CARDIOVASCULAR SCIENCES (CVSC)

[scion]

The Securities and Exchange Commission filed a civil action today in the United States District Court for the Northern District of Illinois against Naperville, Illinois based Seven Palm Investments, LLC and its principal Peter P. Veugeler, together with Orlando, Florida based Cardiovascular Sciences, Inc., and Lawrence H. Hooper, Jr. of Oveido, Florida, for antifraud and registration violations.


Litigation Release No. 21513 / May 4, 2010

Securities and Exchange Commission v. Seven Palm Investments, LLC, et al., Civil Action No. 1:10-cv-02755 (N.D. Ill.) (May 4, 2010)

The Securities and Exchange Commission filed a civil action today in the United States District Court for the Northern District of Illinois against Naperville, Illinois based Seven Palm Investments, LLC and its principal Peter P. Veugeler, together with Orlando, Florida based Cardiovascular Sciences, Inc., and Lawrence H. Hooper, Jr. of Oveido, Florida, for antifraud and registration violations.

According to the SEC's complaint, from at least October 2007 through September 2009, Veugeler reaped a total of more than $8 million from the pump and dumps of two unrelated companies, Cardiovascular Sciences and Emergent Health Corp. The SEC alleges that Veugeler, through his company Seven Palm, promised financing to both companies in exchange for nearly all their purportedly unrestricted shares. Veugeler, among other things, entered manipulative trades in both companies' stock, allowing Seven Palm to sell its stock holdings in both companies at artificially inflated prices.

The SEC's complaint further alleges that Cardiovascular Sciences and Hooper, Cardiovascular Sciences's president and CEO, disseminated false and misleading press releases and other correspondence to investors between October 2007 and February 2008. The complaint also alleges that Veugeler reviewed and discussed with Hooper a number of the false press releases and directed him to work with a third-party stock promoter to issue the press releases to the public.

According to the SEC's complaint, Veugeler engaged in manipulative practices aimed at misleading the market to increase and maintain artificially high prices so Veugeler could resell Seven Palm's Cardiovascular and Emergent holdings for substantial gains.

The SEC's complaint further alleges that Veugeler devised a Cardiovascular promotional campaign to facilitate Seven Palm's liquidation of its Cardiovascular shares and that many of the Defendants' public misrepresentations and omissions concerned Seven Palm providing funding to Cardiovascular. The complaint alleges that public statements regarding Seven Palm providing funding to Cardiovascular were misleading because at the time they were made, Seven Palm had not provided any funding to Cardiovascular.

As alleged in the SEC's complaint, the defendants violated 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. The complaint seeks a judgment against all defendants providing for injunctions, and civil money penalties. The complaint also seeks disgorgement of ill-gotten gains with prejudgment interest against Seven Palm, Veugeler, and Cardiovascular Sciences, and penny stock bars against Veugeler and Hooper.


See Also: SEC Complaint
http://www.sec.gov/litigation/complaints/2010/comp21513.pdf

http://www.sec.gov/litigation/litreleases/2010/lr21513.htm