Tough position for shareholders caused once again by management of companies... While Pugs did advise us that Planet Sports was a big company...it in fact was/is owned by Raabe...
SEC SUES ARETE INDUSTRIES, INC. F/K/A TRAVIS INDUSTRIES, INC., STEPHEN CAYOU, JEFFREY SKINNER AND THOMAS RAABE FOR FALSE AND MISLEADING PRESS RELEASES
The Commission filed a complaint charging Arete Industries, Inc. (Arete), a microcap company, and three former or current officers with misrepresenting the status of a planned acquisition and the business prospects of that acquisition target. The three officers
are Thomas P. Raabe, Arete's current chairman and chief executive officer, Stephen E. Cayou, then its president, and Jeffrey R.
Skinner, then its chief financial officer.
The complaint alleges that, from approximately January through March 1998, Arete, then known as Travis Industries, Inc., and the three officers violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder by falsely representing in press releases: (1) that
Planet Sports, Inc., a private entity that Arete had tentatively agreed to acquire, had reached a preliminary agreement to acquire a private sports apparel company, Next Level Sportsystems, Inc. (Next
Level); (2) that Next Level had accounts with, orders in hand from, or would soon become a confirmed vendor for J.C. Penney & Co. and other major retailers; and (3) that Next Level would achieve sales for 1998 of over $10 million and, by the year 2000, sales in excess of $60 million. The complaint alleges, moreover, that the respondents failed to timely issue a corrective press release when
they received additional information contradicting prior press releases. Finally, the complaint alleges that, from January 1988 to April 1999, Arete violated Section 15(d) of the Exchange Act and Rules 15d-1 and 15d-13 thereunder by failing to file, or filing late, at least 37 required periodic reports and that Cayou and Skinner caused these violations.
The complaint, filed in the U.S. District Court for the District of Colorado, seeks to permanently enjoin Arete, Raabe, Cayou, and Skinner from further violations of Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder.
Additionally, the complaint seeks to enjoin Arete, Cayou and Skinner from violating Section 15(d) of the Exchange Act and Rules 15d-1 and 15d-13 thereunder. The complaint also seeks civil penalties in regard to all defendants. [SEC v. Arete Industries, Inc., et al.,
Civil Action No. 99B1487, D. Colo.] (LR-16235)
BOULDER, Colo.--(BUSINESS WIRE)--Aug. 13, 1999--Arete Industries, Inc. (OTC BB: AREE) today supplemented its Aug. 4, 1999, release responding to the recent SEC complaint against it, two former officers/directors and its current chairman and CEO.
The Company has only recently received the SEC complaint and is still reviewing it. Counsel will be reviewing the evidence available from the SEC investigation and likely will be filing a response within the next sixty (60) days. Counsel also intends to confer with the SEC staff informally to determine whether a prompt resolution of the matter is possible. The SEC's complaint concerns certain press releases made by former management of the Company in February of 1998 relating to a proposed merger with an entity owned by Mr. Raabe, the Company's current CEO. The SEC complaint also addresses late and non-filing of certain of past annual and periodic financial reports by former management.
The Company, Mr. Raabe and the prior management cooperated with the SEC in its investigation.
There is no suggestion in the complaint that either the Company, Mr. Raabe or the former officers/directors benefited from the press releases. The press release at issue was based on information that was reasonably believed to be reliable and accurate. The Company also issued a clarifying release.
The Company believes that other than the distraction to management and the defense costs, the case will not have a material impact on the day-to-day business nor the present or future prospects of the Company or its subsidiaries. Further, based on advice of counsel, the Company does not plan to issue further releases nor will endeavor to make more specific information available to the public in the immediate future concerning the case.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays beyond the company's control with respect to market acceptance of new technologies or products, delays in testing and evaluation of products and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.
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CONTACT: Stock Enterprises
Investor Relations Contact:
James Stock, 702/614-0003
KEYWORD: COLORADO |
