Securities Exchange Commission v. David J. Bunevacz et al. was filed in the United States District Court for the Central District of California on April 5, 2022, seeking an injunctive relief, disgorgement, and civil penalties. Specifically, the complaint alleges violations of federal securities laws, including Sections 10(b) and 10b-5 of the Securities Exchange Act of 1934 and Sections 17(a), 5(a) and 5(c) of the Securities Act of 1933.

The SEC brought this enforcement action against David J. Bunevacz (“Bunevacz”) and two entities under his control, Caesarbrutus LLC and CB Holding Group Corp., along with his stepdaughter Mary Hayca Bunevacz (“Mary Hayca”).  Bunevacz and his entities are engaged in the production and sale of cannabis products, particularly “vape” pens infused with Cannabidiol (“CBD”).

Bunevacz raised investor funds based on an alleged misrepresentation that the funds would be used to complete profitable sales of vape pens. Bunevacz allegedly used various methods to generate investments. First, Bunevacz offered promissory notes issued through his entities, which ranged from $10,000 to $3.5 million and promised interest ranging from 10% to 15% per year. Second, Bunevacz sold of stock certificates and promised shares of common stock in one of his entities.  Third, Bunevacz offered profit sharing agreements entitling investors to various percentages of profits from Bunevacz’s business activities. Bunevacz solicited investors from people he knew personally and through his daughter, Mary Hayca. Bunevacz touted himself as a successful businessperson while he fabricated business transactions with other entities that he personally controlled to support the scheme and failed to disclose lawsuits filed against him by past investors and business partners.

Bunevacz misappropriated funds for personal gain and used a portion of investor funds to pay earlier investors. Mary Hayca facilitated many of the false transactions and personally benefitted from investor funds. Based on these allegations, the SEC seeks injunctive relief enjoining Bunevacz and his entities, as well as Mary Hayca, from violating federal securities laws and for disgorgement of all illicitly obtained funds and payment of civil penalties.