Predeccesor to MIDL mentioned (America's Coffee Cup). Is same mgt team in place? I noticed the CFO Marsik is the same.
SEC sues 55 people in massive penny-stock scheme
By Jeff Mamera
NEW YORK, Dec 18 (Reuters) - In one of its biggest-ever attacks on penny-stock fraud, the Securities and Exchange
Commission Thursday filed five separate civil suits in federal court against 55 people stemming from a 1996 undercover probe
into alleged bribery of penny-stock brokers.
The SEC, which also named two brokerage firms and one stock issuer in its suits, claimed the defendants paid more than $3.3
million to brokers who induced their customers to buy certain low-priced -- or penny -- stocks.
Four of the suits were filed in New York and a fifth in Utah. The SEC seeks repayment of the $3.3 million and to bar some of
the defendants from soliciting penny stocks to retail customers.
Eight of those defendants were among 45 who were charged in criminal court in 1996 following a sting operation in which
federal agents posed as stockbrokers willing to take bribes.
The suits focus on alleged fraud in the sale of shares of Securitek International Corp.(OTC BB:SECQ - news), International
Investment Group Ltd., SpacePlex Amusement Centers International Ltd., America's Coffee Cup Inc. and the proposed initial
public offerings of Interactive Information Solutions Inc. and StockNet Inc.
The defendants in the case include brokerage firms La Jolla Capital and J.S. Securities, as well as stock-issuer Golf Ventures
Inc.
Among people named in the suits were Jeffrey Szur, president of J.S. Securities. The SEC alleged he and Bertram Slutsky led
a scheme to manipulate Securitek shares. Slutsky allegedly paid bribes to Szur and J.S. Securities' employees of up to 50
percent of the sales of Securitek stock to retail customers, the SEC said.
The bribes enabled Slutsky to sell his stock at an artifically inflated price, the SEC also said.
The SEC also named Leonard Alexander Ruge, a Canadian stock promoter arrested in October 1996 and charged with
securities fraud.
In the Utah suit, the SEC named George Badger, ''principal officer'' of Golf Ventures Inc. The suit alleges Badger directed a
scheme to manipulate stocks issued by Golf.
Michael Krome, a lawyer for defandant Mac Beagelman, said he had not seen the SEC civil suit, but that his client was
prepared to defend himself against it.
''We're going to defend it and hopefully we'll find some resolution where everyone will get their money back if, in fact, they
were cheated,'' Krome said.
Beagelman was a member of International Investment Group's board from about 1978 to 1996, the SEC said.
The other individuals charged could not be reached for comment.
The defendants have 20 days to respond to the SEC's suit.
The SEC said it expects a civil trial, although when that trial will take place is still unknown. ''It's impossible to say,'' said
Henry Klehm, the SEC's senior associate regional director. ''It takes a long time to get these things to trial.''
Klehm said it was one of the biggest penny fraud stock cases ever filed by the SEC.
He said that to date a few of the criminal cases have been settled, but none of the civil cases have been. |
