The Securities and Exchange Commission has declared fraud charges against a New York brokerage firm and two brokers who allegedly used misleading sales tactics to steer investors toward dicey investments in a purported clean energy company between 2009 and 2010.

The authority alleges that Gregg Lorenzo, the founder of Charles Vista, teamed up with investment banker Frank Lorenzo (the Lorenzos are not related), to produce a string of false and unfounded statements and create the impression that speculative debt securities issued by Waste2Energy Holdings were risk-free and likely to result in vast investment returns. However, Waste2Energy eventually filed for bankruptcy.

Meanwhile, an email sent to customers by Charles Vista made “various false claims,” such as that Waste2Energy possessed “over $10 million in confirmed assets” to provide investors with protection against losses. The firm actually had written its assets down to less than $1 million, according to the complaint.  

Gregg Lorenzo allegedly made the debentures’ stock conversion feature appear valuable by making “baseless predictions about the future of the company’s stock.” The SEC said Lorenzo told at least one investor that he believed Waste2Energy would be a NASDAQ-trading stock within a year.

“Documents attached to some of Waste2Energy’s SEC filings indicate that Charles Vista had arranged to receive a 10 per cent ‘commission’ on the gross proceeds of all debentures sales, a consulting fee of $10,000 per month for 12 months, among other commissions and fees,” the authority said.

The SEC’s division of enforcement said that administrative proceedings will determine what, if any, remedial action or financial penalties are appropriate in the public interest against Charles Vista and the Lorenzos.