High-stakes poker player Dan Bilzerian may have perfected the art of capturing clicks in the social media universe, but the self-proclaimed “King of Instagram” has now drawn the kind of attention no one wants.
Bilzerian’s cannabis-based lifestyle company Ignite International Brands Ltd. is under under investigation by both the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC). Those investigations follow a prior inquiry launched by the Ontario Securities Commission (OSC) in Canada where the company is headquartered.
Founded in 2017 as a Canadian cannabis company, Ignite has more recently promoted itself in the United States and Mexico as a “global lifestyle brand unlike any other” featuring CBD products, vaping merchandise, nicotine, alcohol, and clothing. Earlier this week, the once-publicly-traded company went private on the same day the SEC asked for an order compelling Ignite to comply with subpoenas it received in May of this year. Those subpoenas demanded the company provide extensive financial records related to securities fraud claims.
Prior to Monday’s filings, Ignite had received three extensions from the SEC during which time Ignite provided the SEC with only 173 documents. Regulators told the court they received documentation of third-party agreements, board minutes, and internal organization charts but that Ignite failed to provide the accounting documentation directly addressing the SEC’s inquiry. According to the SEC, that investigation focuses on the 2020 and 2021 fiscal years and involves allegations into “whether Ignite violated the federal securities laws by making false or misleading statements in reporting its 2020 financial results.”
SEC attorney Patricia Pei wrote, “Several categories of documents called for in the May 20, 2022 subpoena appear to be entirely missing from the June 30 production, including, for the fiscal years 2020 and 2021: Respondent’s accounting records; any purchase orders, invoices, and other documentation related to sales of Respondent’s products; and Respondent’s communications with its auditor, to name a few.”
Ignite counsel claims overlap with pre-existing DOJ investigation
Ignite’s most recent general counsel, Paul Hughes, joined the company in June, and according to the SEC first asked for a third extension before asking for the SEC to halt its investigation entirely due to the ongoing DOJ inquiry.
Pei wrote, “Mr. Hughes claimed that Respondent had already provided ‘tens of thousands’ of documents to the U.S. Department of Justice (the ‘DOJ’) in response to a grand jury subpoena issued the year before. He claimed that the matters covered by that subpoena were ‘highly likely to overlap significantly with the subject of the SEC’s subpoena, and that ‘requir[ing] the company to address civil issues while simultaneously responding to Grand Jury Subpoenas… seems inappropriate.'”
Ignite and the SEC remained at an impasse through Monday when the SEC asked the courts to intervene.
The Bilzerian legacy
According to the Toronto Globe and Mail, the initial Canadian securities investigation highlighted a connection between Ignite and another Bilzerian-owned company. The paper reported Ignite updated its securities filings to include “a contract between the company and a venture owned by Mr. Bilzerian” and “more information about measures of profit that aren’t calculated according to generally accepted accounting principles.”
Though not connected to Ignite or the recent investigations, Bilzerian’s father, Paul Bilzerian, served 13 months in U.S. federal prison for a conviction connected to his attempts to take over several large corporations in the late 1980s. The elder Bilzerian was widely accused of secreting a huge personal fortune. He maintained his innocence throughout a three-decade battle with regulators in the United States. Paul Bilzerian renounced his American citizenship in 2019 and currently lives in St. Kitts and Nevis, in the Caribbean.
Three days after the SEC court filing, Ignite’s corporate website makes no mention of the multiple investigations into the company that once traded on the Canadian Securities Exchange under the symbol “BILZ.”
Ignite reportedly lost $67 million in 2019. Its stock lost roughly 85% of its market value from the high-water mark it reached shortly after going public.
Bilzerian’s long, hot summer
Ignite’s hot water bath with federal investigators is but another rumble in a tumultuous Bilzerian summer.
Online poker operator GGPoker signed the high-living social media influencer to an endorsement deal in December 2020 which ostensibly would expose GG to Bilzerian’s 33 million-strong Instagram following.
With that social media attention, GGPoker also earned numerous public Bilzerian black eyes, most notably embarrassments related to what critics viewed as the playboy’s toxic and misogynistic behavior.
One of GG’s then-affiliates, Vanessa Kade protested the endorsement deal, and Bilzerian infamously responded, “Quiet hoe, nobody knows who you are.” The next year, Bilzerian failed to show up for an event in which he was scheduled to play the female winner of a GGPoker-promoted freeroll, British author and poker player Alex O’Brien.
In March 2022 GG removed all references to Bilzerian from its website. Bilzerian’s friend Adam “Adam 22” Grandmaison explained later that GGPoker had balked on Bilzerian’s demand for $170,000 in private jet and traveling expenses to play a GGPoker event.
In June, on an episode of the “No Jumper” podcast, Bilzerian revealed that he and GGPoker had parted ways and called poker players “f****** nerds.”
Featured image source: Ignite.co