From today's SEC Digest:
COMMISSION CHARGES MAXXON, INC., ITS PRESIDENT, AND TWO OTHER MAXXON EMPLOYEES WITH ANTIFRAUD VIOLATIONS AND SEEKS MORE THAN $1.5 MILLION IN ILL-GOTTEN GAINS AND A PERMANENT OFFICER AND DIRECTOR BAR AGAINST MAXXON'S PRESIDENT
The Commission today filed a civil action in the United States District Court for the Northern District of Oklahoma against Maxxon, Inc., a Tulsa-based company, and against Maxxon's President and Chief Executive Officer, Gifford M. Mabie, Jr., and two other employees, alleging that they made materially false or misleading statements about the company and its sole product, a purported "safety syringe," and obtained more than $1.5 million in ill-gotten gains from stock they sold at fraudulently inflated prices.
The complaint alleges that from at least 1997 through 1999, Maxxon and Mabie made materially false or misleading statements regarding the syringe in a variety of media, and that during this period, Mabie sold more than 1 million Maxxon shares at fraudulently inflated prices and made profits of at least $1,541,817.59.
The complaint alleges further that from Feb. 20, 2002, through July 15, 2002, Maxxon, Mabie, and two other company employees, Thomas R. Coughlin, Jr., Maxxon's Medical Advisor, and Rhonda R.Vincent, Maxxon's Financial Reporting Manager, made additional materially false or misleading statements concerning the status of Maxxon's 510(k) application with the Food and Drug Administration (FDA), in which Maxxon sought to have the FDA approve a new version of its syringe, and that during this period, Mabie, Coughlin, and Vincent each sold Maxxon shares at fraudulently inflated prices. According to the complaint, during this period Mabie made profits of at least $60,356; Coughlin made profits of at least $50,290; and Vincent made profits of at least $29,526.93.
The complaint charges the defendants with violating Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rule 10b-5. The complaint charges Mabie with violating Section 5 of the Securities Act of 1933 (Securities Act) and charges Maxxon, Mabie, and Vincent with violating Section 17(a) of the Securities Act. The complaint charges Maxxon with violating Section 13(a) of the Exchange Act and Exchange Act Rules 13a-1, 13a-13, and 12b-20, and charges Mabie and Vincent with aiding and abetting Maxxon's violations.
The Commission seeks permanent injunctions against all the defendants, and disgorgement, prejudgment interest, and civil money penalties against all the individual defendants. The Commission also seeks against Mabie a statutory and equitable permanent bar from acting as an officer or director of any public company, a permanent bar from participating in an offering of penny stock, and an accounting by Mabie of all stock sales and trading profits that he received from the sale of Maxxon stock during the time of the alleged fraud. [SEC v. Maxxon, Inc., Gifford M. Mabie, Jr., Thomas R. Coughlin, Jr. and Rhonda R. Vincent, Civil Action No. 02-CV-975 H(J) USDC, N.D. Okla.] (LR-17911)
sec.gov |
