Because of a press release?
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Item 1. Legal Proceedings
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On May 7, 1998, the SEC filed a civil action (SEC vs. Golden Eagle International, Inc., et al, No. 98-Z-1020 [D. Colo.]) against Golden Eagle; Golden Eagle's former president (who resigned in May of 1996); Registrant's current secretary/treasurer and a director; Golden Eagle's former public relations firm (which had not performed work for Registrant since before May 1996); and two individuals, regarding acts which had occurred between 1994 and mid-1996. Among the allegations made in the SEC's complaint were that Golden Eagle and the individuals involved had issued press releases which were false and misleading in an attempt to hype the value of Golden Eagle's stock.
On November 14, 1998, the SEC filed an Amended Complaint in the above-referenced action. That complaint alleged that the company and its president had an inadequate basis for making the May 22, 1998, press release regarding a geological report that Golden Eagle had received from an independent geophysicist and mining engineer regarding the Cangalli gold deposit.
In February 1999, Golden Eagle entered into a Consent and Undertaking, neither admitting nor denying any of the allegations in the SEC's action, but resolving any and all issues as to the SEC's Complaint and Amended Complaint as they relate to Golden Eagle International, Inc., by agreeing to the issuance of a Permanent Injunction not to violate certain securities laws in the future. Pursuant to that Consent and Undertaking, on March 4, 1999, the Federal District Court for the District of Colorado entered a Final Judgment of Permanent Injunction ordering the company not to violate certain securities laws in the future. Golden Eagle was not assessed any civil or monetary penalty.
The Company has also been advised that on June 30, 1999, its former president, Ronald A. Knittle, who resigned in May 1996, and its current corporate secretary, Mary A. Erickson, entered into a consent agreement with the Central Office (Denver, Colorado) of the Securities and Exchange Commission to settle all allegations against them in the above pending civil action. Mr.Knittle and Ms. Erickson neither admitted nor denied any of the allegations in the SEC's complaint, but to resolve the situation they consented to the issuance of an injunction against future violations of certain securities laws and an order for disgorgement. The consent agreement is not binding on the SEC until approved by the full Commission and the Federal District Court.
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The only defendant remaining in the SEC's civil action is Golden Eagle's president, with the only issue remaining bearing on the Company's May 22, 1998, press release regarding its receipt of a geological report on its Cangalli gold deposit. Negotiations are currently underway for the settlement of this last allegation,and the Company's president strenuously denies any wrongdoing that may be actionable under federal securities laws.
There are no other material pending or threatened legal proceedings except as disclosed in Golden Eagle's annual report on Form 10-KSB for the year ended December 31, 1998.
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