The United States Securities and Exchange Commission (SEC) is investigating a prominent Canadian cannabis company.
On Monday, the SEC revealed that it had filed an action against Dan Bilzerian’s Markham, Ontario-based Ignite International Brands, Ltd.
In a litigation release, the SEC stated that it seeks an order directing Ignite to comply with an investigative subpoena for documents.
Through the SEC’s filing in the U.S. District Court of California, it seeks to determine, among other things, whether Ignite violated federal securities laws.
Potential violations include making false or misleading statements in 2020 financial results reporting.
“The filing states that the SEC has reason to believe that Ignite improperly recognized and reported certain revenues as part of its 2020 financial statements,” states the SEC release. “The filing alleges that SEC staff served Ignite with an investigative subpoena requiring the production of certain documents.”
According to the release, SEC staff made multiple accommodations, but Ignite did not comply by producing all requested documents.
The SEC says it is seeking a court order for Ignite to explain why the court shouldn’t require it to produce documents required by the subpoena.
Additionally, the SEC wants a court order, following a ruling on the order to show cause, demanding full compliance from Ignite regarding the subpoena.
While the SEC is conducting its fact-finding investigation, it says it has not yet found that any individual or entity has violated the federal securities laws.