From taday's SEC Digest:
SEC CHARGES FOUR INDIVIDUALS WITH RESELLING UNREGISTERED SYSTEMS OF EXCELLENCE SECURITIES; SETTLEMENTS INCREASE RECOVERY FOR VICTIMS TO OVER $15 MILLION
The Commission filed a lawsuit on January 15, 2001, against four defendants to recover ill-gotten gains they realized when they resold unregistered Systems of Excellence, Inc. (SOE) securities into an artificially inflated market that was being manipulated by others. Three of defendants were also charged with insider trading in connection with those same transactions. Named in the complaint are: Maria Iacovelli, SOE's corporate secretary and board member; Richard Morrisey, a bookkeeper who performed in-house accounting services for SOE in 1995 and 1996; Jerry Thornthwaite, a medical doctor and researcher who provided marketing services to SOE in 1996; and Marvin Kogod, an investor in SOE's so-called "private placement" who realized a $283,372 windfall when he resold SOE shares in June1996.
According to the complaint, each Defendant unlawfully resold Software of Excellence, Inc. a.k.a. Systems of Excellence, Inc. securities through unregistered, non-exempt transactions in violation of the strict-liability registration provisions contained in Sections 5(a) and 5(c) of the Securities Act of 1933 (Securities Act). Additionally, Defendants Iacovelli, Morrisey and Thornthwaite resold certain of their respective securities while in possession of material non-public information, violating the antifraud provisions contained in Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rule 10b-5. Collectively, Defendants reaped over $1.7 million in illegal trading profits.
Simultaneously with the filing of the complaint, Iacovelli, Thornthwaite and Kogod, without admitting or denying the SEC's allegations, consented to the entry of court orders that: (i) permanently enjoin Iacovelli and Thornthwaite from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Sections 5(a) and (c) of the Securities Act; (ii) permanently enjoin Kogod from violating Sections 5(a) and (c) of the Securities Act; (iii) require Iacovelli to disgorge $519,057 plus prejudgment interest of $222,199, provided that all but $45,000 shall be waived and no penalties assessed based on her inability to pay; (iv) require Thornthwaite to disgorge $631,959 plus prejudgment interest of
$270,530, provided that all shall be waived but for the payment of $83,500, the surrender of 100,000 shares of Periotec stock and 5,000 shares of Medium 4.Com Inc. stock, and the liquidation or assignment of a certain Merrill Lynch annuity to the Court-appointed Receiver, and no penalties assessed based on his inability to pay; and (v) require Kogod to disgorge $283,372. [SEC v. Maria Iacovelli, Richard Morrisey, Jerry Thornthwaite, and Marvin Kogod, Civil Action No. 1:01CV00344, GK, D.D.C.] (LR-16901)
sec.gov
See also the next post on this thread and Message 15360115 |
