Litigation Release No. 25562 / October 18, 2022
Securities and Exchange Commission v. Brent David Willis, No. 1:22-cv-02744 (D. Colo. filed October 18, 2022)
The Securities and Exchange Commission announced today that it filed charges against Brent David Willis, the former Chief Executive Officer (“CEO”) of NewAge, Inc. (formerly known as New Age Beverages Corporation), alleging that Willis engaged in a multi-year fraud by disseminating numerous false and misleading press releases and making false public statements concerning NewAge’s business dealings, and aided and abetted NewAge’s disclosure of material information in violation of Regulation FD.
The SEC’s complaint alleges that between 2017 and 2019, Willis, while CEO, both through his role in drafting and authorizing NewAge press releases and in statements he made in earnings calls, investor conferences, and in media interviews and appearances, made numerous false and misleading public statements concerned a wide range of matters material to NewAge’s business. As alleged, these matters included NewAge’s alleged development of a portfolio of CBD-infused beverages and its purported deals with the U.S. military and several large domestic and international distributors and retailers. According to the complaint, Willis orchestrated this multiyear fraud and disseminated the false and misleading public statements to create the illusion that: (i) NewAge was a pioneer and first mover in the potentially lucrative CBD beverage market and was well-positioned to capitalize once CBD products became legal to sell in the United States and internationally; and (ii) NewAge’s overall beverage portfolio was gaining traction with major retailers and distributors around the world. The complaint alleges that Willis engaged in this fraudulent conduct in order to artificially inflate NewAge’s stock price, improve its financial position, and financially benefit himself. The complaint further alleges that in 2018, Willis aided and abetted NewAge’s selective disclosures of material non-public information concerning its purported deal with the U.S. military and its alleged development of a CBD-infused beverage.
The SEC’s complaint, filed in federal district court in Denver, Colorado, charges Willis with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and aiding and abetting violations of Regulation FD and Section 13(a) of the Exchange Act. The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, civil penalties, and officer-and-director and penny stock bars against Willis.
The SEC’s investigation was conducted by James J. Bresnicky and Edward B. Gerard, with the assistance of Brian Shute in the Office of Investigative and Market Analytics. The case was supervised by J. Lee Buck II and overseen by Melissa R. Hodgman. The litigation will be led by Edward J. Reilly and Paul W. Kisslinger, and supervised by James P. Connor.