...Now that the Y2K program is in gear...
But it isn't "in gear". The bottom line is that you still can't buy the software, online or anywhere else.
And here's more from the SEC on the Dimples Affair:
http://www.sec.gov/enforce/adminact/3440043.txt
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 40043 / May 29, 1998
ADMINISTRATIVE PROCEEDING
File No. 3-9614
____________________________________
)
In the Matter of ) ORDER INSTITUTING
) CEASE-AND-DESIST PROCEEDINGS,
) MAKING FINDINGS, AND
J. Douglas Elliott, ) IMPOSING CEASE-AND-DESIST ORDER
)
Respondent. )
)
__________________________________)
I.
The Securities and Exchange Commission ("Commission") deems it
appropriate and in the public interest to institute public administrative
cease-and-desist proceedings pursuant to Section 21C of the Securities
Exchange Act of 1934 ("Exchange Act") against J. Douglas Elliott
("Respondent" or "Elliott").
In anticipation of the institution of these proceedings, Elliott has
submitted an Offer of Settlement ("Offer") prior to a hearing pursuant to
the Commission's Rules of Practice 17 C.F.R. 201.1 et seq., which Offer
the Commission has determined to accept. Solely for the purpose of these
proceedings and any other proceedings brought by or on behalf of the
Commission or in which the Commission is a party, Elliott, without
admitting or denying the findings contained herein (except that Elliott
admits the jurisdiction of the Commission over him and the subject matter
of these proceedings), consents to the issuance of this Order Instituting
Cease-and-Desist Proceedings, Making Findings, and Imposing Cease-and-
Desist Order of the Commission ("Order").
Accordingly, IT IS ORDERED that cease-and-desist proceedings pursuant
to Section 21C of the Exchange Act be, and hereby are, instituted.
II.
On the basis of this Order and the Respondent's Offer of Settlement,
the Commission finds:
======END OF PAGE 1======
THE RESPONDENT.
Elliott resides in North York, Ontario, Canada. From June 1990
until July 1997, Elliott was president, chief executive officer and
chairman of the board of directors of Dimples Group, Inc.
RELATED ENTITY.
Dimples Group Inc. ("Dimples") was a British Columbia, Canada
corporation headquartered in Markham, Ontario, Canada. Dimples had other
offices in Vancouver, Canada, San Francisco, California, and elsewhere.
From 1984 until July 1994, the common stock of Dimples and its corporate
predecessor, Samos Resources Inc., was listed for trading on the Vancouver
Stock Exchange ("VSE"). Until June 1994, Dimples was engaged in the
business of purchasing and distributing form-fitted cloth diapers and
related products. Dimples was dissolved by the British Columbia Register
of Companies in July 1997.
FACTUAL BACKGROUND.
Product Marketing and Development.
From about October 1989 through December 1990, Dimples
marketed, in parts of Canada and northwestern New York, a two-piece diaper
system consisting of a form-fitted one size fits all cotton reusable
diaper and a waterproof pant cover. In the fall of 1990, however, Dimples'
marketing efforts of the two-piece diaper slowed, and then stopped, because
of problems with quality control, packaging and consumer acceptance. In
mid-1991, Dimples redesigned its diaper system into a one-piece form-fitted
cotton reusable diaper contained within a breathable waterproof barrier.
Dimples arranged for the manufacture of this new diaper system by a new,
untested supplier located in Mexico. The new product was marketed to
retailers in the fall of 1991.
Beginning in about January 1992, Dimples marketed the
redesigned diaper system and related products in certain parts of the
United States. The Company's marketing effort ultimately proved
unsuccessful. For the fiscal year ended January 31, 1993, Dimples reported
gross sales of $2,387,187 and an operating loss of $4,795,218. (All dollar
figures herein are Canadian dollars.) Dimples ceased operations in June
1994.
Issuance and Performance of Stock.
From May 1990, through July 31, 1992, Dimples raised capital
and acquired assets by issuing 6.1 million shares of common stock for which
it received $7.5 million, thus increasing its shares outstanding from
2.5 million to 8.6 million. In June, July and August 1990, approximately
2.2 million shares were traded on the VSE and the stock price ranged
between $1.00 and $2.35 per share. From August 1991 through March 1992,
======END OF PAGE 2======
16.4 million shares were traded on the VSE, and the stock price ranged
between $0.98 and $8.75 per share. Throughout this period, United States
investors effected transactions in Dimples stock through U.S. brokerage
firms which executed the transactions through Canadian brokerage firms on
the VSE. Before July 1990, few transactions in Dimples stock were effected
by United States investors. By April 30, 1992, 4,637,042 shares were held
by United States investors, constituting about 60 percent of Dimples'
outstanding common stock (excluding shares held in escrow). Dimples's
stock was ordered to cease trading on the VSE in July 1994 for failure to
file certain financial reports. At the time of the order to cease trading,
Dimples's stock was trading at $.07 per share on the VSE. In May 1994,
trading of Dimples stock on the OTC Bulletin Board was at $0.08 (U.S.) per
share.
VIOLATIVE CONDUCT.
General Solicitations in the United States.
From about June to about September 1990, and from about
August 1991 to about March 1992, Dimples engaged in a public and general
solicitation within the United States of United States investors to induce
them to buy Dimples securities by: preparing and placing advertisements in
the United States financial press; broadcasts through a radio station
disseminating financial news in the Los Angeles, California metropolitan
area; preparing and circulating in the United States information kits
containing brochures, corporate profiles, reprints of press releases and
media coverage, and product samples, aimed at United States investors,
widespread and mass mailings of the information kits via the United States
mail to securities salespersons and potential investors throughout the
United States; and contacting and recruiting securities salespersons
employed by United States broker-dealers to recommend and promote Dimples
stock to their customers.
Elliott engaged in this solicitation by: writing press
releases; taking part in the radio broadcasts; overseeing and approving the
work of Dimples' public relations firm; travelling to the United States to
meet with securities salespersons and investors; and causing Dimples to
bear the costs of all such activity.
During the course of the general solicitation, Dimples
issued press releases, including releases dated May 3, 1991; July 16, 1991;
October 22, 1991; November 11, 1991; December 19, 1991; January 30, 1992;
February 11, 1992; March 5, 1992; March 31, 1992; April 22, 1992; May 19,
1992; and June 11, 1992. In or about October 1991, Dimples issued a four-
page brochure in the form of a research report captioned "Growth Stock
Review." In or about December 1991, this report was reissued with updated
stock market information. At intervals during the fall of 1991, Dimples
also issued a one-page fact sheet with updated stock market information.
Projections and Representations.
The foregoing marketing and promotional materials, which
======END OF PAGE 3======
Elliott helped prepare, included the following projections and
representations of fact:
(a) In the first year after launch of its redesigned
diaper, Dimples would generate revenues of $25 million to $35 million. At
the time such projection was made: Dimples was still redesigning its new
diaper product; its new diaper had not been test-marketed or mass-produced;
the new diaper was to be produced by a new supplier; and Dimples had few,
if any, firm purchase orders for the new diaper product;
(b) The Dimples diaper had been successfully test-
marketed in upstate New York, generating $1 million in sales when, in fact,
the test-marketing which had been conducted involved a different product
(the original two-piece combination diaper) and different packaging. This
earlier product had been found by Dimples to be defective and difficult to
market, and the $1 million sales figure did not reflect material
adjustments for defective and returned merchandise.
(c) Dimples's new supplier was financing all of
Dimples's inventory and would produce diapers without the need for Dimples
to finance inventory itself when, in fact, the new supplier with whom
Dimples had contracted to manufacture the diapers would not finance such
manufacturing without firm purchase orders which Dimples could not provide.
(d) Dimples had "ensured" through private placements
that Dimples was adequately financed to market its new product when, in
fact, the Dimples product marketing program included as a key element a
massive television advertising campaign costing at least $2.5 million and
this campaign was repeatedly cut back and postponed for lack of funds; and
(e) After its new product had been introduced, Dimples
represented that the product launch was proceeding successfully and on
schedule and that demand for its product was larger than anticipated when,
in fact, actual production and sales were far lower than projected, the
introduction schedule had been curtailed and postponed, and product demand
was materially less than projected.
======END OF PAGE 4======
CONCLUSION.
Based on the foregoing, the Commission finds that Dimples projections
described above lacked a reasonable basis, Dimples representations
described above were materially untrue when made and omitted to state
material facts necessary to make them not misleading when made, Dimples
projections and representations were made in connection with the purchase
or sale of a security, and that Elliott knew or should have known that
Dimples projections and representations lacked a reasonable basis or were
materially untrue when made, and that Elliott thereby caused Dimples to
violate Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and
Rule 10b-5 [17 C.F.R. 240.10b-5] thereunder.
II.
Effective immediately, Elliott shall cease and desist from committing
or causing any violation of, and from committing or causing any future
violation of, Section 10(b) or the Exchange Act [15 U.S.C. 78j(b)] and
Rule 10b-5 thereunder [17 C.F.R. 240.10b-5].
By the Commission.
___________________________
Jonathan G. Katz
Secretary
======END OF PAGE 5======
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