FINAL THREE DEFENDANTS IN SYSTEMS OF EXCELLENCE LITIGATION SETTLE AND ORDERED TO PAY MORE THAN $2 MILLION FOR TOUTING AND DISSEMINATING MISLEADING INFORMATION IN INTERNET STOCK NEWSLETTER
The Commission announced that on July 7, Judge Gladys Kessler issued an order implementing a settlement with Theodore R. Melcher, Jr., SGA Goldstar Research, Inc., and Alpha Securities, Ltd. (collectively the Melcher Defendants), the remaining three defendants in SEC v. Charles O. Huttoe, et al. The Melcher Defendants agreed to settle the Commission's action, without admitting or denying the Commission's claims against them, by consenting to a permanent injunction against future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (Securities Act), Sections 10(b) and 17(b) of the Securities Exchange Act of 1934 (Exchange Act), and Exchange Act Rule 10b-5. As part of the settlement, the Melcher Defendants agreed to disgorge, jointly and severally, $3,300,015 plus prejudgment interest thereon; provided however, that after disgorging certain assets, including cash, securities, and real estate that are in the aggregate worth over $2 million, the remainder of their disgorgement obligation will be waived based upon their inability to pay more as demonstrated by the representations in their sworn financial statement. Including assets to be disgorged by the Melcher Defendants, the Commission will have recovered approximately $11 million from its enforcement actions related to the Systems of Excellence fraud. Melcher previously pled guilty to criminal charges arising from the same conduct. The settlement with the Melcher Defendants concludes the original civil litigation filed by the Commission in 1996 in response to the massive market manipulation perpetrated by Systems of Excellence, Inc. and others. (LR-16632; Civil Action No. 96-02543)
sec.gov |
