Allegations Denied! Mr. Ron Nechemia the Chairman of the Board of Governors of the EurOrient Financial Group to Contest Claims Alleged in California Deptartment of Corporations “Cease and Refrain Order”

 
 
 
 
 
 
 

Allegations Denied! Mr. Ron Nechemia the Chairman of the Board
of Governors of the EurOrient Financial Group to Contest Claims
Alleged in California Deptartment of Corporations “Cease and
Refrain Order”

Los Angeles, California, July 24, 2009 - On March 23rd, 2009, the California Department of
Corporations posted a “Desist and Refrain Order” containing allegations for Violations of California
Corporations Code Sections 25110 and 25401 (the "Order").

Allegations denied
“We are contesting the legal view point of the State of California Department of Corporation
that these securities that we have offered or sold were not ‘qualified or exempt’ from
registration with accordance to the law and required authorization from the State to offer
and sell these securities in this State of California,” says Mr. Ron Nechemia, the founder
and Chairman of the Board of Governors of the EurOrient Financial Group (“EurOrient”)
and he added “We have retained legal counsel to address this disagreement and wrongful
enforcement action of the law by the State.”
Retained legal counsel on behalf of EurOrient Financial Group is addressing the matter with the
California Department of Corporations. At this time, EurOrient officials have been advised that the
offering and sale of the Notes is qualified and exempt from registration according to Section
25110 of the CSL pursuant to Section 25102(f) of the CSL.
EurOrient Financial Group to contest and to reject these wrongful allegations claim according the
following points of law: (a) the total number of Notes issued by the EurOrient is in compliance with
the exception prevision of the law, (b) all the Notes were sold and offered exclusively to an
"accredited investor" within the meaning of the rules of the U.S. Securities and Exchange Commission
and the rules promulgated under the CSL, (ii) had a preexisting personal or business relationship
with EurOrient Financial Group or Mr. Nechemia or (iii) by reason of such investor's business or
financial experience could be reasonably assumed by EurOrient Financial Group and Mr. Nechemia
to have the capacity to protect such investor's own interests in connection with such investor's
purchase of such investor's Note from EurOrient Financial Group and Mr. Nechemia and (c) the
other provisions of Section 25102(f) of the CSL were complied with by EurOrient Financial Group
and Mr. Nechemia, (other than their failure to file a Notice of Transaction with the Commissioner
of Corporations, which failure does not affect the availability of such exemption under the express
provisions of Section 25102(f) of the CSL).

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As to the wrongful allegations set forth in the Order, it will become evident during the coming
months leading up to the hearing and if need be during following legal presiding that no misleading
statements, or omissions, of any material facts were made to investor, Lou Juaneza, the President of
Westhoff Studios, of Torrance, California who has made these fraudulent claims. Specifically Mr.
Nechemia denies ever having made a statement to Lou Juaneza that she had to invest by a certain
date in order to comply with the Securities and Exchange Commission "Reg. D" filing. Mr. Nechemia
pointing out “The fact of the matter is that the Note implicitly and explicitly stated that “THE
SECURITIES EVIDENCED HEREBY AND ISSUABLE PURSUANT TO THIS NOTE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS
(“BLUE SKY LAWS”)OR THE SECURITY LAWS OF ANY OTHER COUNTRY OR
JURISDICTION,” this is a false and hollow accusation that is simply unproveable, which
unfortunately still requires our having to address.”
Deception claims
“The Order” contains three allegations, they are as follows:
1. Beginning in or around May 2008, EurOrient Financial Group (the “EurOrient”) and Mr.
Ron Nechemia offered and sold securities in the form of convertible promissory notes that
were to be converted into member units in a holding company. Mr. Nechemia and
EurOrient stated that the investment would be used to develop a natural gas project, and
that investment returns could be as much as 25%.
2. These securities were offered or sold in this state in an issuer transaction. The Department
of Corporations has not issued a permit or other form of qualification authorizing any
person to offer and sell these securities in this state.
3. In connection with this offer, Mr. Nechemia and EurOrient Financial Group included
untrue statements of a material fact, including that the investor had to invest by a certain
date in order to comply with the Respondent’s “Reg D” filing with the Securities and
Exchange Commission (the “SEC”). In fact, Respondent had not filed anything with the
SEC.
Furthermore, the Order alleges that such Notes were sold by means of written and oral
communications which included untrue statements of one or more material facts or omitted to state
one or more material facts necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading, all in violation of Section 25401
of the CSL.
More specifically, the Order alleges that EurOrient Financial Group and Mr. Nechemia told the
complaining investor that such investor had to invest by a certain date in order for EurOrient and
Mr. Nechemia to file a "Reg. D" offering with the Securities and Exchange Commission.
THE CEASE AND REFRAIN ORDER BASICALLY INSTRUCTS THE EURORIENT
FINANCIAL GROUP AND MR. NECHEMIA NOT TO ISSUE AND SELL
CONVERTIBLE PROMISSORY NOTES ("NOTES") TO INVESTORS IN
CALIFORNIA WITHOUT SUCH SECURITIES BEING ‘QUALIFIED OR EXEMPT’

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ACCORDING TO THE PROVISIONS OF SECTION 25110 OF THE CALIFORNIA
CORPORATE SECURITIES LAW OF 1968, AS AMENDED (THE "CSL") AND
NOTHING FURTHER.
The Treasury Board of the EurOrient Financial Group has added the following statement: “We
understand that during these economic and difficult financial time investors may seek a return of
their invested funds and might choose to employ any tactic necessary even if it means filing
fraudulent charges that also impugn a person’s character and integrity.”
The hearing with respect to the property of the Order is currently set to be heard on October 23,
2009
About EurOrient
EurOrient Financial Group is a private sector global development finance institution accredited
financial institution by United Nations General Assembly on Financing for Development. The
mission of the EurOrient Financial Group is to support the economic and social development
efforts of the less developed countries as they, in particular, seek to achieve the Millennium
Development Goals ("MDGs").
The EurOrient's principal objective is to reducing poverty and promoting sustainable economic
growth. EurOrient invests in projects and programs that promote social development, build human
capacities, and address host government priorities for investments in physical infrastructure that
promote and enhance social development. These projects include roads, transportation and
communication systems, water, sanitation and other types of investments with social development
outcomes such as improved quality of life and increased human knowledge and skills.
More detailed information can be found on the EurOrient’s website: http://www.eurorient.org/
EURORIENT FINANCIAL GROUP EXTERNAL RELATIONS DEPARTMENT
Public Affairs
Media Relations
Phone: 818-990-5080
Phone: 818-206-5322
Fax: 818-990-5566
Fax: 818-990-5566
Email media.center@eurorient.org

 

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