CHST old ir-->Continental Capital's Manion Sentenced to 15 Months for Fraud
By David Evans
New York, Sept. 24 (Bloomberg) -- John Manion, owner of Continental Capital & Equity Corp., a Florida-based financial public relations company, received a 15-month federal prison sentence and a $100,000 fine for cheating investors of a client company, Legend Sports Inc., between 1995 and 1998.
Manion was sentenced Friday in U.S. District Court in Brooklyn, New York, by Judge Nina Gershon. Manion, 52, of Longwood, Florida, still faces criminal charges in Florida in connection with the Legend Sports fraud. His attorney, Sean O'Shea, didn't return telephone calls seeking comment.
Manion founded Continental in 1992. Some publicly traded companies, like Legend Sports, paid Continental to write and distribute favorable articles about them to investors on its Web site, www.insidewallstreet.com, and in newsletters with the same name. Continental says its 1999 profits exceeded $3 million.
Legend Sports, which developed and operated golf facilities in Central Florida, raised $18 million from investors between from 1994 to 1996. The Securities and Exchange Commission halted trading in the shares after alleging the company operated as a Ponzi scheme, using money from new investors to pay returns to earlier investors.
On July 21, Manion settled unrelated insider trading charges filed by the SEC by agreeing to pay $40,186 and not commit securities fraud in the future. He didn't admit wrongdoing in that case, in which he was accused of illegally trading shares of Bio- Dental Technologies Corp. before it was acquired by his client Zila Inc. of Phoenix, Arizona, in 1997.
In 1996, Manion and Continental settled SEC fraud charges relating to their public relations work for First Entertainment Corp., a movie producer, in 1992 and 1993. Neither Manion nor Continental admitted wrongdoing.
The SEC alleged that Continental distributed 400,000 copies of its 'Inside Wall Street' newsletter touting First Entertainment's stock without disclosing that Continental was paid in shares worth more than $700,000 to write the reports. Manion and Continental agreed not to commit securities fraud in the future.
When Manion resigned as president of Continental on July 14, the company said he would sell Continental to its employees within two weeks. Manion still owns Continental, said Dodi Handy, chief operating officer, in an interview Friday. Dodi said she expects the sale to be completed over the next 30 days.
Continental filed a registration statement with the SEC to sell one-third of the company to the public in 1998 for $14 million, shortly before Manion was charged with criminal securities fraud in Brooklyn. It never completed its initial public offering.
Continental has more than 30 corporate clients, including New Visual Entertainment Inc., Creative Host Inc. of San Diego, and Clearworks.net Inc., a fiber-optic network operator based in Houston. |
