Technigen, Ex-President and Others Charged With Inflating Stock
1998-04-29 17:29 (New York)
Technigen, Ex-President and Others Charged With Inflating Stock
Washington, April 29 (Bloomberg) -- Technigen Corp., its
former president and five other defendants were charged with
making more than $3.8 million by manipulating the price of the
Canadian company's shares and another microcap stock.
The Securities and Exchange Commission alleged that Lawrence
J. Nesis, former president of the British Columbia-based casino
operator, conspired with the others to prop up the price of
Technigen and TV Communications Network Inc. stock while they
flooded the market with unregistered shares in the early 1990s.
The suit, filed in a Denver federal court, also named
Douglas E. Mallach and David J. Dambro, public relations
consultants in Colorado; Glen T. Vittor and his brokerage firm,
Sovereign Equity Management of Boca Raton, Florida; and Morton J.
Glickman, who owned a firm with Mallach and Dambro.
This is the third time this month that Vittor or his firm,
in separate cases, have been charged by regulators with colluding
to drive stock prices up or down.
Mallach's attorney, Arthur Salzberg in Washington, said his
client has ``substantial defenses on the merits of this case, but
he will cooperate with the SEC to resolve its complaint.''
Attorneys for the other defendants either had no comment or
could not be reached.
The SEC alleged that Mallach and Dambro, who were hired to
provide public relations services to Technigen and TV
Communications, orchestrated the scheme and made a total of $3.8
million from the scheme. Julie Lutz, an SEC trial counsel, said
the commission isn't sure how much the other defendants made
illegally.
In a related case, a Denver brokerage, Schneider Securities
Inc.; its former compliance officer and current national sales
manager Barry Tull; and former Schneider broker Paul Pinholster
settled SEC charges that they helped manipulate Technigen stock.
In the Schneider case, the SEC alleged that the men
distributed more than 10 million shares of Technigen stock and
engaged in prearranged trading between accounts.
Schneider agreed to pay a $75,000 fine, Tull agreed to a
$5,000 fine, and Pinholster agreed to be barred from associating
with a registered broker dealer. They neither admitted nor denied
the allegations. Their attorneys could not be reached.
In the other case, involving Technigen, the SEC alleged that
the defendants fraudulently boosted the price of Technigen's
stock by distributing brochures that misrepresented its business
operations. Additionally, the SEC said Technigen made false and
misleading filings with the SEC from January 1992 through May
1993.
The SEC said the defendants kept the price of TV
Communications stock up by engaging in manipulative trading
practices, such as matched trading -- where two parties
prearrange to buy and sell issues back and forth to give the
appearance of demand for the shares.
Both stocks remained in the $2 to $4 range during the
manipulative scheme despite ``substantial increases in the
outstanding shares of both companies resulting from unregistered
distributions,'' the SEC said.
Both Technigen and TV Communications shares now trade for
less than a penny.
The SEC didn't file charges against TV Communications
Network, an Englewood, Colorado-based wireless cable company.
Lutz said the investigation is continuing.
The commission is seeking return of ill-gotten gains and
civil penalties from each of the defendants except for Technigen.
Vittor was charged by the SEC last week in connection with
an alleged $6.5 million scheme to inflate Alter Sales Co.'s stock
by using false press releases and a fictitious foreign investor.
He is contesting those charges, according to the SEC.
The National Association of Securities Dealers, an industry
group that polices U.S. brokers and runs the Nasdaq Stock Market,
filed a complaint against Vittor and Sovereign Equity Management
earlier this month. NASD alleged they took part in a scheme to
drive down prices for stocks sold by another firm, eventually
running the rival out of business.
Vittor's lawyer in that case did not return a call seeking
comment.
--Liz Skinner |
