yOU'D HAVE THOUGHT THESE FOLKS WOULD HAVE LEARNED A LESSON.
SEXI news. JUICY!!!!!! CIA!! EWWWWWWWWW!!!
Securities Firms News
Wed, 31 Jan 2001, 2:21pm EST
Former R.I. Secretary of State, CIA Man in SEC Suit (Correct)
Former R.I. Secretary of State, CIA Man in SEC Suit (Correct)
(Corrects merger reference in story sent yesterday to say it
was a merger of ICMX with SOE, not WSMG.)
Washington, Jan. 30 (Bloomberg) -- A former Rhode Island
secretary of state and a former Central Intelligence Agency
officer were among defendants accused today by the Securities and
Exchange Commission of reaping $860,000 from one of the biggest
cases of Internet stock promotion fraud.
The SEC filed the civil suit naming former secretary of state
Kathleen Connell, 63, in federal court in New York City. The
complaint also names Thomas Clines, 71, a former CIA officer and
overseas arms buyer convicted in 1990 on felony tax evasion
charges, including willfully failing to report profits from secret
arms shipments to the Nicaraguan contras during the Iran/Contra
affair.
Wall Street Management Group, its president, Robert Ciofalo,
55, its consultant, Calvin Moore, 32, as well as Clines' wife,
Heidi Deconde Clines, 66, were also named.
The defendants couldn't be reached for comment, and the SEC
declined to provide the names of any of their lawyers.
The case is an outgrowth of a four-year-old case involving
the stock of Systems of Excellence Inc., a maker of
teleconferencing products whose technology was used to distribute
video of the 1997 swearing-in of Congress.
Company Went Bankrupt
Federal prosecutors alleged in 1996 that SOE Chairman Charles
O. Huttoe netted $12 million in illegal profit from shares
inflated by touting. He was sentenced to 46 months in prison after
pleading guilty to securities fraud and money laundering. Law
enforcement officials also accused many brokers and promoters of
touting the stock in return for payment from Huttoe.
Eventually, ``The manipulation unraveled, leaving many
innocent investors with worthless shares,'' the SEC said. Systems
of Excellence filed for Chapter 11 bankruptcy protection in 1997
and was subsequently liquidated.
The SEC said it has collected about $12 million in ill-gotten
gains from various enforcement actions stemming from its
investigation of SOE.
The five people and the firm charged today weren't accused of
a direct role in the alleged fraud, just of benefiting from it.
The complaint alleges that the defendants sold unregistered SOE
stock that they had acquired for free ``into an artificially
inflated market that was being manipulated by others.''
The defendants acquired a total of 920,000 unrestricted SOE
shares by exchanging services for the shares, the SEC alleged.
Connell also acquired an additional 209,484 newly issued,
unregistered shares of SOE common stock in a ``private placement''
in early 1996, the SEC said.
For example, Ciofalo, Wall Street Management Group's
principal, and Moore, a paid consultant for the firm, were issued
the shares to ``promote SOE by bribing brokers to push SOE stock
on investors, the SEC said.
The Clineses and Connell were issued shares for allegedly
consulting on the merger of SOE and ICMX Federal Systems Inc., a
provider of video teleconferencing equipment, the SEC said.
The SEC seeks restitution of their allegedly ill-gotten gains
totaling $347,117 from WSMG and Ciofalo, $23,215 from Moore,
$209,288 from Thomas Clines, $90,371 from Heide DeConde Clines,
and $190,086 from Connell. It also seeks interest on those
amounts, appointment of a court receiver and a court order banning
the defendants from violating securities laws in the future. |
