SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 15953 / October 27, 1998
Securities and Exchange Commission v. Liberty Capital Group,
Inc. and Jason A. Greig, Civil Action No. C98-1515C (USDC
WA).
On October 27, 1998, the Securities and Exchange
Commission filed a complaint in the United States District
Court for the District of Washington against a Bellingham,
Washington publicist for distributing over the Internet and
through other means, information regarding certain microcap
companies without disclosing compensation received from
those companies. The Commission's complaint names Liberty
Capital Group, Inc. ("Liberty") and Jason A. Greg ("Greig"),
the sole officer, director and shareholder of Liberty, as
defendants and alleges that Liberty and Greig violated
Section 17(b) of the Securities Act of 1933.
The complaint alleges that from April 1996 until April
1998, Greig, through Liberty, published Jay Greig's Liberty
Letter in which he provided general information on
approximately twenty companies quoted on the Nasdaq Smallcap
market, the Nasdaq Bulletin Board, and also traded on the
Canadian Exchanges. During 1997, Greig developed a website
for Liberty and began publicizing on the website, as well as
through e-mails and postings on the Internet bulletin
boards, three of the companies featured in the newsletter,
as well as six other companies. The complaint alleges that
Liberty, through Greig, entered into written or oral
agreements with several of the companies publicized on
Liberty's website or in the newsletter, requiring the
companies to pay varying amounts of cash and/or securities
for these services. The complaint alleges that Liberty and
Greig received cash and stock, both directly and indirectly
from at least seven of the companies, totaling nearly $1.2
million.
The complaint alleges that although the newsletter
disclosed that Liberty received compensation from issuers
for publicizing their stocks, it failed to disclose the
existence of the agreements between Liberty and certain of
the publicized companies, or the various amounts of
compensation. The complaint also alleges that until very
recently, Liberty only made a vague, general disclosure on
its website about the receipt of compensation, and also
failed to disclose the existence of the agreements and any
specifics on past or agreed upon compensation.
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