SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 16067 / February 23, 1999
SECURITIES AND EXCHANGE COMMISSION v. CHARLES D. LEDFORD Civil Action No. 99-CV-27SPM
SEC FILES CIVIL ACTION FOR PERMANENT INJUNCTIVE RELIEF AND CIVIL MONETARY PENALTIES AGAINST CHARLES D. LEDFORD, FORMER PRESIDENT OF ECO2, INC.
On February 12, 1999, the Securities and Exchange Commission ("Commission") filed a complaint in the Northern District of Florida against Charles D. Ledford ("Ledford"), the former president, Chief Executive Officer and Chief Financial Officer of ECO2, Inc. ("ECO2"), seeking a permanent injunction and civil monetary penalties against Ledford for his repeated violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
According to the complaint, Ledford issued a series of false and misleading press releases designed artificially to inflate the price of ECO2's publicly traded stock and attract new investors to ECO2. ECO2, a Delaware company formerly headquartered in Hawthorne, Florida, was a development stage company established to provide solid waste tire management services to governmental, commercial and industrial entities through sales of a "tire recovery system." The tire recovery system purportedly utilized a pyrolysis process to recycle scrap tires into oil, carbon black, steel and methane gas by-products. Ledford, through the company, purportedly intended to build and sell the tire recovery systems and to market the by-products of the recovery process. In fact, no tire recovery systems were ever sold by ECO2, which realized only limited income from the sale of scrap rubber and tipping fees.
The Commission alleges that from at least March 1995 through early 1997, Ledford caused the company to issue false and misleading press releases to the public regarding negotiations between ECO2 and various entities for the purchase of ECO2's tire recovery systems, and at least one press release regarding present and future revenues of an ECO2 subsidiary, ECO Jet Systems, Inc.
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