Re: SEC v. Liberty Capital Group; SEC vs. Ruebel; SEC v. Savage
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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SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE No. 15948 / October 27, 1998
SECURITIES AND EXCHANGE COMMISSION v. DARIN SPENCER RUEBEL,
United States District Court for the Northern District of Texas,
Civil Action No. 3-98CV2536D (N.D. Tx.)
The Securities and Exchange Commission ("Commission") today
announced the filing of a complaint in the U.S. District Court
for the Northern District of Texas seeking a permanent injunction
and civil penalty against Darin Spencer Ruebel ("Ruebel") for
violations of the anti-touting provision of the Securities Act of
1933. Ruebel authored and published several investment
newsletters, including an investment newsletter named The Equity
Journal which was published on the Internet.
The complaint alleges that Ruebel violated Section 17(b) of the
Securities Act of 1933 by publishing and circulating at least
three newsletters touting the stock of an issuer without
disclosing that he anticipated and received compensation from
this issuer. Beginning in or around July 1997, Ruebel was
negotiating with this issuer to provide consulting services for
eighteen months in exchange for compensation of $2,500 per month.
One element of the services to be provided by Ruebel was to
heighten public awareness of the existence and merits of this
issuer.
The complaint further alleges that after Ruebel began negotiating
with this issuer, he touted the stock of this issuer in an
untitled newsletter without any disclosure that he anticipated
receiving compensation from this issuer. After Ruebel entered
into a written agreement with this issuer and this issuer began
compensating Ruebel on a monthly basis, Ruebel touted the stock
of this issuer in two separate issues of The Equity Journal
without disclosing that he had received compensation and
anticipated additional compensation from this issuer. The Equity
Journal contained only a general disclaimer that The Equity
Journal and/or its affiliates "may receive compensation" from
some of the profiled companies.
Without admitting or denying the allegations of the complaint,
Ruebel consented to the entry of a permanent injunction
prohibiting him from committing violations of Section 17(b) of
the Securities Act of 1933. He also agreed to pay a civil
penalty of $5,000.
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Securities and Exchange Commission v. John Wesley Savage and
Princeton Research, Inc., Civil Action No. 98-CV-7179 (S. D.
Florida, filed October 27, 1998)
Litigation Release No. 15954, October 27, 1998.
FLORIDA STOCK TOUTER AND HIS COMPANY PAY CIVIL FINE OF $40,000 IN
CONNECTION WITH SEC CHARGES THAT THEY FAILED TO DISCLOSE THEIR
RECEIPT OF COMPENSATION FOR TOUTING
The Securities and Exchange Commission (SEC) announced that
on October 27, 1998 it filed a complaint charging John Wesley
Savage (Savage) and Princeton Research, Inc. (Princeton) with
having violated the federal securities laws in connection with
their touting of the stocks of seven different companies.
Simultaneous with the filing of the complaint, Savage and
Princeton consented, without admitting or denying the SEC's
allegations, to the entry of a permanent injunction and to pay a
civil penalty of $40,000.
The SEC's complaint alleges that Savage, who is Princeton's
president, received compensation in the form of stock or stock
options from five companies in exchange for touting those
companies or their securities. The SEC's complaint also alleges
that in violation of Section 17(b) of the Securities Act of 1933
(Securities Act), Savage and Princeton failed to disclose that
receipt of compensation in the newsletters and daily reports in
which Savage and Princeton touted those stocks and which they
disseminated through the mail, by fax, and over the Internet.
In addition, the SEC's complaint alleges that Savage and
Princeton made material misrepresentations concerning the stocks
of two other companies. According to the SEC's complaint, while
Savage owned shares of those two companies' stocks, Savage and
Princeton made baseless predictions about the likely future price
of those stocks and also made misrepresentations about the
financial condition of one of the companies.
Savage and Princeton consented to the relief the SEC sought
in its complaint, without admitting or denying the SEC's
allegations. Specifically, Savage and Princeton consented to a
permanent injunction against future violations of Sections 17(a)
and 17(b) of the Securities Act and Section 10(b) of the
Securities Exchange Act and Rule 10b-5 thereunder. Savage and
Princeton also agreed to pay a civil money penalty of $40,000.
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