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US SEC charges Pegasus Wireless with fraud
Wed May 27, 2009 2:07pm EDT

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WASHINGTON, May 27 (Reuters) - U.S. securities regulators charged Pegasus Wireless Corp and two of its senior officers with fraud for allegedly bilking investors of millions of dollars through illegal stock sales, the Securities and Exchange Commission said on Wednesday.

The SEC alleges that Pegasus Wireless, its former chief executive Jasper Knabb and former chief financial officer Stephen Durland reaped more than $30 million by selling millions of Pegasus shares they secretly controlled and lied about the transactions in corporate filings.

The SEC alleges that the former executives used the funds to support their extravagant lifestyles including the purchase of homes, boats, and sports cars.

Pegasus has been in and out of bankruptcy proceedings since 2008, the SEC said.

The SEC is seeking repayment of ill-gotten gains and civil penalties. (Reporting by Rachelle Younglai; Editing by Derek Caney)