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SEC seeking arrest warrant for Nanaimo man

2010-11-15 13:37 ET - Street Wire
Also Street Wire (U-*SEC) U.S. Securities and Exchange Commission
Also Street Wire (U-CPRK) Copper King Mining Corp
by Mike Caswell
http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1779987&symbol=*SEC&news_region=C

The U.S. Securities and Exchange Commission has asked a judge to issue an arrest warrant for Daryn Fleming, a Nanaimo man who has an unpaid $59,709 fine. (All figures are in U.S. dollars.) The SEC says that Mr. Fleming agreed to pay the money in 2009 to settle civil fraud charges he faced for issuing false news releases, but he has not sent payment in full.

The fine stems from the 2008 promotion of International Broadcasting Corp., an OTC Bulletin Board listing that purported to have deals to broadcast a stock talk show in Florida. The company issued news releases falsely claiming that two radio stations had agreed to pick up the show. The stock had a 0.99-cent high, and Mr. Fleming sold an unspecified number of shares during the promotion.

Mr. Fleming settled the charges on April 14, 2009, agreeing to pay $59,709 in disgorgement and civil penalties, and to a permanent ban from penny stocks. He did not admit to any wrongdoing. The SEC says that Mr. Fleming only paid part of the fine though.

In a motion for issuance of a bench warrant, filed on Nov. 4, 2010, the regulator claims that Mr. Fleming appears to have no intention of paying the money. The original judgment specified that he pay off his fine over a one-year period. A further contempt of court order, issued on Jan. 25, 2010, required that he pay the outstanding balance of $34,709 immediately. The SEC says that Mr. Fleming has not complied with either order. It is asking that the judge jail him until he has paid the money.

SEC's complaint

The case began on Jan. 23, 2008, when the SEC filed a civil fraud complaint in the Eastern District of Washington against Mr. Fleming and a Florida man, Matthew Bruce. The regulator identified Mr. Fleming as the president of International Broadcasting, a Spokane-based company that transmitted "Stock Talk Live" over the Internet, and Mr. Bruce as an agent for the company. Mr. Fleming hosted the show, and Mr. Bruce appeared at least once as a guest.

The SEC cited Mr. Fleming for news releases the company issued in late 2005, which stated that it had agreements to transmit its show through two Florida radio stations. One, dated Oct. 28, 2005, claimed that the company had a deal with an AM station based in Sarasota, WIBQ 1220. The release quoted the station's general manager expressing his enthusiasm for the deal.

According to the SEC, the news was entirely false. Nobody at WIBQ had any communication with International Broadcasting. The purported manager that was quoted in the news release, Scott Jacobson, was not an employee of the station.

The SEC also cited Mr. Fleming for a news release issued on Nov. 10, 2005, which claimed that International Broadcasting had an agreement with an FM station in Orlando, WTKS 104.1. According to the complaint, the news was not true. The company had no agreement with WTKS, and a purported quote from the station's program director, Katherine Brown, did not come from Ms. Brown.

Four days after the purported deal with WTKS, investors began to question the company's news. During an Internet broadcast of Stock Talk Live, a caller said he had called Ms. Brown, and she told him the news release about the WTKS deal was fake. Mr. Fleming assured the caller that the deal was not fake, and that there was a miscommunication.

Mr. Bruce then appeared on the show as a guest to discuss the news releases. He explained that the company had an agreement with potential buyers of WTKS, but that agreement had fallen through. Mr. Fleming told listeners: "There you go, ladies and gentlemen. That clears the air for what happened, as I said, I would talk about, and there you have it ... that's Matt Bruce, a man of honor and integrity in helping us get the job done."

According to the SEC, the on-air statements about the radio station deals were also false. When the regulator later questioned Mr. Bruce about them, he replied: "I did what was called PR. It's done all the time in the radio business."

The complaint did not state how many shares Mr. Fleming sold, only saying that he unloaded "large quantities" between Oct. 28, 2005, and Jan. 13, 2006. The stock had a high of 0.99 cent and a low of 0.001 cent during that period.

The SEC sought orders permanently banning both men, plus appropriate civil penalties and disgorgement of ill-gotten gains.

Mr. Bruce settled with the SEC on April 14, 2009, agreeing to an order barring future violations of the U.S. Securities Act. He did not admit to any wrongdoing. The SEC also filed a case against the company itself, which is now called Copper King Mining Corp. It also agreed to an order barring future violations, without admitting any wrongdoing.

Spokane Judge Robert Whaley will decide whether to issue an arrest warrant for Mr. Fleming on Dec. 6, 2010.

http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1779987&symbol=*SEC&news_region=C