The Securities and Exchange Commission filed charges against a Miami investment company and its president for failing to provide records about its operations promoted on splashy COVID-19-related investment websites created since late March.

E*Hedge Securities Inc. and Devon W. Parks of Delray Beach were charged with failing to provide the required books and records during an SEC examination and improperly registering as an online investment adviser when it didn't qualify.

The company created websites led by Covid19invest.com on March 22 as shelter-at-home orders were taking hold across the nation, the SEC said. The company promoted its new line of business tied to coronavirus research, treatment and vaccines as the pandemic intensified. 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 opening accounts, but it was taken down in April or May, the SEC complaint said.

The charges were filed two months after the Department of Justice announced it would be on the lookout for crimes intended to capitalize on the coronavirus pandemic. The agency offered a chronological approach to its investigation.

The online activity came from a company that has been bouncing around geographically and businesswise since incorporating in Florida in 2016 with a business address in Las Vegas, SEC records show. The SEC approved E*Hedge Inc.'s application to become a registered 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 SEC complaint said. Days later, the business address was changed to New York using the www.ehedgesecurities.com website with Parks as the founder and managing director.

The company dropped its SEC multi-state adviser designation but retained its registration as an online investment adviser, the SEC said. But Parks, who owns more than 75% of the company, is not registered with the Financial Industry Regulatory Authority or the Florida Office of Financial Regulation.

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

The SEC complaint contains E*Hedge screenshots showing its platform for public offerings and private placements including investment opportunities before initial public offerings. Investors who placed funds in pre-IPO accounts could pick a company and were promised shares when the IPO launched.

E*Hedge was nonresponsive when the SEC's Los Angeles staff reached out in 2017 to begin an examination when the company was in Las Vegas. SEC mail was undeliverable. The SEC's Miami regional staff picked up the ball by phone and email April 14 and by WebEx invitation April 15.

Parks told the exam staff April 16 that he was unable to access the secure email due to the pandemic, the SEC said. Parks was told to 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 of Parks' email addresses but read at a third. The SEC and Parks connected on an April 20 WebEx call when he offered reasons why he couldn't cooperate, including Florida's stay-at-home order.

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

With Parks' formal response due April 22, he emailed the day before asking for an extension and noting nonessential businesses were closed in Florida. The SEC staff called his cellphone the same day and extended the deadline by a week. Parks provided no additional information on the call.

The exam staff followed up by emailing 20 questions, but the email was left unopened. Parks also didn't respond to voicemail messages. Silence extended to the SEC complaint filing last Wednesday.

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

The company and Parks were charged in the civil complaint with failing to produce corporate records, aiding an abetting a securities violation and violating the Advisers Act.

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

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

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

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

Read the complaint: