NA's PI broker-bait settles with SEC
Vancouver Stock Exchange VSE
Shares issued 0 1899-12-30 close $0
Monday Oct 4 1999
See National Bank of Canada (NA) Street Wire
by Brent Mudry
Promoter-turned-informer David Houge, who lured two Vancouver Stock Exchange brokers into the United States for a round of golf that landed them in the rough confines of a Seattle jail this summer, has reached a final settlement with the United States Securities and Exchange Commission. On Monday, the SEC disclosed a Sept. 30 consent settlement with Mr. Houge, barring him from association with any broker or dealer, participation in any penny stock offering and acting as an officer or director of a penny stock company.
The deal includes no fine or disgorgement. Mr. Houge's plea-bargain support was crucial to cracking his ring, and led to the arrests of PI brokers Dirk Rachfall and Michael Patterson by officers of the Federal Bureau of Investigation on June 29. The pair of Vancouver brokers were held in jail for a week before being released on bail.
The SEC now reveals that its partial final consent judgment for Mr. Houge was dated June 16 in the U.S. District Court for the Eastern District of New York. That day, two dozen alleged co-conspirators, including reputed members of the New York Russian mob and the Colombo crime family, were indicted in Mr. Houge's stock fraud scheme. Two weeks later, Mr. Houge called up his PI broker-associates for their fateful golfing trip.
The SEC notes that from May of 1995 through November of 1998, Mr. Houge and others orchestrated the manipulations of Auxer Industries, Legend Sports and Orlando Super Card and participated in the fraudulent sale of a private placement for City Services. "For each of Auxer, Legend and Orlando, Houge controlled the supply of the stocks, raised the price through orchestrated trades and paid undisclosed cash compensation to retail salespeople," states the SEC. (Readers wishing more details may refer to Streetwires dated July 5 and July 6, amongst others.)
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com |
