Securities and Exchange Commission v. Alliance Transcription Services, Inc., et al., CV-08-01464-PHX-NVW (District of Arizona, Complaint filed August 8, 2008)
Lit. Release No. 21413 / February 16, 2010
Securities and Exchange Commission v. Alliance Transcription Services, Inc., et al., CV-08-01464-PHX-NVW (District of Arizona, Complaint filed August 8, 2008)
Court Grants Summary Judgment and Enters Final Judgments Against Defendants Raymond C. Dabney, Richard A. Dabney, Charles J. Smith, and Philip M. Young
The Securities and Exchange Commission announced today that the United States District Court for the District of Arizona granted the Commission's motion for summary judgment and entered final judgments, on February 8, 2010, against the four remaining defendants in a civil injunctive action filed by the Commission in August 2008. The final judgments permanently enjoin Raymond C. Dabney of Vancouver, British Columbia, Richard A. Dabney of Rancho Palos Verdes, California, Charles J. Smith of Reno, Nevada, and Philip M. Young of Scottsdale, Arizona, from violations of the securities registration provisions of the federal securities laws, and also enjoin Richard Dabney from violations of the antifraud provisions. The four defendants were ordered to pay more than $1.4 million in disgorgement, interest, and civil penalties. The Commission's complaint alleged that the defendants engaged in an unregistered distribution of the securities of Alliance Transcription Services, Inc. (formerly Strategy X, Inc.) from April 2005 through September 2006 and that Alliance and its officers participated in a scheme to manipulate the price and trading volume of its stock.
The court found that the defendants violated Section 5 of the Securities Act of 1933 (Securities Act) by their direct involvement in the sale of unregistered shares of Alliance stock on at least 15 occasions. In addition, the court found that Richard Dabney, the company's managing director, violated Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder by disseminating press releases containing materially false information about Alliance's purported contracts and revenues.
The final judgment against Richard Dabney permanently enjoins him from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and Section 5 of the Securities Act, orders him to pay disgorgement of $315,940.74 plus prejudgment interest of $87,602.41 and a civil penalty of $130,000, prohibits him for five years from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act or that is required to file reports pursuant to Section 15(d) of the Exchange Act, and bars him for five years from participating in any penny stock offering. The final judgment against Raymond Dabney permanently enjoins him from violating Section 5 of the Securities Act and orders him to pay disgorgement of $109,520.00 plus prejudgment interest of $33,817.10 and a civil penalty of $50,000. The final judgment against Smith permanently enjoins him from violating Section 5 of the Securities Act and orders him to pay disgorgement of $148,797.72 plus prejudgment interest of $38,691.19 and a civil penalty of $50,000. The final judgment against Young permanently enjoins him from violating Section 5 of the Securities Act and orders him to pay disgorgement of $357,276.26 plus prejudgment interest of $87,576.53 and a civil penalty of $50,000.
Final judgments against all of the other defendants in this action were entered previously by the court.
For further information, please see Litigation Release Numbers 19870 (October 16, 2006) [subpoena enforcement action filed]; 20676 (August 8, 2008) [civil injunctive action filed and judgment by consent against William D. O'Neal]; 20791 (October 24, 2008) [judgment by default against Alliance]; 21349 (December 23, 2009) [judgment by consent against Clifford A. Lewis]; and Exchange Act Release Number 56610 (October 4, 2007) [order suspending trading in Alliance securities].
http://www.sec.gov/litigation/litreleases/2010/lr21413.htm
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