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Re: mick post# 897

Wednesday, 09/23/2015 2:48:17 PM

Wednesday, September 23, 2015 2:48:17 PM

Post# of 1138
part two/ SEC Digest from Oct. 1, 1993 also confirming the disbarment

https://www.sec.gov/news/digest/1993/dig100193.pdf

Weiss allegedly misrepresented the risks of investment and how investor funds would be used. Of the more than $1.3 million raised from approximately thirty investors, Weiss used only about $250,000 for investment. Weiss allegedly used over $950,000of investor funds to buy himself a new home and Mercedes Benz, to pay other personal expenses, and, in a Ponzi scheme, to repay certain earlier investors. [State of Washington v. Michael H. Weiss, No. CY-3lll, E.D. WA] (LR-138ll)
CIVIL INJUNCTIVE ACTION FILED AGAINST SEVENTEEN DEFENDANTS
On September 29, the Commission filed a complaint in U.S. District Court for the Eastern District of Pennsylvania against Leslie Mersky, Louis M. Hayo, Jr., Thomas
E. Russo. William J. Hueger, Jay Vermonty, Edward N. LaMarca, Dan L. Hauss. Stuart
J. Bram, John Taglianetti. Gerard A. McCallion, Abe Serot, Abraham J. Salaman, Donald
C. Hulse, Van Pelt, Cahn & Radclif, Inc., Wasatch Stock Trading, Inc., Cantor Capital Corporation and Philadelphia Registrar & Transfer Company. The complaint seeks permanent injunctions against each defendant for some combination of violations of the registration and antifraud provisions of the federal securities laws.
The Commission alleges that from January 1988 through June 1989 Mersky and other defendants participated in an ongoing scheme to fraudulently sell public investors approximately $3.4 million of worthless securities in Amglo Industries, Inc. and Amglobal COrPOration, two public shell cOrPOrations. Without admitting or denyingthe allegations. Taglianetti, Hauss, Wasatch and PilTconsented to the entry of orders,which permanently enjoin them from future violations. The orders will requireTaglianetti and Hauss to disgorge $11,497 and $38,670 together with prejudgmentinterest of $5,020 and $16,887, respectively. Payment of these amounts will be deferred until after a determination of these defendants' ability to pay. [SEC v. Leslle Mersky. et al .• Civil Action No. 93-CV-5200, E.D. Pa.] (LR-13812)
COMPLAINT RAHES THE SOFTWARE TOOLWOlUCS, INC., JOSEPH ABRAMS, LESLIE CRANE, THEODORE HOFMANN, DENNIS O'HALLEY
On September 30, the Commission filed a complaint seeking permanent injunctive and other relief (complaint) against The Software Toolworks, Inc. (Toolworks) and its officials, Joseph Abrams, Leslie Crane, Theodore Hofmann and Dennis O'Halley.
The Commission's complaint alleges, among other things, that Toolworks, Abrams and Crane misled investors in connection with the company's $82 million secondary offering in July 1990 by making material misrepresentations and omissions concerning Toolworks' deteriorating sales of Nintendo software and the absence of a functioning audit committee.
The Commission further alleged that Toolworks overstated its revenues and gross profit for quarter ended June 30, 1990 by approximately 30\ and 23\, respectively, and continued to mislead investors during the September quarter.
The Commission also charged Toolworks' officers with selling their Toolworks stock while in possession of material nonpublic information concerning the misrepresentations and omissions described above. Toolworks, Abrams, Crane and O'Halley consented to be permanently enjoined from further violations of the federal securities laws. Abrams, Crane and O'Halley consented to disgorge over $2 million in losses avoided by their illegal sales. Abrams also consented to be permanently barred from acting as an officer or director of any publicly held company. [SEC v. The Software Toolworks, Inc., USDC, ND CA, Civil Action No. 93-3581, FRS] (Lll-13813)
NEWS DIGEST, October 1, 1993 5
INJUNCTIVE ACTION FILED AGAINST BETTY-NINA aOTE AND PATaICK HCLAREN
The Commission announced the filing on September 30 of a complaint in the United States District Court for the Northem District of Georgia, seeking permanentinjunctions against Betty-Nina Rote and Patrick Mclaren, as well as disgorgement of ill-gotten gains with prejudgment interest, an accounting and imposition of civil penalties.
The complaint alleges that Rote, from in or about August 1988 through the present, and Mclaren, from in or about August 1988 through April 1989, violated the antifraud provisions of the Securities Act and Securities Ezchange Act in connection with the offer and sale of securities of Hutual Hining, Inc., a nov inactive Nevada corporation, by, a.ang other things, falsely representing to investors that Hutual Mining had developed a commercially feasible process to extract precious metals from ore reserves owned by Mutual Mining.
Without admitting or denying the allegations in the Commission's complaint, Rote consented to the entry of a final judgment, which was entered on September 30, 1993, by the Honorable Orinda D. Evans, enjoining her from violations of the antifraud provisions of the Securities Act and Securities Ezchange Act. The final judgmentorders that Rote shall be jointly and severally liable with any other defendant held liable in the action for the disgorge.ent of monies qbtained as a result of the conduct alleged in the Commission's complaint plus prejudgment interest and notes the appropriateness of civil penalties. The final judgment provides that the payment of disgorgement and prejudgment interest thereon is waived and civil penalties are not imposed based upon Rote's swam representations to the Commission that she is financially unable to pay. [SEC v. Betty-Nina Rote and Patrick Mclaren, Civil Action No. l-93-CV-2227-0DE, ND GAl (LR-l38l4)
STOCK AND OPTION SERVICES, INC. AND JOSHUA FRY TEMPORARILY RESTRAINED AND ASSETS FROZEN
The Commission announced that on September 29 the Honorable Walter E. Black, Chief Judge of the United States District Court for the District of Maryland, entered an Order temporarily restraining Stock and Option Services, Inc. (SOS) and Joshua Fry(Fry) from viOlating the antifraud provisions of the securities laws, and the books and records and custody provisions of the Advisers Act. The Judge also ordered the assets of SOS, Fry and family meabers and affiliated entities frozen, and ordered SOS and Fry to provide an accounting of investor funds. A preliminary injunction hearing is scheduled for October 7, 1993. Fry is the principal of SOS, an Annapolis-basedinvestment adviser
The Commission alleges Fry, acting individually or through SOS, has engaged in fraudulent schemes involving SOS clients and investors in a separate fund, in which he has misappropriated money from them by misrepresenting that he would use their funds to purchase securities. The Commission also alleges that SOS, aided and abettedby Fry, has accepted custody of client funds without complying with the requirements of the Investment Advisers Act, and failed to maintain required books and records,such as bank and financial stateaents. The Commission recognizes the assistance of the Maryland Securities Division in this matter. [SEC v. Stock and Options Services, Inc., Joshua Fry, Nancy Booth Fry, Joshua Fry, Jr., Vhip Stables and Good Till Cancelled Fund, OSDC for the District of Maryland, Civil Action No. WN 93-2838] (LR-
13815) NEWS DIGEST, October 1, 1993 6
JEFFREY CLARK ENJOINED
The Commission announced that on September 29 the U.S. District Court for the Central District of California enjoined Jeffrey S. Clark (Clark) from committing future violations and/or aiding and abetting violations of the anti-fraud, reporting and books and records provisions of the Securities Exchange Act. The Court also entered an order prohibiting Clark from serving as an officer or director of a public company and noted the appropriateness of a civil penalty under the Exchange Act but did not impose a penalty based on Clark's demonstrated inability to pay. Clark consented to the entry of the judgment without admitting or denying the Commission's allegations.
The Commission's complaint alleged that during fiscal year 1990, Clark, the Vice President of Finance at 1.2Scan Systems, Inc. (R2), a wholly owned subsidiary of MHI Xedical Inc. (HKI) , intentionally made false entries in R2's accounting books and records, causing HKI to materially overstate its revenue and net income for its fiscal year 1990. To hide his fraudulent scheme, Clark continued to make knowingly false entries in R2's books and records in fiscal year 1991 and knowingly provided false documents and made misrepresentations to HKI's auditors during its audits of HKI's fiscal year 1990 and 1991 financial statements. [SEC v. Jeffrey S. Clark, Civil Action No. 93-5899, WOK, CTx, CD CAl (LR-138l6; AAE Rel. 490)

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