flaflyers, Good. I'm all for these scumbag MFer pinksheets being busted. I put a little in when it was making a move a few weeks ago, made a small profit quickly and got back out. Their PRs were a joke.
U.S. SECURITIES AND EXCHANGE COMMISSION FTRM Litigation Release No. Civil Action 09 Civ. 903 (JSR) (SDNY) SEC v. Forest Resources Management Corp., et al., Civil Action 09 Civ. 903 (JSR) (SDNY) Securities and Exchange Commission Charges Forest Resources Management Corp. with Fraud The Securities and Exchange Commission ("Commission") announced today that it filed a complaint in the United States District Court for the Southern District of New York alleging that Forest Resources Management Corp. ("Forest"), Chaim Justman ("Justman"), William J. Reilly ("Reilly"), and Pinchus Gold ("Gold") defrauded investors, and reaped approximately $800,000 in unlawful profits by fraudulently procuring unlegended, purportedly free-trading shares of Forest stock, and then selling these shares to the investing public after Forest's false and misleading material misrepresentations and omissions about its business operations artificially increased demand for that stock.
According to the Complaint, Forest is and was a public shell company that at all relevant times had no income or assets. From June through October 2006, Reilly, Justman and Gold acted together to make material misrepresentations to Forest's transfer agent that provided false justification for the transfer agent to issue millions of restricted shares to Justman, Reilly, Gold, their nominees and others without the required restrictive legend. Justman, Reilly, Gold and their nominees were thus free to, and did, place these unlegended shares in brokerage accounts they controlled, and sold many of these shares in the open market, falsely holding them out to the public as free-trading shares, when in fact the shares were restricted stock. A registration statement was never in effect for these transactions in Forest's stock
The Complaint further alleges that Justman, Reilly and Gold sold more than a million shares of the improperly unlegended shares to the investing public, after Forest, Justman, and Reilly began issuing a series of false statements to the investing public regarding Forest's assets and commercial prospects. For example, Forest, through Justman and Reilly, misrepresented in a filing with the Commission and in press releases that Forest, based on a share exchange agreement that it had purportedly entered into with a company called Opus Management Group, Ltd., held valuable timber properties in Central and South America. These statements were false because Forest had not entered into any signed agreement with Opus, and because Opus had not direct or indirect ownership of timber properties.
Reilly is a New York City attorney living in Boca Raton, Florida. Justman and Gold both live in Brooklyn, New York.
The Commission's complaint charges Forest, Justman, Reilly, and Gold with violations of Sections 5(a) and 5(c) of the Securities Act of 1933, 15 U.S.C. §§ 77e(a) and 77e(c), and with violation of Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 77j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5.
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