From today's SEC Digest:
SEC ORDERS PENNY STOCK BARS AGAINST TWO BUSINESS CONSULTANTS
On November 16, the Commission ordered that two New York-based business consultants, Joseph M. Blumenthal and George W. Guttman, be barred from participating in future offerings of penny stocks, pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934. The Commission ordered that Blumenthal be permanently barred from such activity and that Guttman be barred with a right to reapply in five years. The respondents consented to the entry of the Orders.
The Commission's bars were based upon the recent entry of permanent injunctions against Blumenthal and Guttman for selling unregistered securities in violation of Section 5 of the Securities Act of 1933. In SEC v. Donald John Christensen, II et al., H-01-3203 (S.D. Tex.), the Commission alleged that, during the spring and summer of 1998, Mountain Energy's CEO issued over 10 million shares of the company's stock to Blumenthal, Guttman and a third individual, now deceased, who immediately sold the shares to the public. No registration statement was in effect as to those shares and no exemption from the registration requirements of the securities laws was available for these transactions. Blumenthal and Guttman, in settlement of the Commission's action, consented to the entry of an order of the U.S. District Court enjoining them from future violations and ordering them to pay a total of $1.35 million in disgorgement of illegal profits. Litigation against the remaining defendants in SEC v. Christensen is ongoing. For additional information, see Litigation Release No. 17144 (September 20, 2001). (In the Matter of George W. Guttman, Rel. 34-45069, File No. 3-10641); (In the Matter of Joseph M. Blumenthal, Rel. 34-45070, File No. 3-10642)
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