COMMISSION SETTLES PUBLIC ADMINISTRATIVE PROCEEDINGS AGAINST MICHAEL REHTORIK
On November 4, the Commission instituted and simultaneously settled public administrative proceedings, pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act), against Michael W. Rehtorik (Rehtorik). In the Order, the Commission barred Rehtorik from participating in any offering of penny stock. The Order finds that on October 22, 1999, the U.S. District Court for the Eastern District of Tennessee permanently enjoined Rehtorik, by consent, from further violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The permanent injunction followed a civil action initiated by a complaint filed by the Commission on September 23, 1998, alleging that Rehtorik, the Managing Director and Director of Strategies and Investor Relations for Genesis International Financial Services, Inc. (Genesis) promoted the stock of Genesis through fraudulent Commission filings and company press releases.
The complaint further alleges that once the price of the stock had been inflated artificially through his efforts, Rehtorik and others sold Genesis stock through nominee accounts, then booked a portion of the proceeds as income to Genesis. (Rel. 34-42097; File No. 3-10090)
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