Hmmmm, no chance this could happen with our boys, is there?
Dec 21, 2007 (SECURITIES AND EXCHANGE COMMISSION RELEASE/ContentWorks via COMTEX) -- SPLT | charts | news | PowerRating -- In a complaint filed on December 20, the Commission alleged that, between late 2004 and early 2006, SpatiaLight, Inc. (SpatiaLight), its former CEO, Robert Olins (Olins), and Argyle Capital Management Corporation (Argyle), committed fraud, and violated the registration and reporting requirements of the federal securities laws. The Commission's complaint alleges that Olins realized more than $2.6 million in ill-gotten gains through his misconduct.
The complaint alleges that the defendants engaged in fraudulent, deceptive conduct and violated multiple regulatory requirements in the following three sets of circumstances:
* In July 2005, SpatiaLight and Olins filed with the Commission forged auditor consents as exhibits to registration statements, falsely reporting that SpatiaLight's former auditor had authorized SpatiaLight to incorporate by reference its audit reports for certain fiscal years.
* In August 2005 and February 2006, Olins sold shares of SpatiaLight stock on the basis of material, non-public information. For example, as alleged, Olins' August 2005 sales came just one day after SpatiaLight's former auditor sent a letter demanding that SpatiaLight withdraw the registration statements containing the forged auditor consents.
* SpatiaLight, Olins and Argyle engaged in an unregistered distribution of hundreds of thousands of shares of SpatiaLight stock. In January 2005, SpatiaLight issued to Argyle 423,264 shares, which Olins instructed SpatiaLight's transfer agent to issue without restrictive legend. Within weeks of receiving the shares, Argyle assigned the shares to Olins, who, between April and June 2005, sold the shares out of an E*Trade account, resulting in proceeds of more than $2.6 million. According to the complaint, when Olins opened the E*Trade account, he falsely represented that he was not an officer, director or 10 percent shareholder of a publicly-traded company. Olins and SpatiaLight made material misrepresentations in filings made with the Commission concerning these unregistered sales. The complaint also alleges that Olins did not report, or failed to timely report, the sales of more than 700,000 shares of SpatiaLight stock.
Based on the conduct alleged in the complaint, the Commission charges that SpatiaLight and Olins committed securities fraud in violation of Section 17(a) of the Securities Act of 1933 (Securities Act), Section 10(b) of the Securities and Exchange Act of 1934 (Exchange Act) and Exchange Act Rule 10b-5. As alleged, Olins also violated Exchange Act Section 10(b) and Rule 10b-5 thereunder by selling SpatiaLight stock on the basis of material, non-public information. The complaint also alleges that SpatiaLight violated, and Olins aided and abetted violations of, various reporting requirements for current reports, annual reports and proxy statements, as well as books and records and internal control provisions of the federal securities laws, including Sections 13(a), 13(b) and 14(a) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, 13a-11 and 14a-9. According to the complaint, Olins also violated Exchange Act Section 13(b)(5) by circumventing or failing to implement an accounting system, or by falsifying books and records, and Exchange Act Rule 13a-14, by filing false certifications to annual reports. Furthermore, as alleged, Olins violated the beneficial ownership reporting statutes, including Exchange Act Sections 13(d) and 16(a) and Exchange Act Rules 13d-2(a) and 16a-3. Finally, the complaint alleges that all the defendants violated the registration requirements of Sections 5(a) and 5(c) of the Securities Act.
The Commission is seeking a judgment permanently enjoining SpatiaLight, Olins and Argyle from violating the provisions of the securities laws specified above and ordering Olins and Argyle to disgorge ill-gotten gains with prejudgment interest against. The Commission also is seeking civil money penalties against all defendants and an officer-and-director bar as to Olins. [SEC v. Robert Olins, et al., Civil Action No. CV 07-6423 (MMC) NDCA] (LR-20411) |
