The SEC alleges that the attorney added language to the PPMs to make it appear that it was disclosed to investors that much of the money raised by NewPoint would be loaned to Farahi. The PPMs were then produced to the SEC’s examination and enforcement staff. According to the Office of the General Counsel, Tamman knew that the language he added to the documents was not included in the PPMs actually provided to investors.
My thoughts, in two simple sentences. This is simply an accusation, and we all know that the SEC doesn't always have it's facts straight. It is certainly possible that the SEC is wrong, but assuming the allegations are true, what loon would alter an existing document on behalf of a client and then provide it to the SEC? And, if you were such a loon, given the fact that the PPM has been distributed to third parties during the course of the offering, did you really think that it would go unnoticed by the Staff?
And one more thought. He changed the language in the existing PPM to reflect that the money raised was going to be loaned to the issuer's principal? Really? Imagine what that PPM looked like after it was altered. Dozens of pages describing the company and its business and at the end of the use of proceeds section..."loan to officer."