Is this the old Don Rutledge from the "tower of gold" days?
7. SEC v. Donald Rutledge and Gregory Skufca
(U.S. District Court, District of Colorado)
In the Matter of John Black
(SEC Contact: Wayne Carlin, 212-748-8178)
The SEC alleges that Donald Rutledge, a Canadian promoter, and Gregory Skufca, an American shell company
broker, embarked on a scheme to take public a development-stage company, Plus Solutions, Inc., at $5.00 per
share without registering a public offering. Their plan was to increase Snelling Travel's float through a 29-for-1
stock split, and then merge Plus Solutions into Snelling Travel, an over-the-counter issuer. Rutledge and Skufca
intended to create the appearance of demand for the merged company's stock at prices of $5 or more per share,
and then sell large quantities of the stock to the public. The SEC alleges that Rutledge and Skufca began to carry
out the scheme, and engaged in some manipulative trading in the latter half of December 1999, which caused the
stock to trade at more than $5 per share, and John Black, an employee of Rutledge, commenced a message
"thread" (an area to post messages on a specific topic on an Internet bulletin board) about Snelling and posted
two misleading messages on it. The scheme was derailed, however, because Snelling failed to comply with the
NASD's notice requirements regarding stock splits. As a consequence of the resulting confusion over the
effective date of the split, the proposed merger fell apart, and Snelling's stock price plummeted to pennies per
share. The SEC seeks permanent injunctions against Rutledge and Skufca prohibiting violations of Section 17(a)
of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 under the
Exchange Act. The SEC also seeks disgorgement, plus prejudgment interest, against Skufca, and civil monetary
penalties against Rutledge and Skufca. Without admitting or denying the SEC's allegations, Black has consented
to the entry of an order requiring Black to cease and desist from committing or causing any violation and any
future violation of Section 17(b) of the Securities Act of 1933.
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