US SEC sues company that markets beverages to women

The seal of the United States Securities and Exchange Commission (SEC) is visible at their headquarters in Washington, DC, United States, on May 12, 2021. REUTERS / Andrew Kelly / File Photo

NEW YORK, Sept. 15 (Reuters) – A Southern California company that sells beer, wine and bottled water targeting female customers has been sued by the United States Securities and Exchange Commission for allegedly defrauded investors of millions of dollars.

In a complaint filed Tuesday, the SEC said SHE Beverage Co raised more than $ 15 million from more than 2,000 investors in unregistered stock sales from 2017 to 2019 by falsely touting its business plans and by promoting its successes.

The SEC said the Lancaster, Calif., Based company overestimated its revenue, spent only 2% of investors’ income on beverage inventories instead of the promised 30%, and claimed to have received public offers from purchase of up to $ 500 million.

He also said CEO Lupe Rose, CFO Sonja Shelby and COO Katherine Dirden embezzled at least $ 7.5 million from investors, including $ 1.2 million spent in casinos and d other money to buy cars, trucks and luxury goods and to make rental payments on a home.

“We have reviewed the complaint and look forward to correcting the case and proving the allegations to be incorrect in open court,” said Jonathan Bletzacker, lawyer for the company and executives, on Wednesday.

The SEC said SHE was incorporated in 2015, six years after co-founders Rose, 52, and Shelby, 58, both of Palmdale, Calif., Began work on its concept.

SHE’s website describes the company as “celebrity-driven”, with water-based products designed to serve a “health-conscious” audience.

The SEC lawsuit in Los Angeles federal court calls for civil fines, recovery of ill-gotten gains, and officer and director bans against individual defendants.

The case is SEC v SHE Beverage Co, US District Court, Central District of California, No. 21-07339.

Reporting by Jonathan Stempel in New York; Editing by Mark Porter

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