The Arizona Corporation Commission ordered Richard J. Daratony of Tucson to pay a $20,000 administrative penalty for committing securities fraud while not registered to offer or sell investments in Arizona.
The Corporation Commission found that Daratony, doing business as Dr. Richard’s High Desert Naturals and High Desert Natural(s), posted an advertisement to Craigslist in the Phoenix, Arizona section that requested investors for a cannabis grow in California. The Commission found the online advertisement requested a minimum investment of $1,000, and a maximum investment of $100,000, referenced “investments” through loans and “contracts,” and directed viewers to send an email to Daratony to receive a contract.
However, the Commission found the contract contained a false statement that Dr. Richard’s High Desert Naturals, an Arizona LLC was the borrower, when no such LLC existed, and contained a materially misleading statement implying that the securities referenced in the Craigslist.com advertisement were not subject to regulation.