SEC Files Complaint Against Jag Media Former CEO Valinoti By Carol S. Remond Of DOW JONES NEWSWIRES
29 September 2005
Dow Jones News Service
(c) 2005 Dow Jones & Company, Inc.
NEW YORK (Dow Jones)--The Securities and Exchange Commission sued Gary Valinoti Thursday, alleging that the former chief executive officer of Jag Media Holdings Inc. (JAGH) engaged in unregistered sales and transfers of securities.
Without admitting or denying the allegations contained in the SEC complaint, Valinoti agreed to settle the charges and consented to a final judgment that permanently enjoins him from violating securities laws. Under the deal, Valinoti agreed to disgorge about $2.9 million in illicit gains and to pay $1.39 million in pre-judgment interests.
In a complaint filed with the U.S. District Court for the District of Columbia, the SEC said that Valinoti purchased 250,000 shares of a public shell in which he was reverse merging his company, then known as Jag Notes, in an unregistered transaction. The commission said Valinoti netted an improper profit of $1.83 million by selling stock between March and April 1999. The complaint also alleges that Valinoti transferred shares in consideration for an ownership interest in another company and used 6,000 shares to compensate a public relations firm that worked for Jag Notes.
Under the settlement agreement, Valinoti agreed to pay $50,000 in cash, to cancel his holdings of Jag Media securities valued at about $421,700 and to relinquish options to purchase shares of Jag Media valued at about $100,000 as partial payment of $2.9 million disgorgement order.
Jag Media has gone through a series of recapitalizations over the last couple of years while it sued more than 100 brokerage firms over alleged illegal short selling of its stock, a practice known as naked short selling. Jag Media and Valinoti sued over 100 brokerage firms, investment firms and financial institutions in 2002, alleging that the firms had entered into a conspiracy to illegally short sell the company's stock. A judge dismissed the suit last September finding that the company didn't have a viable claim.
(Carol S. Remond is an award-winning columnist and one of four who write the "In The Money" feature. Most recently, she won a 2005 Gerald Loeb Award for best news service content with a series of articles on three companies titled "Exposing Small-Cap Fraud.")
-By Carol S. Remond; Dow Jones Newswires; 201 938 2074; carol.remond@dowjones.com [ 09-29-05 1654ET ] |
