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ELVIRA G. GAMBOA WELCOME TO_THE PENNY STOCK BAR
Or is it PEARL ASIAN? Wait... BAE KATIGUMAN?
Whatever! Grab a stool, you stoolie.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Gamboa is permanently barred from participating in an offering of penny stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of any penny stock. A penny stock is any equity security that has a price of less than five dollars, except as provided in Rule 3a51-1 under the Exchange Act, 17 C.F.R. §240.3a51-1.
Doc 17 PDF file
http://viewer.zoho.com/docs/bsazbc
Mr. Chapman failed to respond to the case, so the SEC sought and won a default judgment against him. On June 18, 2010, the judge banned him from penny stocks and invited the SEC to file a motion for appropriate civil penalties.
SEC reaches deal with Sedona's Wile
2010-09-03 14:16 ET - Street Wire
by Mike Caswell
http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1757998&symbol=*SEC&news_region=C
Anthony Wile, the West Vancouver promoter facing civil fraud charges from the U.S. Securities and Exchange Commission for manipulating Sedona Software Solutions Inc., has reached a tentative settlement. In a letter to the judge dated Aug. 31, 2010, Mr. Wile's lawyer has asked that he be relieved of all pretrial obligations while the SEC's lawyers submit a settlement to the commission for approval. The deal comes just weeks before Mr. Wile's trial date.
The charges Mr. Wile faces are for manipulating Sedona to $10 with misleading news releases and paid touts. The SEC said that he issued news releases claiming that Sedona had acquired mines in Central America when the company had not closed any such deal. Two other defendants, Scott and Brian Lines, then sold $1.5-million worth of Sedona shares, the SEC claimed. (All figures are in U.S. dollars.)
It is not clear what the terms of Mr. Wile's settlement could be. The SEC had initially sought an order permanently banning him from penny stocks and banning him from serving as an officer or director of any public company. It had also asked for an appropriate civil penalty and for disgorgement of any ill-gotten gains. The terms of his actual penalty will not become public until the commissioners and the judge approve it.
The trial against the other defendants, meanwhile, remains set to begin on Oct. 12. All parties attended a settlement conference before a magistrate judge on Aug. 16, 2010, but the only deal to arise from the conference so far has been that of Mr. Wile.
SEC's complaint
The case began on Dec. 19, 2007, when the SEC filed a civil complaint against Mr. Wile, the Lines brothers and others in the Southern District of New York. The other defendants included Mr. Wile's uncle, Wayne Wew; 72-year-old newsletter writer Bob Chapman; and the Bermuda brokerage that the Lines brothers control, LOM (Holdings) Ltd.
According to the complaint, the Lines brothers secretly acquired 99 per cent of Sedona's shares in 2002 by using nominee shareholders. They enlisted friends to act as signature directors for offshore companies, which acquired the shares in the months before the touting began.
Then, in January, 2003, the men started touting the deal for mines in Central America. According to the company's news releases, Sedona had merged with a private company called Renaissance Mining Corp. The SEC said the news was misleading, as Sedona had not actually closed the deal, and still had to raise $6-million to uphold its end of the agreement.
As the company issued the news, the Lines brothers and Mr. Wew carried out a prearranged trade, the SEC claimed. Mr. Wew bought 5,000 shares at $8.25 from accounts that the Lines brothers controlled. The stock, which had last traded at three cents, remained near $10 for the rest of the week. The Lines brothers sold 159,300 shares into this artificial demand, the SEC claimed.
At the same time, Mr. Chapman prepared an "independent" research report which, according to the SEC, Mr. Wile paid for. The report predicted that Sedona would reach $62 and that it was "an incredible opportunity that could be the largest public offering in the United States for a mining company this year." He failed to disclose that he had previously bought 370,000 shares of the company at less than $1, the SEC said.
The SEC halted Sedona on Jan. 29, 2003, bringing the promotion to an end. The regulator cited concerns about the accuracy of its agreement with Renaissance. When the company resumed trading two weeks later, it fell to under $1.
The SEC sought orders permanently banning all of the defendants from participating in penny stock offerings, as well as appropriate civil penalties and disgorgement of profits.
Motions to dismiss
The Lines brothers, along with Mr. Wile and Mr. Wew, denied any wrongdoing. In a motion to dismiss filed on Feb. 1, 2010, the Lines brothers claimed that the SEC scuttled the company's deal for the mines by halting the stock. They said the mines were a valuable asset, having once belonged to a public company that had a $1-billion market cap. Sedona's deal for the mines called for it to raise $5.5-million, but coming up with the money became impossible once the SEC halted the stock.
The regulator also started calling potential investors as part of its investigation and scared at least one away, the brothers claimed. The mines eventually went to RNC Gold Inc., a Toronto Stock Exchange listing that is now part of Yamana Gold Inc.
Mr. Wile and Mr. Wew filed similar motions on Jan. 25, 2010.
While Mr. Wile will likely not be participating in the trial, another defendant will also not be present. Mr. Chapman failed to respond to the case, so the SEC sought and won a default judgment against him. On June 18, 2010, the judge banned him from penny stocks and invited the SEC to file a motion for appropriate civil penalties.
http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1757998&symbol=*SEC&news_region=C
Stephen W. Carnes, Lawrence A. Powalisz: Welcome to the Penny Stock Bar.
Posted by: scion
Date: Wednesday, August 25, 2010 4:15:56 PM
In reply to: None Post # of 506
SEC OBTAINS JUDGMENTS AGAINST STOCK DISTRIBUTORS STEPHEN CARNES, LAWRENCE POWALISZ AND THEIR COMPANIES
Litigation Release No. 21632 / August 25, 2010
Securities and Exchange Commission v. K&L International Enterprises, Inc., et al., Case No. 6:09-cv-1638-Orl-31KRS (M.D. Fla.)
SEC OBTAINS JUDGMENTS AGAINST STOCK DISTRIBUTORS STEPHEN CARNES, LAWRENCE POWALISZ AND THEIR COMPANIES
The Securities and Exchange Commission announced today that on May 17 and August 17, the Honorable Gregory A. Presnell of the United States District Court for the Middle District of Florida entered Final Judgments against Stephen W. Carnes, Lawrence A. Powalisz, and their companies K&L International Enterprises, Inc., Signature Leisure, Inc., and Signature Worldwide Advisors, LLC. The Commission's complaint alleged that the defendants engaged in a scheme to evade the registration provisions of the federal securities laws by selling billions of shares of stock issued by microcap companies to the investing public without adhering to the registration requirements of Section 5 of the Securities Act of 1933. The defendants consented to entry of the Final Judgments without admitting or denying the allegations in the complaint.
The Final Judgments permanently enjoin the defendants from violating Sections 5(a) and (c) of the Securities Act, bar them for three years from participating in an offering of penny stock under Section 20(g) of the Securities Act, and require them to pay in installments within one year disgorgement, prejudgment interest, and civil penalties. Carnes agreed to pay disgorgement of $818,261, plus prejudgment interest, of which $716,904 is payable jointly and severally with Worldwide Advisors, and a civil penalty of $100,000. Worldwide Advisors agreed to pay disgorgement of $716,904, plus prejudgment interest, jointly and severally with Carnes, plus a civil penalty of $50,000. Signature Leisure agreed to pay disgorgement of $900,162, plus prejudgment interest, and a civil penalty of $50,000. Powalisz agreed to pay disgorgement of $3,748,563, plus prejudgment interest, jointly and severally with K&L International, and a civil penalty of $150,000. K&L International agreed to pay disgorgement of $6,242,049, plus prejudgment interest, of which $3,748,563 is payable jointly and severally with Powalisz, and a civil penalty of $150,000.
The Commission's case against the two remaining defendants, Jared E. Hochstedler, and his company, Enzyme Environmental Solutions, Inc., is still pending.
For additional information, see Litigation Release Nos. 21231 (September 30, 2009)
http://www.sec.gov/litigation/litreleases/2009/lr21231.htm
and 21224 (September 28, 2009)
http://www.sec.gov/litigation/litreleases/2009/lr21224.htm
FINAL JUDGMENTS OF PERMANENT INJUNCTION AND OTHER RELIEF ENTERED AGAINST DEFENDANTS DALLAS L. ROBINSON, TROY K. METZ AND JOHN A. MATTERA
Litigation Release No. 21627 / August 18, 2010
FINAL JUDGMENTS OF PERMANENT INJUNCTION AND OTHER RELIEF ENTERED AGAINST DEFENDANTS DALLAS L. ROBINSON, TROY K. METZ AND JOHN A. MATTERA
Securities and Exchange Commission v. Prime Time Group, Inc., et al., Civil Action No. 09-80952-CV-Cohn/Seltzer (S.D. Fla.)
The Commission announced that on August 9, 2010, the Honorable James I. Cohn, United States District Court Judge for the Southern District of Florida, entered final judgments of permanent injunction and other relief against Defendants Dallas L. Robinson, Troy K. Metz and John A. Mattera. The final judgments enjoin Robinson and Metz from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The final judgment as to Mattera enjoins him from violating Sections 5(a) and 5(c) of the Securities Act of 1933 and Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder. In addition to the injunctive relief, both Robinson and Metz consented to a civil penalty of $25,000 and a five year penny stock bar, and Mattera consented to paying disgorgement of $70,000, plus prejudgment interest of $8,799.94, a civil penalty of $70,000, and a permanent penny stock bar. Robinson, Metz and Mattera consented to the entry of the final judgments without admitting or denying any of the allegations in the complaint and have fully escrowed the amounts they are required to pay.
The Commission commenced this action by filing its complaint on June 25, 2009, against Robinson, Metz, Mattera and others alleging that they participated in a fraudulent scheme in violation of the federal securities laws.
For more information on earlier actions in this case, see LR-21105 (June 25, 2009), LR-21590 (July 8, 2010).
http://www.sec.gov/litigation/litreleases/2010/lr21627.htm
Former ING adviser, tripped up by surprise audit, could get 8 years for fraud
By InvestmentNews Staff
August 11, 2010
http://www.investmentnews.com/article/20100811/FREE/100819981/-1/INDaily01
Federal prosecutors are seeking an eight-year sentence for a Kirkland, Wash., financial adviser who stole more than $12 million from 42 clients.
Rhonda Breard is being sentenced this afternoon at U.S. District Court in Seattle. She pleaded guilty in April to one count of mail fraud, admitting that she concealed the theft by mailing the clients fake account statements. In March, she was barred from the securities industry by the Financial Industry Regulatory Authority.
She used the money on three expensive homes, travel, jewelry, and more than two dozen vehicles, according to government documents, which she reportedly tried to sell at the end of February, several weeks after she attempted suicide.
Ms. Breard was licensed to sell securities through Des Moines, Iowa-based ING Financial Partners — which, during a surprise audit, uncovered a secret set of files Mr. Breard maintained that detailed her misdealings.
ING has settled with 16 of Ms. Breard's victims, the Seattle Times reported, citing government documents, adding that the firm is currently in negotiations with other clients who lost money in Ms. Breard's fraud scheme.
Breard's attorney has recommended a sentence of about 5½ years, saying she cooperated fully once she was caught.
http://www.investmentnews.com/article/20100811/FREE/100819981/-1/INDaily01
That change will definitely upgrade the lyrics.
I'll email Bob and ask him to update the lyrics:
Instead of:
And Daddy beat up Mommy and broke her collarbone for good luck
How about:
And Bernie beat up Boca and took her bank account for good luck
They'll have to take it up with the Liquor Control Board.
Somebody email StockWatch and tell them to get with the program:
"penny stock ban" doesn't sound nearly as much fun as a multi-year trip to a BAR.
Somebody email StockWatch and tell them to get with the program:
SEC secures $199,000 (U.S.) in penalties for Prime Time
2010-08-09 14:36 ET - Street Wire
Also Street Wire (U-*SEC) U.S. Securities and Exchange Commission
Also Street Wire (U-HGLC) Hunt Gold Corp
by Mike Caswell
http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1747540&symbol=*SEC&news_region=C
The U.S. Securities and Exchange Commission has negotiated penny stock bans and $199,000 in penalties against three defendants in the Prime Time Group Inc. fraud. (All figures are in U.S. dollars.) The SEC claimed that the men, including Vancouver's Dallas Robinson, were officers or shareholders of Prime Time Group when it issued several misleading news releases in 2006 and 2007. Among other things, the company touted a 7-Eleven chain in Puerto Rico that it did not entirely own.
The case had been headed for trial in Florida, but Mr. Robinson and the others agreed to settle before the hearing. Details of the settlements are contained in motions for final penalties the SEC filed on Aug. 6, 2010. According to the motions Mr. Robinson, who was Prime Time's president, has agreed to pay a $25,000 civil fine and has agreed to serve a five-year penny stock ban. The other Canadian defendant, Saskatchewan resident Troy Metz, negotiated an identical deal to that of Mr. Robinson. He had been the company's chief executive officer for part of the scheme.
The largest settlement was with the third defendant, John Mattera, a Florida man who received millions of Prime Time shares based on fraudulently backdated notes. He agreed to pay a $70,000 civil penalty and to disgorge $70,000 in illicit profits, plus interest. He also agreed to a permanent penny stock ban. None of the men admitted to any wrongdoing in settling the case.
With the settlements, the only outstanding defendant is Johnny Ray Arnold, a Florida man who was Prime Time's chairman. The SEC won a default judgment against him on June 11, 2010, after he failed to answer the charges. The judge banned him from penny stocks for life, and invited the SEC to make submissions on an appropriate financial penalty.
SEC's complaint
The case began on June 25, 2009, when the SEC filed a civil complaint against the men in the Southern District of Florida. The complaint identified several businesses that Prime Time touted with misleading or outright false information in 2006 and 2007. These included a 7-Eleven chain, a cellphone accessory business and a rent-to-own car enterprise.
The first business was the 7-Eleven chain in Puerto Rico, which Prime Time acquired in August, 2005. The SEC said Prime Time failed to disclose that in acquiring the chain, it had to pledge a 92-per-cent interest in the stores as collateral for a loan. In April, 2006, Prime Time defaulted on that loan and its interest in the stores fell to 8 per cent. Prime Time did not tell investors about the loss, and even issued news releases about revenues from the chain, the complaint stated.
The company's next business was a wireless division in Canada. In October, 2006, Prime Time acquired Robinson Wireless Inc., a private company that purportedly had exclusive marketing agreements with Virgin Mobile, Fido and T-Mobile. These deals, according to the SEC, did not exist. The company had no agreements at all with T-Mobile and Fido, and it only had an agreement in principle with Virgin.
Prime Time started issuing news touting another deal in January, 2007, when it said it had acquired Xpress Your Cell USA LLC, a cellphone accessory company. Prime Time actually had no agreement to acquire Xpress Your Cell, the SEC said. The company had been negotiating the acquisition, but only had a deal that permitted further negotiations.
According to the complaint, more misleading news came in May, 2007, when Prime Time announced that it had acquired Southern Wheel Workz Inc., a company that sold cars on a rent-to-own basis. As with its prior purported acquisition, Prime Time had no agreement to acquire Southern Wheel, the SEC claimed.
In addition to the news releases, the SEC said that Mr. Mattera and Mr. Arnold carried out a bogus promissory note scheme, in which Mr. Mattera obtained 44 million free-trading share of Prime Time. The company issued the shares based on three nearly identical notes dated May, August and September, 2005, which purportedly represented loans totalling $560,000. The problem, as the SEC saw it, was that Mr. Arnold and Mr. Mattera had not met in 2005. Also, the lender, a private company called Mattera Reserve, did not exist in 2005.
The SEC sought appropriate civil penalties and penny stock bans against all four men, and disgorgement of profits against Mr. Mattera. The regulator acknowledged the assistance of the B.C. Securities Commission in filing the case.
Assuming the judge approves the settlements with Mr. Robinson, Mr. Metz and Mr. Mattera, the only remaining matter will be the size of Mr. Arnold's fine.
Prime Time, which traded as high as 45 cents during the scheme, has since rolled back 1:3,000 and changed its name to Hunt Gold Corp. It last traded for 0.01 cent.
http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1747540&symbol=*SEC&news_region=C
» You can also:
Authority for the Federal Courts to apply a "penny stock bar" was due to an Amendment of the SECURITIES EXCHANGE ACT OF 1934 and the SECURITIES ACT OF 1933 as outlined in Section 603 of the Sarbanes-Oxley Act of 2002.
PinkSheets isn't a regulator...
-------
Sarbanes-Oxley Act of 2002
Federal court authority to impose penny stock bars.
Section: About the SEC | Size: 195 kb | Type: pdf | Date: September 9, 2004
http://www.sec.gov/about/laws/soa2002.pdf
----------------
SEC. 603. FEDERAL COURT AUTHORITY TO IMPOSE PENNY STOCK BARS.
(a) SECURITIES EXCHANGE ACT OF 1934. — Section 21(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78u(d)), as amended
by this Act, is amended by adding at the end the following:
‘‘(6) AUTHORITY OF A COURT TO PROHIBIT PERSONS FROM PARTICIPATING
IN AN OFFERING OF PENNY STOCK. —
‘‘(A) IN GENERAL. — In any proceeding under paragraph (1)
against any person participating in, or, at the time of the
alleged misconduct who was participating in, an offering of
penny stock, the court may prohibit that person from participating
in an offering of penny stock, conditionally or unconditionally,
and permanently or for such period of time as the
court shall determine.
‘‘(B) DEFINITION. — For purposes of this paragraph, the term
‘person participating in an offering of penny stock’ includes
any person engaging in activities with a broker, dealer, or
issuer for purposes of issuing, trading, or inducing or
attempting to induce the purchase or sale of, any penny stock.
The Commission may, by rule or regulation, define such term
to include other activities, and may, by rule, regulation, or
order, exempt any person or class of persons, in whole or
in part, conditionally or unconditionally, from inclusion in such
term.’’.
(b) SECURITIES ACT OF 1933. — Section 20 of the Securities Act
of 1933 (15 U.S.C. 77t) is amended by adding at the end the
following:
‘‘(g) AUTHORITY OF A COURT TO PROHIBIT PERSONS FROM
PARTICIPATING IN AN OFFERING OF PENNY STOCK. —
‘‘(1) IN GENERAL. — In any proceeding under subsection (a)
against any person participating in, or, at the time of the
alleged misconduct, who was participating in, an offering of
penny stock, the court may prohibit that person from participating
in an offering of penny stock, conditionally or unconditionally,
and permanently or for such period of time as the
court shall determine.
‘‘(2) DEFINITION.—For purposes of this subsection, the term
‘person participating in an offering of penny stock’ includes
any person engaging in activities with a broker, dealer, or
issuer for purposes of issuing, trading, or inducing or
attempting to induce the purchase or sale of, any penny stock.
The Commission may, by rule or regulation, define such term
to include other activities, and may, by rule, regulation, or
order, exempt any person or class of persons, in whole or
in part, conditionally or unconditionally, from inclusion in such
term.’’.
Pink OTC Markets Inc. will not accept Attorney Letters or Legal Opinions from the following attorneys and/or firms:
Diane D. Dalmy Diane Dalmy and Associates Lakewood, CO September 25, 2009
http://www.otcmarkets.com/otcguide/no_attorneys.jsp
In response to,
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=51727237
Sandy Winick, Welcome to The Penny Stock Bar.
By default, even. #msg-49317137
Joseph Emas, Surfside, Fla Welcome to the Penny Stock Bar!
...Emas has agreed to be barred for two years from serving as a securities counsel for any publicly traded company...
#msg-45662287
LOL:
Posted by: genstock #msg-27350739
...that fact being the Joe Emas one of the top 5 xecurities lawyers in the contry is handling the filing of the audits and the form 10 .He is connected and able to get things on the otcbb pronto or about half the time.He wouldnt put his name on a piece of crAP FOR WHAT ITS WORTH...
Posted by: navycmdr #msg-19509548
..ER Urgent Care Centers (PINKSHEETS: ERUC) is proud to announce that it has retained the office of Joseph Emas, one of the nation's leading SEC attorneys, to finalize its SB-2 registration and...
In Digital Gas Case, Judge Permanently Bars Brian Smith from securities industry
For Immediate Release: September 30, 2009
For Further Information:
David Wald
609-292-4791
Office of The Attorney General
- Anne Milgram, Attorney General
http://www.nj.gov/oag/newsreleases09/pr20090930a.html
Spring Lake Resident Ordered to Pay $5.1 Million in Penalties and Restitution for Fraudulently Pushing Penny Stock
In Digital Gas Case, Judge Permanently Bars Brian Smith from securities industry
A Superior Court judge has ordered Brian Smith of Spring Lake to pay $5,193,280 in penalties and restitution for violating the New Jersey Uniform Securities Law by fraudulently operating a publicly-traded penny stock shell company, Digital Gas Inc., fraudulently issuing stock and issuing false press releases to boost the value of that stock.
Superior Court Judge Thomas W. Cavanagh, entering a final decision in a suit brought by the Attorney General and the New Jersey Bureau of Securities, permanently barred Smith from the securities industry, and ordered Smith and Digital Gas to pay $4,693,280 in restitution. The judge also ordered Smith and Digital Gas to each pay $500,000 in civil penalties, and ordered Lynn Smith, Smith’s wife and defendant, to disgorge $809,237 in funds she received from her husband’s scheme.
Judge Cavanagh filed his decision on Monday following a 10-day civil trial which concluded in June in his Monmouth County courtroom. He found that for seven years, from 1999 to 2007, Smith sold unregistered Digital Gas securities to at least 200 investors but was not a registered agent. The judge also found that Smith issued press releases that manipulated the price and demand for Digital Gas and concluded that Brian and Lynn Smith used investor funds for their personal benefit, including home improvement and mortgage expenses related to their Spring Lake home.
The Bureau of Securities had obtained a temporary order in October 2006 freezing the assets of Digital Gas and the Smiths. While Digital Gas is currently in a Chapter 7 Bankruptcy in Michigan, the Smiths’ assets, including their home in Spring Lake, are subject to collection efforts by the Bureau of Securities.
“This case is another example of why investors need to carefully research company backgrounds before investing their hard earned money,” Attorney General Anne Milgram said. “It is also why we urge consumers to check with our Bureau of Securities to determine whether securities are properly registered.”
Digital Gas was a Michigan-based corporation that publicly traded on the Over-The-Counter market as DIGG.PK. The Bureau of Securities charged that Digital Gas was a shell corporation with no known business operations, although its Website claimed it was a business incubator for new technologies in the energy and natural resource fields. The judge found it had no bank accounts in its name, and that Smith used fraudulent corporate resolutions to cause a transfer agent to issue shares of the stock.
Attorney General Milgram thanked Bureau of Securities Investigator Thomas LaGreca, Supervising Investigator Michael McElgunn, and Investigator Isaac Reyes for their work on the case, and also thanked former Chief of Enforcement Richard Barry and former Supervising Investigator James Lane. Deputy Attorneys General Anna Lascurain, Christopher W. Gerold and Toral M. Joshi handled the matter for the Division of Law. Gerold and Joshi represented the state at the trial.
###
http://www.nj.gov/oag/newsreleases09/pr20090930a.html
Mohit Khanna - Welcome to the Penny Stock Bar.
SEC OBTAINS PERMANENT INJUNCTIONS IN A PHONY INVESTMENT POOL SCHEME; PROMOTER PERMANENTLY BARRED
Litigation Release No. 21306 / November 19, 2009
Securities and Exchange Commission v. Mohit A. Khanna, MAK 1 Enterprises Group, LLC, et al., United States District Court for the Southern District of California, Case No. 09cv1784 BEN (POR) (filed Aug. 17, 2009).
SEC OBTAINS PERMANENT INJUNCTIONS IN A PHONY INVESTMENT POOL SCHEME; PROMOTER PERMANENTLY BARRED
The Securities and Exchange Commission ("Commission") announced that it obtained permanent injunctions against Mohit A. Khanna, age 32, and his former company, MAK 1 Enterprises Group LLC, both of San Diego, Calif., which operated a phony investment pool scheme. Mohit Khanna and MAK 1, through its Court-appointed receiver, agreed to the entry of the permanent injunctions, which were entered on October 6 and November 3, 2009, respectively. The injunctions permanently enjoin Mohit Khanna and MAK 1 from violating the antifraud and securities registration provisions of the federal securities laws.
The Commission's initial complaint, filed August 17, in federal court in San Diego, alleged that Mohit Khanna and MAK 1 claimed to pool investor funds to invest in foreign currency trading products and other guaranteed investments, which the complaint alleged were non-existent. The complaint alleged the defendants engaged in a variety of fraudulent conduct designed to solicit new investors and lull existing investors into believing their money was safe and secure, and that Mohit Khanna and MAK 1 misused investor funds to pay for several luxury cars and residential properties, including those owned by his wife, Sharanjit K. Khanna. The complaint charged Mohit Khanna and MAK 1 with violating the antifraud and securities registration provisions of the federal securities laws and named as a relief defendant another company Mohit Khanna controlled, First Opportunities Management Group, Inc. The Commission filed an amended complaint on September 18, which named Sharanjit Khanna as a defendant and charged her with violations of the antifraud provisions and securities registration provisions.
On August 26, the Court issued an order to show cause why Mohit Khanna should not be held in civil contempt for violating the Court's Temporary Restraining Order granted on August 18 based on evidence filed by the Commission and the receiver. The Court ordered Mohit Khanna to show cause why an order of civil contempt should not be issued and why he should not be sanctioned pending his compliance with the TRO. The Court held multiple hearings on the contempt application.
On September 3, the Court granted additional relief that the Commission sought, with the consent of Mohit Khanna, including orders freezing the assets of Mohit Khanna and MAK 1, appointing Charles LaBella of LaBella & McNamara, LLP, as permanent receiver over MAK 1, and requiring Mohit Khanna and MAK 1 to repatriate assets from abroad. On October 6, the Court entered an order, with the consent of Sharanjit Khanna, freezing her assets.
On October 27, the Commission instituted administrative proceedings against Mohit Khanna barring him from association with a broker or dealer based on the entry of the judgment of permanent injunction against him. Mohit Khanna consented to the entry of the order without admitting or denying the Commission's findings.
In addition to the relief already obtained, the Commission seeks a permanent injunction, disgorgement, and civil penalties against Sharanjit Khanna, and disgorgement and civil penalties against Mohit Khanna and MAK 1.
For further information, see Litigation Release No. 21181 (August 20, 2009).
http://www.sec.gov/litigation/litreleases/2009/lr21306.htm
They wanna go where everybody knows your name...
Today the Securities and Exchange Commission ("Commission") filed a civil action in the U.S. District Court for the Middle District of Florida, alleging that investor relations firm Big Apple Consulting USA, Inc. ("Big Apple"), its wholly-owned subsidiary MJMM Investments, LLC ("MJMM"), and four of its executives-CEO Marc Jablon, vice president Matthew Maguire, MJMM president Mark Kaley, and Keith Jablon, vice president of another Big Apple subsidiary-made public misrepresentations and material omissions about the financial state of CyberKey Solutions, Inc., ("CyberKey") while the two entities sold hundreds of millions of CyberKey shares. These CyberKey shares were sold under no registration statement and no legitimate exemption from registration. The SEC also charged Big Apple and MJMM with acting as unregistered broker-dealers, and Marc Jablon, Maguire, and Kaley with aiding and abetting the two entities' violations in that respect.
According to the SEC's complaint, the Big Apple executives learned by August 8, 2006, that CyberKey's only significant source of revenue, a supposed $25 million purchase order from the U.S. Department of Homeland Security ("DHS"), could not be located by DHS itself and almost certainly did not exist. Despite this knowledge, the Big Apple team continued to promote CyberKey and its business relationship with DHS and sold hundreds of millions of CyberKey shares into the public market. In addition to planning and editing press releases, Big Apple used a telephone calling room of 14 to 50 callers to promote CyberKey stock, including the company's relationship with DHS, to registered brokers. In doing so, Big Apple and MJMM acted as dealers in connection with the distribution of CyberKey stock and as brokers by participating in securities transactions at key points in the chain of distribution of CyberKey shares.
The SEC's complaint charges each of the defendants with violations of Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, as well as with violations of Section 17(a) of the Securities Act of 1933 ("Securities Act"). The SEC's complaint also charges Big Apple, MJMM, Maguire and Marc Jablon with violating Sections 5(a) and 5(c) of the Securities Act. Finally, the complaint charges Big Apple and MJMM with violations of Section 15(a) of the Exchange Act and Marc Jablon, Maguire and Kaley with aiding and abetting the entities' violations of Section 15(a).
The SEC's complaint requests permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties against all of the defendants. The complaint also seeks penny stock bars against Big Apple, MJMM, Maguire, and Marc Jablon.
http://www.sec.gov/litigation/litreleases/2009/lr21305.htm
Superior Court Judge Thomas W. Cavanagh, entering a final decision in a suit brought by the Attorney General and the New Jersey Bureau of Securities, permanently barred Smith from the securities industry, and ordered Smith and Digital Gas to pay $4,693,280 in restitution.
9/30/08 NJ Attorney General Press Release
http://www.nj.gov/oag/newsreleases09/pr20090930a.html
For Immediate Release:
September 30, 2009
For Further Information:
David Wald
609-292-4791
Office of The Attorney General
- Anne Milgram, Attorney General
Spring Lake Resident Ordered to Pay $5.1 Million in Penalties and Restitution for Fraudulently Pushing Penny Stock
In Digital Gas Case, Judge Permanently Bars Brian Smith from securities industry
A Superior Court judge has ordered Brian Smith of Spring Lake to pay $5,193,280 in penalties and restitution for violating the New Jersey Uniform Securities Law by fraudulently operating a publicly-traded penny stock shell company, Digital Gas Inc., fraudulently issuing stock and issuing false press releases to boost the value of that stock.
Superior Court Judge Thomas W. Cavanagh, entering a final decision in a suit brought by the Attorney General and the New Jersey Bureau of Securities, permanently barred Smith from the securities industry, and ordered Smith and Digital Gas to pay $4,693,280 in restitution. The judge also ordered Smith and Digital Gas to each pay $500,000 in civil penalties, and ordered Lynn Smith, Smith's wife and defendant, to disgorge $809,237 in funds she received from her husband's scheme.
Judge Cavanagh filed his decision on Monday following a 10-day civil trial which concluded in June in his Monmouth County courtroom. He found that for seven years, from 1999 to 2007, Smith sold unregistered Digital Gas securities to at least 200 investors but was not a registered agent. The judge also found that Smith issued press releases that manipulated the price and demand for Digital Gas and concluded that Brian and Lynn Smith used investor funds for their personal benefit, including home improvement and mortgage expenses related to their Spring Lake home.
The Bureau of Securities had obtained a temporary order in October 2006 freezing the assets of Digital Gas and the Smiths. While Digital Gas is currently in a Chapter 7 Bankruptcy in Michigan, the Smiths' assets, including their home in Spring Lake, are subject to collection efforts by the Bureau of Securities.
"This case is another example of why investors need to carefully research company backgrounds before investing their hard earned money," Attorney General Anne Milgram said. "It is also why we urge consumers to check with our Bureau of Securities to determine whether securities are properly registered."
Digital Gas was a Michigan-based corporation that publicly traded on the Over-The-Counter market as DIGG.PK. The Bureau of Securities charged that Digital Gas was a shell corporation with no known business operations, although its Website claimed it was a business incubator for new technologies in the energy and natural resource fields. The judge found it had no bank accounts in its name, and that Smith used fraudulent corporate resolutions to cause a transfer agent to issue shares of the stock.
Attorney General Milgram thanked Bureau of Securities Investigator Thomas LaGreca, Supervising Investigator Michael McElgunn, and Investigator Isaac Reyes for their work on the case, and also thanked former Chief of Enforcement Richard Barry and former Supervising Investigator James Lane. Deputy Attorneys General Anna Lascurain, Christopher W. Gerold and Toral M. Joshi handled the matter for the Division of Law. Gerold and Joshi represented the state at the trial.
http://www.nj.gov/oag/newsreleases09/pr20090930a.html
just came back fr4om my local fav bar - needed some grub and beer to celebrate
DIGG news - NJ man ordered to pay $5.2M in penny stock fraud
PhillyBurbs.com
updated 16 minutes ago
http://www.msnbc.msn.com/id/33091636/ns/local_news-delaware_valley_panj/
Levittown - A New Jersey man must pay nearly $5.2 million in penalties and restitution stemming from a penny stock fraud case.A judge in Monmouth County ruled Monday that Brian Smith sold unregistered stock to 200 investors. The judge found the Spring Lake resident issued news releases that manipulated the price and demand for the stock of a company called Digital Gas, which is now in bankruptcy.The judge said the scheme lasted from 1999 to 2007. He also found that Smith and his wife used investor funds for their personal benefit, including mortgage payments and improvements to their home.Authorities say Digital Gas was a shell company with no real operations. Its Web site claimed it was a business incubator for new technologies in the energy and natural resource fields.
http://www.msnbc.msn.com/id/33091636/ns/local_news-delaware_valley_panj/
I see employment with the SEC in your future with a thought like that!
The Penny Stock Bar is NOT a SRO!
Let Norm look after the bar for a while...
They could have been updated again. I will have to look later.
Unlike Norm, I can't sit on the barstool all day.
But will be back later
Thanks, I missed that - swatting penny stock bar flies is distracting.
I think the rules were updated in 2005
Look in iBox up there
Penny Stock Bar. Under current law, the penny stock bar is available only in administrative proceedings. However, the Commission frequently brings cases involving serious microcap or penny stock fraud in federal district court in order to obtain injunctive relief. In such a case, if the Commission also wishes to obtain a penny stock bar, it must bring a separate administrative proceeding, typically after the district court case is concluded. The Commission would be able to obtain all necessary relief more efficiently if the district courts had the authority to order penny stock bars.
The bill authorizes federal courts to impose penny stock bars, or conditionally or unconditionally and temporarily or permanently prohibit a person from participating in a penny stock offering. The Commission has requested this authority in order to deal more swiftly with penny stock fraud.
Senate Report 107-205 - PUBLIC COMPANY ACCOUNTING REFORM AND INVESTOR PROTECTION ACT OF 2002
TITLE VI--COMMISSION RESOURCES AND AUTHORITY
http://www.thomas.gov/cgi-bin/cpquery/?&sid=cp107DoXeY&refer=&r_n=sr205.107&db_id=107&item=&sel=TOC_145812&
"penny stock bar"
http://search.sec.gov/secgov/index.jsp#queryResultsTop
...Turino acted in flagrant and repeated contempt of the penny stock bar back from December 2003.
Posted On: June 22, 2009 by LaBovick Law
Florida Judge orders former CEO to pay $9.95 Million for Penny Stock fraud
A Florida Judge orderered former Pinnacle Business Management, Inc Chairman, Jeffrey G. Turrino to pay $9.95 Million and permanently banned him from Penny Stock Offerings.
The Securities and Exchange Commission announced that, Judge Elizabeth A. Kovachevich, United States District Judge for the Middle District of Florida, entered an order of civil contempt against defendant Jeffrey G. Turino.
In her ruling, Judge Kovachevich found that Turino acted in flagrant and repeated contempt of the penny stock bar back from December 2003. This was in connection with a previous Commission enforcement action stemming back from May 2002. In that action, the Commission alleged that Turino, one of his associates, and the penny stock company they operated, Pinnacle Business Management, Inc., had committed securities fraud by making materially false and misleading statements about Pinnacle's business operations. This action was settled by Turino with a civil penalty of $60,000, consent to a permanent fraud injunction, and a penny stock bar for five years.
Financial Services Director, Attorney Marc Dobin made the following comments regarding this case:
This demonstrates two things: Some leopards don't change their spots (or pay attention to what the judges say) and that no matter how many times you tell the investing public to be careful with their money, they will still listen to a good story from a con man and give them their hard-earned money.
To learn more on the case, click on the following link from the SEC website regarding: Securities and Exchange Commission v. Pinnacle Business Management.
http://tinyurl.com/ycllpb5
http://blog.thelawplanet.com/2009/06/florida_judge_orders_former_ce.html
\/ Need current definition from practicing attorney \/
That link is from 2001...
"A penny stock bar is a prohibition from participation in any offering of penny stock pursuant to Section 15(b)(6)(A) of the Securities Exchange Act. 15 U.S.C. § 78o(b)(6)(A) This provision was enacted as part of the Securities Remedies Act and Penny Stock Reform Act of 1990. Pub. L. No. 101-429, 1990 U.S.C.C.A.N. (104 Stat.) 931, 952-53 (October 15, 1990)."
(April 2001, Business & Securities Litigator)
http://www.weil.com/news/pubdetail.aspx?pub=9043
http://www.weil.com/
Scion! Welcome to The Penny Stock Bar. You have an open tab.
This should be a busy decade!
We need lots of quick witted wait staff here.
Was thinking of Buckey's board about CROOKED CEOs when I started this board about BARRED stock pushers --
This board will be about the "Woodys" of the Stock World -- they all seem to know very little about what's really going on when the chips are on the table.
Too much alcohol, I'm sure.
Pick your biggest OTCBB or Pinky Scam of the Century |
#board-7251
Penny stock bar - Bon Mots
[W]e do not disdain to borrow wit or wisdom from any man who is capable of lending us either . . . ." Henry Fielding, Tom Jones
"[T]he securities business is one in which opportunities for dishonesty recur constantly and " this necessitates specialized legal treatment." Richard C. Spangler, Inc., 46 SEC 238, 252 (1976)
"In our complex society the accountant's certificate and the lawyer's opinion can be instruments for inflicting pecuniary loss more potent than the chisel or the crowbar." United States v. Benjamin, 328 F.2d 854, 862 (2d Cir. 1964)
"You can observe a lot by just watching." Yogi Berra
"The cheaper the crook, the gaudier the patter." Dashiell Hammett, The Maltese Falcon
James E. Franklin, Exchange Act Rel. 56649, October 12, 2007
Penny stock bar, collateral estoppel, unclean hands defense
Time from appeal to decision - 10 months, 7 days.
Time from last brief to decision - 6 months, 17 days.
SEC Tea PartyTM
Commentary on SEC Administrative Opinions
http://secteaparty.blogspot.com/2007/10/james-e-franklin-exchange-act-rel-56649.html
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Welcome to BOOTERS! Home of famous criminals on the hot wing!
Post the NAMES and CASE LINKS of SEC "PENNY STOCK BAR" rulings.
Permanent or temporary.
Everybody here drinks seltzer water, so no know-it-all, unemployed drunks leaving a large bar tab, please.
--------------------------
[Release No. 34-51983; File No. S7-02-04]
RIN 3235-AI02
Amendments to the Penny Stock Rules
AGENCY: Securities and Exchange Commission.
SUMMARY: The Securities and Exchange Commission is amending the definition of
"penny stock" as well as the requirements for providing certain information to penny
stock customers. These amendments are designed to address market changes, evolving
communications technology and legislative developments.
EFFECTIVE DATE: September 12, 2005.
Executive Summary
In January 2004, the Commission proposed amendments to rules under the
Exchange Act defining the term "penny stock" and requiring certain broker-dealers to
provide certain information to customers regarding penny stock transactions.1 These
proposed amendments were designed to respond to changing market structures, new
technology, and legislative developments.
In proposing these amendments, the Commission was particularly concerned with
their potential effect on small business capital formation. We recognized the important
contributions small companies make to the economy, and stressed that the rule
amendments were not intended to impede the access of small businesses to the capital
markets or eliminate viable secondary markets for their securities.2
The Commission received a total of 11 comment letters. Commenters included
investors, employees of broker-dealers, an attorney, a law school group, the American
Stock Exchange LLC ("Amex"), the National Futures Association ("NFA"), and The
Nasdaq Stock Market, Inc. ("Nasdaq").3 While many commenters generally supported
the Commission's proposals, some expressed concerns regarding particular provisions.
We discuss specific comments below in connection with the discussion of the rule
amendments.
After carefully considering the comments, the Commission is adopting the rule
amendments as proposed with a technical modification to correct a typographical error in
the proposal. In particular, we are amending Exchange Act Rule 3a51-1 to provide that
securities relying on the exclusions from the definition of penny stock for reported
securities, as defined in Exchange Act Rule 11Aa3-1(a), and for certain other exchangeregistered
securities must either be listed on a "grandfathered" national securities
exchange4 or be listed on a national securities exchange or an automated quotation
system sponsored by a registered national securities association (including Nasdaq) that
satisfies certain minimum quantitative listing standards.
In addition, the Commission is amending Rule 3a51-1 to exclude security futures
products from the definition of penny stock. We are also eliminating an outdated
exclusion for securities quoted on Nasdaq, as well as an outdated provision relating to
Amex's Emerging Company Marketplace.5
The Commission is also amending Exchange Act Rules 15g-2 and 15g-9 to
provide an explicit "cooling-off period" to replace the implicit period that customers
traditionally have had when the disclosure documents required by the penny stock rules
are provided by postal mail rather than electronically. Moreover, we are amending the
penny stock disclosure document (as defined below) and the instructions to it set forth in
Schedule 15G under the Exchange Act6 to update and streamline the document and to
make it more useful and easily readable.
Taken as a whole, these amendments are intended to ensure that investors
continue to receive the protections of the penny stock rules, regardless of changing
technology or market structures.
http://www.sec.gov/rules/final/34-51983.pdf
New Patrons of The Penny Stock Bar may be found on the Securities and Exchange Commission web site:
Administrative Proceedings
The list below provides links to notices and orders concerning the institution and/or settlement of administrative proceedings.
http://www.sec.gov/litigation/admin.shtml
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