Currently, there are two claims against the Company.
The first complaint was filed on November 19, 1998 by Great White Marine
and Recreation, Inc., (Great White) and Colin Alvis Smith against FWEB and Lynn
Duke in the 74th Judicial District Court of McLennan County, Texas. The suit
claims that FWEB and Ms. Duke defamed the plaintiffs by publishing information
alleging that the plaintiffs had engaged in dishonest and criminal acts. The
allegedly defamatory statements were published by FWEB on its StockDetective.com
web site on October 29, 1998 and November 2, 1998. The plaintiffs claim
unspecified damages. FWEB management believes that it has meritorious defenses
and that it will successfully defend the suit.
The second complaint was filed by Ziasun Technologies, Inc. against FWEB
and Lynn Duke in the Circuit Court for Seminole County, Florida on or about June
3, 1999, and alleges that FWEB and Ms. Duke defamed the plaintiffs by publishing
an article on its Stock Detective web site on April 28, 1999 indicating that
Ziasun misled investors, concealed information and otherwise engaged in improper
conduct. The Plaintiff claims unspecified damages. FWEB management believes that
it has meritorious defenses and that it will successfully defend the suit.
From SEC Digest:
TEMPORARY RESTRAINING ORDER ISSUED AGAINST GREAT WHITE MARINE AND RECREATION, INC. AND A. COLIN SMITH
On July 28, Judge Walter Smith, United States District Judge for the Western District of Texas, granted the Commission's request for emergency action and issued a Temporary Restraining Order halting the fraudulent activities of Great White Marine and Recreation, Inc. (Great White) and its president and chief executive officer A. Colin Smith (Smith). The Court also ordered that Smith and Relief Defendant Kenneth Ursrey provide an accounting of all investor monies received; that Great White and Smith effect no transactions in Great White or any other company's securities; and that the company make no expenditure or transfer of funds except as reasonably necessary for the operation of the company. Smith will also not participate in management of Great White, pending the Court's consideration of the Commission's motion for preliminary injunction.
According to the Commission's complaint, Great White, in a scheme devised and effectuated by Smith, engaged in a massive unregistered distribution of 14 million Great White shares for which the company received approximately $11 million. From these monies, Smith misappropriated approximately $3.5 million for his own personal benefit. In connection with its unregistered distribution, Great White, in a Form 10SB registration statement filed with the Commission, and in various press releases, promotional brochures and postings to the company's internet website, made false and misleading statements concerning its financial condition and business prospects; purported audits of the company's financial statements; the sales of and the number of Great White shares issued and outstanding; and the background of its officers, directors and principal management.
In its complaint, the Commission alleges that defendants violated Sections 5(a) and (c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The Commission also seeks an order permanently enjoining Great White and Smith, an order requiring disgorgement of all wrongfully obtained profits, with prejudgment interest, and civil penalties. The Court has set for hearing on August 23, 1999 the Commission's request for a Preliminary Injunction.
Simultaneously with the filing of its civil lawsuit, the Commission also instituted a public administrative proceeding against Great White pursuant to Section 12(j) of the Exchange Act. In the administrative proceeding, the Commission seeks to revoke Great White's securities registration. The administrative proceeding is based on the conduct identified above. [SEC v. Great White Marine and Recreation, Inc., and A. Colin Smith, et al., W99CA230, USDC, WDTX, Waco Division] (LR-16225)
sec.gov
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