From today's Palm Beach Post (thanks to the SI poster HandsOn for spotting this article - see #reply-15065618 ):
Saf T Lok chairman, ex-CEO fined
By Stephen Pounds, Palm Beach Post Staff Writer
Thursday, December 21, 2000
WEST PALM BEACH - The chairman and a former chief executive of West Palm Beach-based Saf T Lok Inc. have been fined $55,000 each for lying to investors and to the Securities and Exchange Commission about sales and financial dealings in 1997 and 1998, the SEC said Wednesday.
The SEC's two-year investigation into allegations of fraud involving the company ended Wednesday when Saf T Lok and the two executives agreed to settle a lawsuit filed by the SEC earlier in the day. The suit was filed in U.S. District Court in Miami.
The SEC alleged the company, its founder and Chairman Frank Brooks and former Chief Executive John Gardner provided investors with misleading information about sales, consulting deals and contracts through news releases and SEC filings.
"These disclosures described agreements that, if bonafide, would have resulted in the sale of millions of dollars of Saf T Lok's products," the SEC said.
Some of the violations stem from deals Saf T Lok made with Sholam Weiss, who was convicted last year of racketeering and fraud in connection with the collapse of National Heritage Life Insurance. He was sentenced in absentia to 845 years in prison. Authorities are now trying to extradite him from Austria.
Weiss was not sued by the SEC.
According to the SEC, the company lied about these deals:
Saf T Lok entered into a consulting deal in 1997 with A.B. & Associates of Monsey, N.Y., for $250,000. A.B. was a "shell company" without clients owned by Arthur Braun, a friend of Weiss. Weiss required the consulting deal as part of a $3 million offshore placement of stock he arranged for Saf T Lok. United Safety Action, another Braun company, agreed in 1998 to act as a Saf T Lok distributor and buy $20 million in gun locks. United Safety didn't have the financing to complete the deal.
Saf T Lok signed a contract in 1998 with New York-based Semiconductor Laser International Corp. to design a fingerprint identification-based gun lock when it couldn't afford to finance the project.
Brooks and Gardner authorized Saf T Lok to pay $5,000 to an unidentified securities analyst to write a trumped-up forecast about Saf T Lok that was later distributed by State Street Securities in New York, now known as Taylor Stuart Financial.
Saf T Lok (Nasdaq: LOCK) closed at 25 cents, unchanged.
stephen_pounds@pbpost.com
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