The "other" New Mexico company in the news: "Securities and Exchange Commission v. Solv-Ex Corporation, et al., Civil Action No. Civ. 98-860-LH (USDC D.
New Mexico)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16502 / April 5, 2000
Securities and Exchange Commission v. Solv-Ex Corporation, et al., Civil Action No. Civ. 98-860-LH (USDC D.
New Mexico)
The Commission announced today that on March 31, Judge Bruce D. Black of the District of New Mexico issued
a ruling that Solv-Ex Corporation, a New Mexico company, its chief executive officer, John S. Rendall, and the
company's vice-president, Herbert M. Campbell II engaged in a pattern of issuing fraudulent statements that
created the false impression that each of three technologies being developed by the company were unqualified
successes.
Judge Black made findings that from 1995 though 1997, Solv-Ex, Rendall and Campbell represented that the
company's plant in Alberta, Canada had developed operational technology which produced salable bitumen from
oil sands on a commercial scale, that this bitumen extraction process also yielded industrial minerals of marketable
quality and volume, and that Solv-Ex had successfully tested a revolutionary electrolytic cell capable of producing
metallic aluminum. Judge Black ruled: "Collectively read, the press releases, shareholder letters, and other
statements, which Defendants disseminated on a virtually weekly basis, created the false impression that Solv-Ex
was on the verge of generating revenues from each of the three technical areas described above. In fact, the
evidence demonstrates that at the time these statements were disseminated, Solv-Ex was in various stages of
research and development with respect to each of those three technologies, but that commercial exploitation of any
of them was never more than a theoretical possibility." In his opinion, Judge Black concluded that Rendall
controlled all aspects of Solv-Ex's business and was responsible for the company's misleading and incorrect
statements. Similarly, the Court found that Campbell had access to all of the negative information about the
company's technology testing but chose to ignore that information in drafting press releases which created a
misleadingly optimistic picture of Solv-Ex's prospects.
While Solv-Ex, Rendall and Campbell were disseminating these false and misleading statements, the price of the
company's stock, which traded on the Nasdaq Small Cap Market, rose from approximately $5 per share to as
high as $38 per share.
Judge Black ruled that Solv-Ex and Rendall violated the antifraud and issuer reporting provisions, Section 17(a) of
the Securities Act of 1933, Sections 10(b) and 13(a) of the Securities and Exchange Act of 1934 and Rules
10b-5, 12b-20, 13a-1 and 13a-13 thereunder, and Campbell violated the antifraud provisions and aided and
abetted Solv-Ex's reporting violations. The Commission seeks injunctions against Solv-Ex, Rendall and Campbell
as well as civil money penalties against Rendall and Campbell.
sec.gov
Last update: 04/06/2000 " |
