SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 15949/October 27, 1998
SECURITIES AND EXCHANGE COMMISSION v. ANITA CARLISLE d/b/a
CARLISLE COMMUNICATIONS, J. SCOTT SITRA, SITRA ENTERPRISES,
INC.,JAFLC CAPITAL MANAGEMENT and JEFFREY BROMMER d/b/a
INVESTMENTS 101 Ltd. ET AL. Civil Action No. W98CA352(W.D.
Tx. Waco Division)
SEC CHARGES INTERNET STOCK TOUTERS WITH SECURITIES FRAUD
The Securities and Exchange Commission (Commission)
announced today that it filed a Complaint in the United
States District Court in Waco, Texas, against Anita
Carlisle d/b/a Carlisle Communications (Carlisle),
Scott Sitra (Sitra), Sitra Enterprises, Inc. (Sitra
Enterprises), JAFLC Capital Management Ltd. (JAFLC) and
Jeffrey Brommer d/b/a Investments 101 Ltd. (Brommer)
(collectively, the defendants). Carlisle and Sitra run
self-described investor relations services from their
homes. Brommer is an investment adviser registered
with the Commission. The Commission's Complaint
charges the defendants with illegally "touting" and
"scalping" securities in violation of the federal
securities laws.
In particular, the Complaint alleges the following:
- Carlisle, Sitra, Sitra Enterprises, JAFLC and Brommer
each had an agreement with Great White Marine and
Recreation, Inc. ("Great White" or "the company"), a
company whose stock is quoted on the OTC Bulletin Board
Service, to provide "investor relations" and other
promotional services. Under these agreements, each
defendant published and circulated favorable promotional
information about Great White in exchange for Great White
stock and/or money.
- From approximately February 1998 through September 1998,
all three defendants prepared reports and news releases
that spoke glowingly about Great White and encouraged
investors to purchase the company's stock, without
disclosing their compensation arrangement with Great
White.
- The defendants published this information on the Internet
and in newsletters and circulated it in glossy folders
sent to investors who responded to telephone numbers
listed on the company's Internet website or in
promotional materials.
- All three defendants also took advantage of the market
interest their promotional efforts created by selling
Great White stock into the market contrary to their
recommendations to buy the same stock. This fraudulent
practice is known as scalping. Carlisle, Sitra and
Brommer received stock proceeds totaling approximately
$573,896, $66,416 and $42,650, respectively.
- Carlisle shared her proceeds with Great White and also
deposited shares in Canadian brokerage accounts.
- Each defendant failed to disclose their receipt of stock
from Great White and their intention to sell the stock
contrary to their buy recommendations/favorable press
releases.
The Complaint charges that the defendants' practice of
scalping violates the antifraud provisions found in Section
17(a) of the Securities Act of 1933 (Securities Act) and
Section 10(b) of the Securities and Exchange Act of 1934,
and Rule 10b-5 thereunder. The Complaint also charges
Brommer with antifraud violations found in Sections 206(1)
and 206(2) of the Investment Advisers Act of 1940, based
upon these same activities. Finally, the Complaint also
charges that each defendant violated the anti-touting
provisions contained in Section 17(b) of the Securities Act.
The Complaint seeks a permanent injunction against each
defendant, as well as an accounting, disgorgement and civil
penalties. |
