Another Reg A+ company whose leaders could give investors pause is Level Brands (LEVB). The marketing company listed on the NYSE soon after an November 2017 offering at $6 a share that was the largest Reg A+ distribution yet. Level Brands’ “chairman emeritus” and chief brand strategist is Kathy Ireland-a former swimsuit model who the New York Times recently identified as having hundreds of thousands of fake Twitter followers.
Level Brands’ chairman and chief executive is Martin A. Sumichrast, whose career promoting underachieving stocks goes back to the 1990s, when a couple of his companies came public through Stratton Oakmont. After Sumichrast’s firms Czech Industries and Eastbrokers went bust, he teamed up in several publicly-held internet businesses with Bruce Bertman-- until Bertman was arrested and convicted in 2003 of conspiring to pump and dump a stock (see “Casualty Ward,” Aug. 26, 2002).
More recently, Sumichrast touted Chinese companies that reverse-merged into U.S.-listed shells (see “Beware This Chinese Export,” August 28, 2010), only to flounder. He then co-founded a merchant banking firm called Siskey Capital, which made headlines in Charlotte, N.C. papers when his partner Richard Siskey committed suicide in 2016 as the Federal Bureau of Investigation was closing in on a Ponzi scheme that Richard Siskey had allegedly been running. Neither Sumichrast nor Ireland responded to queries from Barron’s, but Sumichrast filed claims against his dead partner’s estate, claiming ignorance of Siskey’s scheme. Securities regulators have never charged Sumichrast with wrongdoing.
Reg A+ has clearly created jobs for stock promoters with checkered stock market histories, but no one has tallied how many real jobs we’ve gotten for the hundreds of millions that investors have sunk into these stocks. Before Congress serves up a JOBS Act 2, its proponents ought to show us real benefits for jobseekers and investors.