Arizona Corporation Commission orders California man to pay $395,000 to defrauded investors

PHOENIX — The Arizona Corporation Commission (ACC) ordered a California man to pay $395,000 in restitution on Wednesday after he defrauded investors.

Don K. Shiroishi was commanded to pay the restitution, as well as a $15,000 administrative penalty, for committing securities fraud, according to the ACC.

Shiroishi was reportedly identified as the co-founder and control person of Pebblekick, Inc., which worked with video game developers to distribute their games around the world, according to the company’s LinkedIn page.

What led to the Arizona Corporation Commission ordering Shiroishi to pay restitution?

The commission said that Shiroishi recruited Scott Wayne Reed, a former Arizona registered securities salesman and licensed investment adviser representative, to sell short-term, high interest notes on behalf of Pebblekick. It was noted that Shiroishi paid Reed commissions.

According to the ACC, Shiroishi was discovered not have disclosed to investors that the salesman and licensed adviser had four tax liens against him. He was also reportedly not authorized by his employer to sell notes from Pebblekick.

In addition, Shiroishi was not registered to offer or sell securities in Arizona, the commission said.

Shiroishi reportedly agreed to the commission’s consent order as well as admitted to its facts and findings.

The ACC said it previously sanctioned Reed for his role in the fraud in March 2022.

Additionally, Shiroishi was ordered to pay $395,000 to the Securities and Exchange Commission in 2023 for securities fraud. 

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