Rocky Mountain Energy Corporation Obtains Temporary Restraining Order to Recover 8 Million Stolen Shares
HOUSTON--(BUSINESS WIRE)--Oct. 2, 2002--Rocky Mountain Energy Corporation (OTCBB:RMEC) announced today that it has obtained a temporary restraining order in Salt Lake County Utah district court to freeze the account of Salvatore Russo, SOS Resources and related parties at Westminster Securities (broker), Phillip Louis Trading, Inc. and Hill Thompson Magid, LP (market makers). The action was taken to protect the public from the aggressive selling of 8,000,000 shares of company stock allegedly stolen by certain defendants in the action.
"We cannot allow our shareholders to be affected by stolen shares," said John N. Ehrman, president and CEO of Rocky Mountain Energy Corporation. "A Temporary Restraining Order to freeze the account and stop the sale of the stolen shares was obtained in a suit filed by RMEC against Salvatore Russo, SOS Resources, George Malina, Ronald Brooks and Marathon USA Corporation for fraud, securities fraud, conspiracy, racketeering, and disposing of stolen assets. The suit requests restitution of the shares and other relief." Westminster Securities, Phillip Louis Trading, Inc. and Hill Thompson Magid, LP are likewise defendants.
The Temporary Restraining Order prohibits any further sale of RMEC's securities from the accounts, or the use of the account to short RMEC stock.
"We took decisive action to maintain our shareholder value and return the market to normal conditions," said Ehrman. "Out of 9.3 million shares estimated in the float, freezing an estimated 6,000,000 shares remaining should return us as near to normal conditions as possible. The shares disposed of by Russo et al must be returned to the company as they were stolen without compensation to the company. Our shareholders have been damaged and the shares must be returned as the sales were illegal. Our investors will be able to focus on our oil and gas operations to enhance shareholder value with the confidence that the illegal activity has ceased."
In June 2002 RMEC entered into a credit agreement for $40 million with Marathon USA Corporation. The introduction to Marathon and Mr. Ron Brooks was made by George Malina who was originally brought to the company by Mr. Salvatore Russo of SOS Resources. A fee of $100,000 was paid to Marathon and 8,000,000 shares of stock issued to Marathon in contemplation of the closing of the loan. In late August 2002 a $3,000,000 check written by Marathon to the escrow in order to close an acquisition was returned "NSF" or nonsufficient funds. No attempt to make the check good has been made.
It was found that the due diligence materials provided to RMEC to induce it to pay over to Marathon $100,000 and the free trading shares were false and had been "cut and pasted" including a forged audit ostensibly by "Ernst & Young" and letters from Union Bank of Switzerland -- all of which were found to be false.
It was also discovered that Mr. Russo and Mr. Malina received a fee out of the $100,000 stolen by Marathon USA Corporation. Further investigation disclosed that 1.3 million of the 8,000,000 shares of stock escrowed in contemplation of the Marathon closing had been disposed of by Russo prior to the recent "dumping" estimated at 1.5 to 2 million shares.
Russo had an agreement to do investor relations with Marathon. In an effort to extricate itself from any party associated with Marathon, RMEC notified Russo that the shares needed to be returned to RMEC. Russo threatened to sell all of the shares on the market at once resulting in a major loss of shareholder value. Although RMEC notified Westminster Securities (Russo's broker), Phillip Louis Trading, Inc. and Hill Thompson Magid, LP (market makers) that they were selling stolen shares, over 2,000,000 shares were believed sold or "dumped" on the open market in a three-day period. According to RMEC, a source at Hill Thompson confirmed on Friday, Sept. 27, 2002, that they had 7,000,000 shares to sell with instructions to flood the market and "worry about the legalities later."
For further information call John N. Ehrman at 281/448-6500.
FORWARD-LOOKING STATEMENTS: This report contains certain forward-looking statements and information relating to the Company that are based on the beliefs of its management as well as assumptions made by and information currently available to its management. When used in this report, the words "anticipate," "believe," "estimate," "expect," "intend," "plan" and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. These statements reflect management's current view of the company with respect to future events and are subject to certain risks, uncertainties and assumptions. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected.
CONTACT:
Rocky Mountain Energy Corporation, Houston
John N. Ehrman, 281/448-6500
SOURCE: Rocky Mountain Energy Corporation
Today's News On The Net - Business Wire's full file on the Internet with Hyperlinks to your home page. URL: businesswire.com
10/02/2002 14:57 EASTERN |
