Concorde America Receives Wells Notice From SEC
By CAROL S. REMOND
Of DOW JONES NEWSWIRES
NEW YORK -- Once high-flying Pink Sheets company Concorde America Inc. (CNDD) has received a Wells notice from the Securities and Exchange Commission.
A financial report posted on Concorde America's web site shows that the SEC in early November told the company that it's looking to bring "a civil injunctive action" against it, its president Hartley Lord and a major shareholder named Mauricio J. Madero O'Brien.
Wells notices warn that regulators may file civil charges and give recipients a chance to defend themselves.
Dow Jones Newswires reported in August that the SEC had opened an investigation into Concorde America following the issuance of promotional press releases about the company and a sharp jump in its stock price.
According to Concorde America's report, the SEC is looking into filing charges relating to the sale of securities without proper registration and to the use of "manipulative and deceptive devices in connection with the sale of a security."
The financial report also shows that the SEC notified Concorde America that it "might seek against each a permanent injunction, civil penalties, and an accounting and disgorgement of proceeds, and an officer and director bar against Mr. Lord." According to the filing, Lord and O'Brien were "invited to make a voluntary response, generally known as a Wells Submission, to these proposed recommendations, which will be submitted to the Commission with the staff's recommendations."
Lord told Dow Jones Friday that this response had been made and that the company is "up to date with" the SEC. Lord declined to further comment on the SEC probe.
Concorde America's financial report shows that the company, Lord and O'Brien "believe that each acted in compliance with applicable law and that factual and legal reasons exist to cause the Commission not to act upon the staff's expected recommendations."
Lord told Dow Jones in August that the SEC had subpoenaed various records of the company, including incorporation papers and stock transfer sheets. The commission also interviewed Thomas Heysek, a financial newsletter writer who had penned a glowing report about Concorde America.
Concorde America was the subject of two "In The Money" columns in August that explored unusual trading in the company's stock and the odd circumstances surrounding the issuance of two promotional press releases. One column showed how some investors who bought 10 million shares of the company for 10 cents each this summer could have made millions of dollars if they sold their shares. The company, which has no real business yet to speak of, had a market capitalization of about $1 billion at one point.
The shares of Concorde America were recently trading at 19 cents. The company's stock topped at $8.90 on Aug. 11, just before the company disavowed two earlier press releases that touted its business prospects. The two releases issued in late July and early August appeared to have been issued by Concorde America and were distributed nationally by PRNewswire. But the company later said it did not authorize the issuance of the press releases.
The company was created in late June through a merger with a shell corporation called MBC Foods Corp. Concorde America's business plan is to hire people in Latin America to send to Europe as migrant workers.
According to the company's financial report, there are now about 114.3 million shares outstanding.
-By Carol S. Remond, Dow Jones Newswires; 201-938-2074; carol.remond@dowjones.com |
