Taking bets that this may be the tip of the mess.
The Commission announced today that, following an ex parte hearing held on December 4, 2008, Judge Elizabeth A. Kovachevich of the U.S. District Court for the Middle District of Florida issued an order directing Jeffrey G. Turino to show cause why the Court should not hold him in contempt for violating a five-year penny stock bar entered against him on December 5, 2003, as part of a settlement of an earlier Commission enforcement action. The penny stock bar prohibited Turino from participating in any penny stock offering. In the December 4th order, the Court finds that the Commission had made a sufficient and proper showing that Turino had violated this bar by participating in penny stock offerings of Biotech Medics, Inc., Equitable Mining Corp., Global Diamond Exchange, Inc., Grand Entertainment and Music, Inc. and xxxxxxxxxxxxxxxxxxx. The Commission had previously issued orders temporarily suspending the trading in the securities of two of these companies, Equitable Mining Corp. and Global Diamond Exchange.
The order directs Turino to show cause why the Court should not hold him in contempt, should not require him to disgorge the unlawful proceeds from selling shares obtained in penny stock offerings, and should not make him subject to a permanent penny stock bar. Further, the order freezes certain bank and brokerage accounts held or controlled by, or in the name of Melissa Spooner, Robert Leslie, Mountain Passages, Inc., Austin Funding, LLC and CRL Holdings, Inc. Finally, the order extends the penny stock bar against Turino pending a final hearing on the show cause order.
The penny stock bar against Turino resulted from the Commission's May 8, 2002, enforcement action against Turino, Vincent Lo Castro, and a company they controlled, Pinnacle Business Management, Inc. SEC v. Pinnacle Business Management, Inc. et al., Civ. No. 8:02-CV-822-T-EAK (M.D. Fla.) The Commission's complaint alleged that Turino and the other defendants had made materially false and misleading statements in connection with a proposed spin-off of a Pinnacle business division, and charged them with violating the antifraud provisions of the federal securities laws (Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder). On December 5, 2003, Turino consented to the entry of a final judgment that permanently enjoined him from further violations of these provisions and imposed a $60,000 civil penalty, a permanent officer and director bar, and a five-year penny stock bar.
