BURN THOSE POS'S!!!! ****MUST READ***:
WOW SEC is going after penny CEO's for false claims.
=DJ SEC Accuses Ex-CEO Of Military Products Co. With Fraud
09/26/2006
Dow Jones News Services
(Copyright © 2006 Dow Jones & Company, Inc.)
By Siobhan Hughes
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The Securities and Exchange Commission on Tuesday charged the former chief executive of US Global Nanospace Inc. with selling almost $1 million of company stock in 2003 and 2004 after lying about the prospects for products such as a reinforced cockpit door and armor for military vehicles.
John Robinson, who stepped down as chief executive in August 2005, was charged with making untrue statements, fraud and failing to disclose material information. His wife, Julie Seaman, the company's former chief financial officer, was charged with selling more than $300,000 of US Global stock after prices rose on the misleading press releases.
The SEC said that Robinson authorized press releases in 2003 indicating that US Global's reinforced cockpit door, known as the Guardian, was in the process of receiving approval from U.S. authorities and was being ordered by some airlines. Instead, the SEC said, the Federal Aviation Administration didn't authorize US Global to sell the door, which was never produced on a commercial basis.
The same year, Robinson also approved press releases announcing that the Pentagon's Defense Logistics Agency was assigning a so-called national stock number to a US Global gun turret called the SAG, the SEC said. Such numbers are assigned to items that are repeatedly bought and stocked by the federal government, indicating that the military has evaluated a product and decided to buy it on a regular basis. However, no government agency was trying to assign a stock number to the SAG turret, the SEC said.
Robinson also approved another press release announcing that armored panels to be used in Humvee doors and other military vehicles were available for shipment, the SEC said. The release failed to disclose that the panels hadn't undergone the prerequisite testing and that US Global hadn't received any orders, according to the SEC.
Since US Global had little cash, it paid all its employees with stock, the SEC said. From April 2003 through January 2004, Robinson and Seaman sold stock after the press releases sent shares up to as much as $1.22, from as little as 25 cents the day before the first misleading press release was issued in March 2003, according to the SEC.
An attorney for Robinson and Seaman couldn't immediately be located for comment.
-By Siobhan Hughes, Dow Jones Newswires; 202-862-6654; siobhan.hughes@dowjones.com
(END) Dow Jones Newswires
09-26-06 1416ET
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