Prosecutor: West Orange CEO Converted $2 Million In Debt to Company Shares

A West Orange man and CEO of a New Jersey biotechnology company has pled guilty to misleading the SEC and converting $2 million in debt to company shares while exercising control of his father-in-law’s company.

Michael M. Cohen, 49, of West Orange, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging him with one count of certifying false statements with the U.S. Securities and Exchange Commission (SEC), U.S. Attorney Paul Fishman stated.

Cohen is the president and CEO of Proteonomix Inc., a biotechnology company in Paramus, New Jersey that performs stem cell research and develops cosmeceutical products.

Cohen’s father-in-law was the president of Nancyco of NY Inc., Joe & Sam of New York Inc., Mollyco of NY Inc., and JSMNM Inc. (collectively, the “FIL Companies”) that purportedly performed work for Proteonomix in exchange for Proteonomix shares.

Cohen admitted he exercised control over the FIL Companies’ bank and brokerage accounts and failed to disclose they were related parties under SEC regulations, Fishman stated.

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In a September 2012 filing with the SEC, Proteonomix and Cohen knowingly failed to disclose that an agreement between Proteonomix and Mollyco, in which $2 million in debt was converted into shares of Proteonomix stock, was a related-party transaction.

As the president, CEO, and chief financial officer for Proteonomix, Cohen was required to accurately disclose the company’s financial information to the investing public, Fishman explained.

SEC regulations require disclosure of “related-party transactions” involving immediate family members with a direct or indirect material interest.

The false statements count to which Cohen pleaded guilty carries a maximum potential penalty of 10 years in prison and a $1 million fine. Sentencing is scheduled for May 27, 2015. The SEC filed a civil complaint on Feb. 19 against Cohen.

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