SEC v. Robert Newell and Black Hawk Funding, Inc.

On July 22, 2024, the Securities and Exchange Commission (SEC) charged Robert Newell and his former firm, Black Hawk Funding, Inc., with misusing investor funds, making Ponzi-like payments, and issuing misleading disclosures related to three cannabis-related private fund offerings. The SEC’s complaint alleges that Newell misappropriated approximately $668,000 of investor money and used approximately $37 million raised from over 200 investors for purposes other than disclosed, including making payments to earlier investors and commingling funds with other entities he controlled. The SEC seeks permanent injunctive relief, disgorgement, civil penalties, and an officer-and-director bar against Newell. Black Hawk Funding has agreed to a final judgment, subject to court approval, that includes permanent injunctive relief and a ban on participating in the issuance or sale of securities.