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Strategies & Market Trends : Whodunit? CHST CREATIVE HOST SVCS market manipulation -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (148)	7/29/2000 11:50:22 AM
From: StockDung	Respond to of 193

Caffe Diva Group, Ltd., Ronald A. Davis, Patricia L. Metcalf, Jay Eric Chanin Summary Order to Cease and Desist 20000 1 nasaa.org

To: RockyBalboa who wrote (148)	7/29/2000 11:57:31 AM
From: StockDung	Read Replies (2) \| Respond to of 193

Caffe Diva Group, Ltd. Prohibition $435,000 23 nasaa.org

To: RockyBalboa who wrote (148)	11/2/2000 5:15:54 PM
From: StockDung	Read Replies (1) \| Respond to of 193

Creative Host Services, Inc. Signs Financial Consulting Agreement WithSchneider Securities, Inc. SAN DIEGO, Oct. 30 /PRNewswire/ -- Creative Host Services, Inc. (Nasdaq: CHST) today announced that it has signed an investment banking agreement with Schneider Securities, Inc. of Denver, Colorado. The agreement retains Schneider Securities for consulting services related to any form of business combinations and acquisitions, corporate finance, investment banking, as well as with regard to all areas related to the Company's publicly traded markets. The contract is for two six-month terms with an additional six-month extension available to Creative Host Services, Inc. Schneider Securities, Inc., founded in 1985, is a full service regional brokerage firm offering a wide variety of investment products and services. The firm employs approximately 165 brokers at 27 offices across the United States. Schneider Securities clears through Correspondent Services Corporation, a wholly owned subsidiary of Payne Webber, Inc. The firm has an ongoing track record in the NASDAQ market place, having done several NASDAQ/AMEX under writings as well as through market making activities in NASDAQ/AMEX stocks. Shareholders may learn more about the firm through its website at www.schneider-securities.com. The Company has agreed to pay Schneider a fee of $40,000, $10,000 paid upon the execution of the agreement and $30,000 payable 60 days following the execution of the agreement and warrants to purchase up to 130,000 shares of the Company's common stock at exercise prices of 110% of the market value upon the signing of the agreement and an additional 125,000 warrants if the agreement is extended an additional 6 months at 110% of the then current price. Sayed Ali, President of Creative Host Services, Inc. commented, "We are pleased to announce our new relationship with Schneider Securities, Inc. We are firm believers that small NASDAQ trading companies such as ours need to have the assistance and expertise of a brokerage firm with experience in our area of the market." The contract has been signed and is effective immediately. Creative Host Services, Inc. and its wholly owned subsidiary Gladco Enterprises, Inc. are engaged in the business of acquiring, managing and operating airport concessions such as food and beverage, news and gift, and other concessions throughout the United States. In addition, the Company also provides in-flight catering to certain national airlines at 9 of its airport locations and also manages Airline Clubs. Six of the Company's operating concessions are food-courts, each consisting of several food and beverage restaurants that are located within each court. If the various food courts were separated and counted as individual concessions, Creative Host/Gladco operate approximately 95 concessions overall. To simplify accounting, the Company counts these food-courts as one concession. Creative Host Services, Inc. enjoys co-branding relationships with several national and regional companies such as Carl's Jr., Schlotzky's Deli, TCBY Yogurt, Samuel Adams Brew Pubs, Mrs. Fields Cookies, Pretzelmaker, Nathan's Famous Hotdogs, and Hot Licks Bar & Grill. Gladco has an agreement with the Nation's oldest brewery, Yuengling Brewery. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements which are not historical facts contained in this news release are forward-looking statements that involve risks and uncertainties, including but not limited to risks associated with the uncertainty of future financial results, additional financing requirements, intense competition, the uncertainty of governmental approvals, risks described in other reports made by the public company and other risks adherent in the Company's business. There is no assurance that the Company will accomplish any goals expressed or implied in forward-looking statements, including this acquisition closure. SOURCE Creative Host Services, Inc. CO: Creative Host Services, Inc.; Schneider Securities, Inc.; Gladco Enterprises, Inc. ST: California, Colorado IN: FOD RST AIR SU: 10/30/2000 08:50 EST prnewswire.com

To: RockyBalboa who wrote (148)	11/5/2003 6:42:57 PM
From: StockDung	Respond to of 193

The Registered Representative Engaged in Efforts to Increase Creative Host's Stock Price 6. In September 1999, the Registered Representative formulated a written plan to inflate Creative Host's stock price. The plan called for the Registered Representative to restrict the supply of Creative Host stock by (1) having an investor buy up to 9.9% of Creative Host's shares "quietly;" (2) directing an investor to purchase 80,000 shares in a pending sale of a 140,000-share block; and (3) causing his clients to buy 200,000 shares. To artificially increase demand for stock, the plan called for the Registered Representative to (1) hire an analyst to write a research report; and (2) pay an Internet site to tout the stock with a buy recommendation. The written plan stated that it presented an opportunity for "stock appreciation," and a "rare opportunity to move a market."2 7. Beginning in November 1999, the Registered Representative executed his written plan, having one of his clients buy over 22% of Creative Host's outstanding shares and his other clients acquire large amounts of Creative Host stock. The Registered Representative used aggressive sales tactics to cause his clients to buy over 200,000 additional shares of Creative Host, namely high-pressure sales tactics, unauthorized trading, and falsely stating that Creative Host had a "virtual monopoly" on airport concessions. Indeed, from December 31, 1999 to at least June 2000, Kirkpatrick's client accounts held between 70% and 90% of the company's free trading shares, and the Registered Representative was responsible for a substantial portion of the firm's trading in the stock. In addition, he targeted his and his clients' purchases of Creative Host stock to broker-dealers he identified through monthly securities position listing reports prepared by the Depository Trust Company ("DTC").3 In addition to reducing the float, he took several further steps to restrict the supply of the security as part of the scheme to affect the price of Creative Host's stock artificially, including, but not limited to refusing to execute sell orders when instructed to do so and persuading his clients, by misrepresenting the costs and risks, to use margin in order to increase sales. 8. In furtherance of his scheme, the Registered Representative also carried out the steps of the written plan designed to create artificial demand for the security. a. First, he created this demand through the use of false and misleading touts on the Internet. In May 2000, when Creative Host's stock price had increased to the $15-$17 range, the Registered Representative hired Internet stock touters who, without reasonable basis, projected in documents they posted on the Internet that Creative Host's share price would rise to $30 near term and to $60-$70 mid-term. There was no reasonable basis for the projections because there had been no change in Creative Host's business, and in fact, Creative Host continued to operate at a net loss. During the week following commencement of touting by the Internet touters, Creative Host's stock price increased 30.7%. b. Second, in order to affect the price of Creative Host stock the Registered Representative also circumvented Kirkpatrick's internal market making policies. To avoid risk, Kirkpatrick had an internal policy to end each day "flat" so that it would have no position in the stocks in which it made a market. Because Kirkpatrick typically had little or no inventory, Kirkpatrick's order desk had to execute the orders placed at the end of the day by purchasing or selling stock on the open market rather than from its own inventory. The Registered Representative was aware of Kirkpatrick's policy, and he exploited it to raise Creative Host's stock price towards the end of the day by placing buy orders on a delayed basis. c. Third, the Registered Representative generated artificial demand for Creative Host stock by exploiting Kirkpatrick's market making activities through the numerous buy orders he placed. The Registered Representative's large volume of buy orders at successively higher prices — in conjunction with his delayed orders and Kirkpatrick's policy of ending each day flat — facilitated Kirkpatrick's price leadership by placing additional pressure on Kirkpatrick's order desk to enter numerous bid quotes for the security at successively higher prices in order to obtain stock to fill the Registered Representative's orders. Indeed, Kirkpatrick was the exclusive high bidder twice as often as the nearest of the other 30 market makers. Moreover, Kirkpatrick rarely decreased Creative Host's ask price. d. Finally, the Registered Representative also engaged in prearranged trading to create the appearance of active demand for Creative Host stock.4 The Registered Representative spoke to traders at other brokerage firms about Creative Host and negotiated trades that he then gave to Kirkpatrick's order desk for execution along with instructions to contact the specific trader with whom the Registered Representative had negotiated. Even though Kirkpatrick instructed the Registered Representative previously to cease contacting other market makers, the Registered Representative continued to prearrange trades until at least the first week of May 2000. 9. Kirkpatrick made inquiries beginning in December 1999 concerning the Registered Representative's trading concentration in Creative Host stock. In mid-May 2000, Kirkpatrick began imposing restrictions on trading in Creative Host stock due to concerns that the Registered Representative's activities might be affecting the market price of Creative Host stock. On May 29, 2000, Kirkpatrick decided to cease making a market in the stock due to various concerns, including Kirkpatrick's concentrated position and the possibility that the Registered Representative's trading activities may have affected Creative Host's share price. On June 16, 2000, in light of additional information concerning the activities of the Registered Representative uncovered during an internal investigation, Kirkpatrick further restricted the Registered Representative's ability to solicit orders in Creative Host. The combination of these restrictions plus the lack of significant legitimate support for Creative Host and the high percentage of shares held in margin accounts resulted in numerous margin calls from Kirkpatrick to the Registered Representative's customers. Kirkpatrick then began to sell the customers' shares in Creative Host and other stocks in order to satisfy unanswered margin calls. From mid-June until early August 2000, Creative Host's share price dropped from $29 to $4.12 per share. 10. The Registered Representative's activities discussed above violated Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

To: RockyBalboa who wrote (148)	11/6/2003 7:33:25 PM
From: StockDung	Respond to of 193

.FURTHER VINDICATION!!->SEC v. Steven E. Muth and Door Chair, Ltd., ============================================ U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 18447 / November 6, 2003 Securities and Exchange Commission v. Steven E. Muth and Door Chair, Ltd., Civil Action No. 03 CV 2178 WQH (JFS). (S.D.Cal., filed November 5, 2003) SEC CHARGES REGISTERED REPRESENTATIVE WITH MARKET MANIPULATION OF CREATIVE HOST STOCK AND KIRKPATRICK, PETTIS, SMITH, POLIAN INC. AND KIRKPATRICK'S FORMER CHAIRMAN AND BRANCH MANAGER WITH FAILURE TO SUPERVISE Securities and Exchange Commission v. Steven E. Muth and Door Chair, Ltd., Civil Action No. 03 CV 2178 WQH (JFS). (S.D.Cal., filed November 5, 2003) On November 5, 2003, the Commission filed a complaint in the United States District Court for the Southern District of California against Steven E. Muth alleging that Muth perpetrated a fraudulent scheme to artificially inflate the stock price of San Diego-based airport concessionaire Creative Host Services, Inc. from $0.78 to $29.00, an increase of 3,618%. Muth, 43, of Houston, Texas, was employed as a registered representative of broker-dealer Kirkpatrick, Pettis, Smith, Polian Inc., headquartered in Omaha, Nebraska. The complaint alleges that Muth fraudulently manipulated Creative Host's stock price during the period November 1999 to June 2000 by restricting supply and artificially creating demand for the stock through a variety of techniques and devices. These included: 1) causing Kirkpatrick's clients to buy and control 90% of Creative Host's shares; 2) engaging in high-pressure sales tactics; 3) using Kirkpatrick's affiliation with Mutual of Omaha Insurance Company to gain client trust; 4) refusing to execute clients' orders to sell Creative Host shares; 5) encouraging customers to obtain credit on their Creative Host shares in order to release funds with which to buy additional shares without explaining the risks of that credit; 6) hiring promoters to tout the shares on the Internet; 7) delaying submission of client orders toward the end of the trading day to increase demand at the end of the day; 8) helping Kirkpatrick to lead the bid prices placed for Creative Host shares, and 9) orchestrating prearranged trades. As a result of these actions, Muth allegedly received $950,562 in ill-gotten commissions and $546,781 in ill-gotten trading profits, $463,030 of which was received through Door Chair, Ltd., an entity Muth controls. The Commission charged Muth with securities fraud, specifically violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Separately, on November 5, 2003, the Commission entered an Order Instituting Administrative Proceedings, Making Findings, And Imposing Remedial Sanctions Pursuant To Section 15(b) Of The Securities Exchange Act Of 1934 ("Order") against Kirkpatrick; Peter N. Lahti, Kirkpatrick's former Chairman, President and CEO; and Gregory D. Adams, Kirkpatrick's former branch manager of two Colorado branch offices, for failure to supervise. While neither admitting or denying the Order's findings, Kirkpatrick, Lahti, 59, of Omaha, Nebraska, and Adams, 49, of Gulf Breeze, Florida, consented to the entry of the Order. The Commission's Order found that Lahti failed to develop an adequate system to implement Kirkpatrick's procedures to prevent and detect securities law violations. Additionally, Lahti and Adams disregarded red flags indicating suspicious conduct related to the manipulation of Creative Host's share price. Adams also failed to follow Kirkpatrick's policies and procedures regarding heightened supervision and review of correspondence. As part of their offers to settle the Commission's administrative proceeding, Kirkpatrick agreed to a censure; Lahti agreed to be suspended from acting in a supervisory capacity at a broker-dealer for 12 months; and Adams agreed to be suspended from association with any broker-dealer for six months and barred from acting in a supervisory capacity at a broker-dealer. In addition the Order imposes a $100,000 penalty against Kirkpatrick, a $40,000 penalty against Lahti, and a $20,000 penalty against Adams. SEC Complaint in this matter (in PDF format) sec.gov -------------------------------------------------------------------------------- Home \| Previous Page Modified: 11/06/2003