December 11, 2018. The California Department of Corporations issued a Desist and Refrain (“D&R”) Order against San Diego, California based Global Payout, Inc.
According to the D&R, Global Payout issued “Convertible Promissory Notes” to investors. The “Convertible Promissory Notes” indicated that interest would accrue at 15% per year with no interest being paid during the first year and accumulated interest paid after that as a stock dividend. Additionally, the lender could convert the outstanding stock at the price of two cents a share if the price of the common stock averaged 12 cents ($0.12) a share for the previous fifteen trading days. Convertible Promissory Notes” were sold to fifty-four investors without any effort to determine if those investors were properly accredited and suitable to invest in an unregistered security. These “Convertible Promissory Notes” were securities, offered or sold in this state. The Department of Business Oversight has not issued a permit or other form of qualification authorizing any person to offer and sell these securities in this state.