SEC Accuses PanWorld
Minerals,Others Of $9M
Securities Fraud
Dow Jones Newswires
WASHINGTON -- The Securities and Exchange
Commission accused PanWorld Minerals
International Inc. and seven individuals of
defrauding investors of more than $9 million in a
stock hyping scheme.
The SEC said Wednesday it filed a complaint on
June 2 in a federal court in Utah alleging that,
between 1989 and 1995, the chief executive of
PanWorld, Robert Weeks, and two other
employees, Kenneth Weeks and David Hesterman,
spread false and grossly exaggerated information
about the company's assets and operations in an
attempt to inflate its share price. At the same time,
the employees were selling their own shares into
the market for a profit of at least $6.4 million, the
SEC said.
Panworld, Salt Lake City, identified itself out as an
international mining concern. The SEC halted
trading of its securities in May 1995.
Others named in the complaint were Joseph Fabiilli
and Jerome Wenger of Puritan Communications
Inc. According to the SEC, Wenger touted
PanWorld's shares on his radio show and Fabiilli
made infomercials about the company. Neither,
however, disclosed that they received shares of the
company in return for their promotional efforts, nor
did they inform listeners that they were selling the
very stock they had advised purchasing, the
complaint said. Larry Krasny, of L.K. Management,
and Randall Gilbert are also accused of acting as
consultants in the fraudulent scheme.
Krasny, Fabiilli and Wenger realized illegal profits
of at least $3 million, the SEC alleged.
Several of the defendants are also accused of
market manipulation, including making wash trades
- creating the illusion of heavy activity in the stock -
and holding shares off the market to reduce the
supply.
''PanWorld fooled around in mining, but in reality
was mining the public,'' said Robert Fusfeld of the
SEC. He characterized the case as a ''classic hype
and dump scheme'' where the real business being
carried on was the duping of unsuspecting
investors.
An attorney for Panworld and its principals did not
return calls seeking comment. An attorney for
Fabiili and Puritan Communications had no
comment. |
