The Securities and Exchange Commission filedcharges against a Miami investment company and its president forfailing to provide records about its operations promoted on splashyCOVID-19-related investment websites created since lateMarch.

E*Hedge Securities Inc. and Devon W. Parks of Delray Beach werecharged with failing to provide the required books and recordsduring an SEC examination and improperly registering as an onlineinvestment adviser when it didn't qualify.

The company created websites led by Covid19invest.com on March22 as shelter-at-home orders were taking hold across the nation,the SEC said. The company promoted its new line of business tied tocoronavirus research, treatment and vaccines as the pandemicintensified. The website links to the E*Hedge site.

Another website offering a "Covid-19 Invest Challenge"sought investors to start a seven-step process for openingaccounts, but it was taken down in April or May, the SEC complaintsaid.

The charges were filed two months after the Department ofJustice announced it would be on the lookout for crimes intended tocapitalize on the coronavirus pandemic. The agency offered achronological approach to its investigation.

The online activity came from a company that has been bouncingaround geographically and businesswise since incorporating inFlorida in 2016 with a business address in Las Vegas, SEC recordsshow. The SEC approved E*Hedge Inc.'s application to become aregistered investment adviser in 2017.

That company was dissolved in 2019, and E*Hedge Securities Inc.was formed three months later with a Miami address, the SECcomplaint said. Days later, the business address was changed to NewYork using the www.ehedgesecurities.com website with Parksas the founder and managing director.

The company dropped its SEC multi-state adviser designation butretained its registration as an online investment adviser, the SECsaid. But Parks, who owns more than 75% of the company, isnot registered with the Financial Industry RegulatoryAuthority or the Florida Office of Financial Regulation.

On Jan. 21, E*Hedge filed a form saying it had no assets undermanagement and listed a business address in a coworking suite atthe Southeast Financial Center in downtown Miami. Activityresumed as the pandemic took over the international spotlight.

The SEC complaint contains E*Hedge screenshots showing itsplatform for public offerings and private placements includinginvestment opportunities before initial public offerings. Investorswho placed funds in pre-IPO accounts could pick a company and werepromised shares when the IPO launched.

E*Hedge was nonresponsive when the SEC's Los Angeles staffreached out in 2017 to begin an examination when the company was inLas Vegas. SEC mail was undeliverable. The SEC's Miami regionalstaff picked up the ball by phone and email April 14 and by WebExinvitation April 15.

Parks told the exam staff April 16 that he was unable to accessthe secure email due to the pandemic, the SEC said. Parks was toldto call back with a mailing address if he didn't access the email,but he didn't return the call.

The SEC received messages saying its email was unread at two ofParks' email addresses but read at a third. The SEC and Parksconnected on an April 20 WebEx call when he offered reasons why hecouldn't cooperate, including Florida's stay-at-home order.

But he said E*Hedge hadn't raised any money, and he might "go toArizona soon because he and his mother were not doing well," thecomplaint said.

With Parks' formal response due April 22, he emailed the daybefore asking for an extension and noting nonessential businesseswere closed in Florida. The SEC staff called his cellphone the sameday and extended the deadline by a week. Parks provided noadditional information on the call.

The exam staff followed up by emailing 20 questions, but theemail was left unopened. Parks also didn't respond to voicemailmessages. Silence extended to the SEC complaint filing lastWednesday.

Meanwhile, the SEC said the Covid19Invest.com website posted newblog posts April 10 and April 29,  and hosted a freewebinar May 21 titled "Learn How to Invest in Post Covid-19Opportunities."

The company and Parks were charged in the civil complaint withfailing to produce corporate records, aiding an abetting asecurities violation and violating the Advisers Act.

"A registrant's refusal to produce records as required preventsthe SEC from evaluating legitimate concerns that may be raised,"said Eric I. Bustillo, the SEC's regional director in Miami. "TheSEC's examination authority is critical to ensuring that investmentprofessionals comply with the federal securities laws and provideaccurate information to the investing public."

The SEC is seeking a preliminary injunction and filed anexpedited motion for relief. U.S. District Judge Ursula Ungaroreferred the motion the U.S. Magistrate Judge John O'Sullivan witha note to notify the court when the defendants are served. Ungaroset an initial scheduling conference for July 24.

The SEC case was filed by senior trial counsel Alise Johnson inMiami under the supervision of Andrew O. Schiff.

Court records list no one representing E*Hedge and Parks.

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