SEDONA SURE HAD A HISTORY OF PICKING STRANGE BED FELLOWS. SEDONA USED TO BE CALLED SCAN GRAPHICS:
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SCAN GRAPHICS INC
S-3/A
As filed with the Securities and Exchange Commission on July 31, 1997
Broad Capital Associates, 2,100,000 (50) 2,100,000
Broad Capital Associates sec.gov
Broad Capital Associates, Inc. has provided certain consulting services to
the Company
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U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 15826 / July 30, 1998
SECURITIES AND EXCHANGE COMMISSION v. SAM D. SCHWARTZ, BROAD
CAPITAL ASSOCIATES, INC., MURRAY A. HUBERFELD, AND DAVID B.
BODNER, Civil Action No. CV 98-6142 DDP (MCx)(C.D. Cal.)
On July 30, 1998, the Commission announced that it filed
various legal proceedings against Incomnet, Inc., a publicly held
corporation headquartered in Woodland Hills, California, and
three of its former officers and directors for their roles in a
series of fraudulent schemes in violation of the federal
securities laws. The Commission also charged Broad Capital
Associates, Inc. and Broad Capital's owners with violations of
the securities registration and reporting provisions of the
federal securities laws.
The proceedings brought by the Commission include a lawsuit
filed in federal court in Los Angeles against Sam D. Schwartz,
Incomnet's former President and Chairman of the Board, Broad
Capital, and Broad Capital's owners, Murray A. Huberfeld and
David B. Bodner. Schwartz, who is 58 years old and a resident of
Encino, California, is charged with securities fraud for causing
Incomnet to file false forms with the Commission and issue false
press releases. Schwartz is also charged with using a nominee
account to personally trade in Incomnet securities and for
failing to disclose this trading as required by the federal
securities laws.
Specifically, the Complaint alleges that on August 28, 1995,
Schwartz caused Incomnet to file a Form 8-K with the Commission
which falsely stated that Schwartz had received prior written
approval and consent from Incomnet's Board of Directors to
establish a personal account to trade in Incomnet's stock. The
Complaint further alleges that Schwartz caused Incomnet to issue
a false press release in September 1995 that repeated some of the
false statements in the Form 8-K and to file a Form 10-Q with the
Commission in November 1995 that referenced the false Form 8-K.
Finally, the Complaint alleges that in January 1995, Schwartz
caused Incomnet to issue two press releases falsely denying the
existence of the Commission's then-ongoing investigation of
Incomnet, even though Schwartz knew at that time of the
Commission's investigation.
The Complaint also alleges that from June 1994 through July
1995, Schwartz purchased, through a nominee account,
approximately 1,100,000 shares of Incomnet stock and sold
approximately 900,000 shares of Incomnet stock without timely
disclosing these transactions. The Complaint seeks to
permanently enjoin Schwartz from future violations of Sections
10(b), 13(a), 13(d), and 16(a) of the Securities Exchange Act of
1934 and Rules 10b-5, 12b-20, 13a-11, 13a-13, and 16a-3
thereunder. The Complaint also seeks a civil monetary penalty
from Schwartz.
The Complaint also charges Broad Capital, a private
investment firm based in New York City which acted as a
consultant to Incomnet, Huberfeld, age 37, and Bodner, age 41,
both residents of New York, with receiving over 513,000 shares of
restricted Incomnet stock from Joel W. Greenberg, a former
director of Incomnet, and immediately reselling these shares for
a profit of approximately $3,700,000 in violation of the
securities registration provisions of the federal securities
laws. Additionally, the Complaint alleges that Broad Capital
never disclosed that it held over 5% of Incomnet's outstanding
securities, as required by the reporting provisions of the
federal securities laws. Broad Capital, Huberfeld, and Bodner
agreed to settle this matter by consenting to a judgment, without
admitting or denying the allegations in the Commission's
Complaint, that enjoins them from committing future violations of
the securities registration and reporting provisions of the
federal securities laws. The judgment also orders Broad Capital,
Huberfeld, and Bodner, to disgorge their profits plus interest,
for a total of $4,694,125. Finally, the judgment orders Broad
Capital to pay a civil penalty of $50,000 and Huberfeld and
Bodner each to pay a civil penalty of $15,000.
The Commission also brought a cease-and-desist proceeding
against Incomnet, Greenberg, and Stephen A. Caswell, a former
officer and director of Incomnet. In this proceeding, the
Commission found that Incomnet violated the antifraud and
reporting provisions of the federal securities laws by filing
materially false forms with the Commission and by issuing several
false press releases, and that Greenberg and Caswell caused
Incomnet's violations of these provisions. The Commission also
found that Greenberg failed to disclose a loan arrangement he
entered into in January 1995 with Broad Capital in which he used
513,167 shares of Incomnet stock as collateral. Incomnet,
Greenberg, and Caswell all consented, without admitting or
denying the Commission's findings, to the entry of a cease-and-
desist order from violating or causing violations of the
antifraud and reporting provisions of the federal securities
laws. IN THE MATTER OF INCOMNET, INC., JOEL W. GREENBERG, AND
STEPHEN A. CASWELL, Exchange Act Rel. No. 34-40281;
Administrative Proceeding File No. 3-9661. |
