UNIVERSAL EXPRESS CHARGED WITH ILLEGAL STOCK DISTRIBUTION AND ISSUING FALSE PRESS RELEASES AND PERIODIC REPORTS
Today, the Commission filed a complaint seeking a temporary restraining
order (TRO) and other emergency relief against Universal Express, Inc.
(Universal), its chief executive officer Richard Altomare, and others
involved in an illegal distribution of Universal common stock to the
public. The Commission alleges that from April 2001 through the
present, Universal has issued more than 500 million shares of stock for
distribution to the public, issued a series of false press releases
regarding funding commitments for the company, and made other false and
misleading statements about its business.
The Commission alleges that Universal, Altomare, and Universal's counsel
Chris G. Gunderson, Jr., distributed stock through Mark Neuhaus, George
Sandhu, Spiga Limited, and Tarun Mendiratta (collectively, the
Resellers) purportedly as consultants to the company. According to the
Complaint, the Resellers paid Universal in excess of $9.1 million for
the stock, resold the shares to the public for a quick risk-free profit,
and then used the proceeds to finance their subsequent share purchases
in the ongoing scheme to distribute the shares into the public market.
The Complaint further alleges that as the dilutive issuances weighed on
Universal Express' stock price, Altomare issued a series of false press
releases from May 2002 to April 2003 announcing funding commitments for
a total of $885 million and thereafter made other false statements in
public interviews, press releases, and Universal Express' filings with
the Commission. The Commission further alleges that, following the
illegal sales to the Resellers, Altomare diverted a substantial portion
of the proceeds to family members and personal accounts.
The Commission's action seeks a temporary restraining order and order
for accounting against Universal, Altomare, and Gunderson for the
ongoing securities registration violations. The Commission is also
seeking preliminary injunctive relief against all defendants. The
Commission's action alleged that Universal, Altomare, Gunderson,
Neuhaus, and Sandhu violated the antifraud provisions of the securities
laws; that Universal, Altomare, Gunderson, and each of the Resellers
violated the securities registration provisions; that Universal violated
the reporting and books and records provisions; that Altomare and
Gunderson violated and aided and abetted such violations; and that
Altomare violated signed false certifications and made false statements
to Universal's auditors. [SEC v. Universal Express, Inc., et al., Civ.
Action No. 04 CV 02322 (GEL) SDNY] (LR-18636) |
