, the U.S. Securities And Exchange Commission “SEC”) filed an action against Clean Care Technologies, Inc.("CCT"), its former president and principal owner, Edward Klein, and two salespeople, Al Nazon and Anil Varughese (collectively, the “Defendants”).  Securities
and Exchange Commission v. Clean Care Technologies, Inc., et al.,(08 CIV 01719 [HB](S.D.N.Y.), Litigation Release No.20463/ February 21, 2008 http://www.sec.gov/litigation/litreleases/2008/lr20463.htm).
 

• CCT purported to be the exclusive North American Distributor of a self-cleaning toilet seat;


• in order to attract investors, Defendants created phony press releases that boasted of sales that never in fact occurred, and published an offering memorandum that misrepresented, among other critical facts, that CCT owned the rights to the product, which in fact it did not;


• Defendants also failed to disclose to investors that they had established a separate Clean Care entity, Clean Care Systems, LLC ("Systems"),through which the Company raised additional funds by representing that Systems was the exclusive North American distributor of the very same self-cleaning toilet seat;


• Defendants also did not tell investors in CCT or Systems that their funds were commingled to suit the defendants' needs; and


• Nazon and Varughese were not registered as or associated with a registered broker or dealer but nevertheless engaged in cold-calling to sell Clean Care Securities to the public and were paid exorbitant undisclosed commissions based on their success in selling Clean Care Securities. 

The Complaint alleges violations of

• Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder:conducting an unregistered offering of securities and making material misrepresentations and omissions to investors; and


• Section 15(a) of the Exchange Act:Nazon and Varughese, who were not registered as brokers or dealers or associated with a registered broker or dealer, acted as brokers in connection with the sale of Clean Care Securities and received transaction based compensation in connection with those sales; Klein aided and abetted Nazon and Varughese's violations of Section 15(a) of the Exchange Act.

The offering under scrutiny raised approximately $2.2 million from at least 26 unsuspecting investors.You would like to think that these alleged scams died in the 1980s or certainly the 90’s at the latest; but, just goes to show you, some things take on a life of their own.  Ironically, Wall Street professionals refer to low-end deals as being a POS. To be delicate, I’ll spot you just the first two words of that charming phrase: Piece Of. . .  Come to think of it, sounds like that lovely acronym would be a perfect description for this deal.  I don’t know about you, but I sure as hell wouldn’t be sitting down on this one.