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Pastimes : Investment Chat Board Lawsuits -- Ignore unavailable to you. Want to Upgrade?

To: StockDung who wrote (9075)	11/25/2005 10:05:05 PM
From: Jeffrey S. Mitchell	Respond to of 12465

Re: 11/23/05 - [ZERO] Stockwatch: SEC wins $7.6-million (U.S.) fine against Australian SEC wins $7.6-million (U.S.) fine against Australian 2005-11-23 15:09 ET - Street Wire Also Street Wire (U-ZERO) Save The World Air Inc by Stockwatch Business Reporter In 1999 Australian Jeffrey Alan Muller said he had a device that would reduce air pollution from cars and improve fuel economy. The U.S. Securities and Exchange Commission said he had a pump-and-dump and filed a lawsuit. The SEC won that suit last week. A New York judge fined Mr. Muller $7.6-million for fraudulently promoting Save The World Air Inc., an OTC Bulletin Board listing. (All figures are in U.S. dollars.) Save The World Air was born in 1999 after Mandalay Capital Corp., a Vancouver company, bought Mr. Muller's pollution control technology for five million shares and changed its name. Mandalay's three Vancouver directors -- Edward Skoda, Del Thachuk and Michael Wolf -- appear to have left the company after the acquisition, and the SEC did not mention them. The SEC's lawsuit After Mr. Muller took over the company the SEC says he pumped the stock to $14 while selling most of his five million shares in private deals. "SWTA and Muller distributed a barrage of promotional information," the SEC said in its 12-page civil suit. In addition to touting the company on Raging Bull, the SEC said Mr. Muller staged demonstrations for news cameras showing off the technology, called ZEFS, which was short for the Zero Emission Fuel Saver. ZEFS, according to the SEC, was not the pollution-saving device Mr. Muller claimed it was. "During a Los Angeles demonstration, after connecting the ZEFS device, the emission of harmful nitric oxide actually increased," the SEC says. After a mechanic made adjustments Mr. Muller was apparently able to get some favourable readings. Two weeks later, Save The World said Fox News was going to televise ZEFS. The stock jumped from $7.03 to $12. Two days after that the company said it was going to show off its technology for MSNBC. The stock hit $14 on volume of 1,354,700 shares. At the same time, Save The World Air apparently claimed Ford Motor Company was looking to test its pollution control device. The SEC says Ford, however, just talked to Mr. Muller on the phone twice. "In those conversations, Ford employees told Muller that any interest by Ford was conditional on Ford's receipt of a completed Ford confidentiality agreement and its receipt of [reliable data] on whatever tests had been performed on the ZEFS," the SEC says. The SEC halts Save The World Air The SEC halted the stock three weeks later, questioning the accuracy of its news releases. Around the same time, New York Times reporter Gretchen Morgensen said the stock did not pass the "smell test." When the 10-day halt expired the company resumed at $2.62, down from an already diminished $4.87 on the day of the halt. Mr. Muller resigned in October, 2001, two months before the SEC's suit. Well-known environmental lawyer Edward Masry took over the company. Mr. Muller banned for 20 years New York Judge Frank Maas found that Mr. Muller's promotion of Save The World Air was fraudulent and misleading. In addition to fining him $7.6-million, Judge Maas barred Mr. Muller, 54, from stocks for 20 years. Mr. Muller's penalty was the largest in the Save The World Air pump-and-dump. The SEC previously settled with two hired touts in the case, Dennis Wilson and Billy Blackwelder. Florida stock tout Mr. Wilson agreed to a cease-and-desist order in December, 2001. The SEC said Save The World Air paid Mr. Wilson $25,000 to tout the company in Raging Bull with the alias "Majorbuyer." Mr. Blackwelder, the other paid tout, agreed to a similar order in November, 2003. Save The World Air, which is still in the environmental technology business, gained two cents on Tuesday to close at $1.02. stockwatch.comSEC&symbol=SEC&news_region=C