@PCTL_ CEO defrauding investors / since 1979 / $1.5milly
William D. Moran, Administrator of the New York Regional Office of the Securities and Exchange Commission, announced that on June 20, 1979, the Commission filed a complaint in the United States District Court for the Northern District of New York against John Wagener, Robert Hayes, Gary Grieco , General Tool and Die Company, Inc., First Alleghany Corporation, Financing Associates, Inc., Midwest Engineered Housing Corp., David C.
Walters, Robert C. Rogers, Howard W. Wells, John H. Schell, and Stephen A. Hosid, seeking (a) to enjoin the defendants from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and (b) other equitable relief, including disgorgement of the pro-ceeds from the sale of debentures issued by the corporate defendants and the appointment of a Special Fiscal Agent to oversee disgorgement.
The Commission's Complaint alleges that the de-fendants defrauded over 75 investors of more than
$1.6 million in connection with the offer, sale, and delivery after sale of debentures issued by General Tool, First Alleghany. Midwest Engineered Housing, Financing Associates, and Great Lakes Systems, Ltd., a bankrupt corporation located in Clarinda, lowa. The Commission alleges that de-fendants Wagener, Hayes, and Grieco were the primary promoters of the five issuers' debentures, and that none of the issuers registered the offer or sale of their securities with the Commission as re-quired by the registration provisions of the federal securities laws. Finally, the Complaint alleges that defendants Wagener, Hayes, and Grieco hired defendants Walters, Rogers, Wells, Hosid, and Schell to sell the debentures. All the defendants allegedly made or caused to be made numerous misrepresentations and omissions of material facts, concerning, among other things, (a) the risks of purchasing the debentures, (b) the financial status of the debenture issuers and (c) an intricate web of self-dealing involving the debenture issuers and defendants Wagener, Hayes, and Grieco.
Simultaneously with the filing of the Commission's Complaint, defendants Grieco, Midwest En-gineered Housing, Wells, and Hosid consented to the entry of Final Judgments of Permanent Injunc• tion against them, without admitting or denying the allegations contained in the Commission's Com- also converted th plaint. The Honorable Howard G. Munson, United from investors to States District Judge for the Northern District of Speer Compan
New York, signed the Final Judgments on June undergone liquidi
21, 1979, which (a) enjoined the defendants from payment of $936
violating Sections 5(a), 5(c), and 17(a) of the Exchange Act of 1934 and Rule 10b-5 thereunder, The second cons and (b) provided for other equitable relief, includ- formation to whic ing disgorgement and the appointment of a Spe- charges comprisi cial Fiscal Agent to oversee the ordered dis- May 25, 1977, c gorgement.
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