Litigation Release No. 20119 / May 17, 2007 SEC v. Aimsi Technologies, Inc., et al., 05 CV 4724(LLS)(S.D.N.Y.)
The Commission announced today that it has settled its enforcement action, which involves charges of a deliberate "pump and dump" scheme to defraud investors in the stock of Aimsi Technologies, against Defendant Bruce Pollock. On May 10, 2007, the Honorable Louis L. Stanton of the United States District Court for the Southern District of New York entered a final judgment against Pollock that enjoined him from violating Sections 17(a) of the Securities Act of 1933 and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The judgment also prohibits Pollock from acting as an officer or director of a public company, and requires him to pay a civil penalty in the amount of $170,000, and disgorgement and prejudgment interest in the amount of $80,000. The Commission also obtained a final judgment against Relief Defendant William Watkins, which requires disgorgement of $250,000. Pollock and Watkins, without admitting or denying the allegations of the complaint, consented to the entry of these final judgments.
The Commission filed its action on an emergency basis on May 16, 2005, alleging that Aimsi Technologies, Inc., its Chief Executive Officer, Reginald Hall, and a group of stock promoters including Pollock (the "Promoter Defendants"), engaged in a deliberate "pump and dump" scheme to defraud investors, in which the Promoter Defendants, with the active cooperation of Hall, acquired a substantial stake in the shares of Aimsi, orchestrated a fraudulent promotional campaign to drive up the price and trading volume of Aimsi's stock, and then sold their shares at a substantial profit to the investing public after their plan succeeded. The Complaint alleges that before the Commission suspended trading in Aimsi's stock on December 15, 2004, the defendants earned illicit trading profits of at least $3.1 million. In connection with the Commission's filing of the Complaint, it also obtained a temporary restraining order that, among other things, froze defendants' assets.
The Complaint charges violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5. The litigation is pending against the remaining defendants.
