Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Whodunit? Two Stockbrokers Murdered in Jersey; No Clues -- Ignore unavailable to you. Want to Upgrade?

To: Jeffrey S. Mitchell who wrote (1126)	9/7/2011 6:07:52 PM
From: StockDung	Read Replies (1) \| Respond to of 1156

I guess you start by researching the spongetech past employees ""The new indictment has now charged former Spongetech employees Andrew Tepfer, Seymour Eisenberg, Thomas Cavanagh and Frank Nicolois, and a former vendor, George Speranza."" complinet.com

To: Jeffrey S. Mitchell who wrote (1126)	9/7/2011 6:13:22 PM
From: StockDung	Read Replies (1) \| Respond to of 1156

Here it is Jeff Both Thomas Cavanaugh and Frank Nicolios are former spongetech employees and Electro-Optical Systems Corporation was promoted also by the two murdered Colts neck promoters. I know Electro Optical well. Bryant Craguns attorney George Chachas was involved in that one. See : sec.gov ----------------------------------------------------------------------------------------------- U.S. Securities and Exchange Commission Litigation Release No. 18787 / July 20, 2004 Court Grants Summary Judgment Against Thomas Cavanagh, Frank Nicolois and Eight Other Defendants and Finds That They Engaged in Pump-and-Dump Scheme Court Orders Over $18 Million in Disgorgement and $3.3 Million in Penalties Securities and Exchange Commission v. Thomas Cavanagh, et al., 98 Civ. 1818 (SDNY) (DLC) On July 15, 2004, U.S. District Judge Denise Cote granted summary judgment in favor of the Commission and against the ten remaining defendants in a civil action arising out of the fraudulent offering and sale of securities of Electro-Optical Systems Corporation. In its order, the court found that Thomas Cavanagh, Frank Nicolois, and their company U.S. Milestone had violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act), and that Thomas Brooksbank, James Franklin, and Thomas Hantges had violated Securities Act Sections 5(a) and 5(c). The Court also granted summary judgment against relief defendants Karen Cavanagh, Beverly Nicolois, their company Cromlix, LLC, and Edward Kaufer. In granting the Commission's motion for summary judgment, the court permanently enjoined Cavanagh, Nicolois, and Milestone from violating, directly or indirectly, Securities Act Sections 5(a), 5(c) and 17(a) and Exchange Act Section 10(b). The court permanently enjoined Brooksbank, Franklin, and Hantges from violating, directly or indirectly, Securities Act Sections 5(a) and 5(c). The court also ordered that Cavanagh, Nicolois, and Milestone pay, jointly and severally, disgorgement of $15,564,863.02 – the total amount of the market fraud – plus interest, less any disgorgement amounts actually paid by other defendants and relief defendants. Cavanagh, Nicolois, and Milestone were also each ordered to pay a civil penalty of $1,000,000. The court ordered Brooksbank, Franklin, and Hantges to pay, jointly and severally, disgorgement of $889,275.00 plus interest. In addition, Brooksbank, Franklin, and Hantges were ordered to individually pay disgorgement of $185,337.79, $50,926.50, and $304,654.29, respectively, plus interest. These three defendants were also each ordered to pay a civil penalty of $125,000. Relief defendants Karen Cavanagh, Beverly Nicolois, and their company Cromlix were ordered to pay, jointly and severally, disgorgement of $803,660.75 plus interest. Relief defendant Edward Kaufer and defendant Brooksbank were ordered to pay, jointly and severally, disgorgement of $213,150.97 plus interest. The Commission filed this action in March 1998, alleging that certain defendants offered and sold securities of Electro-Optical in violation of the registration and anti-fraud provisions of the securities laws. Brooksbank, Franklin, and Hantges, in concert with now-settled defendant George Chachas, were the principal shareholders of Curbstone, a shell corporation that merged with a private company, WTS Transnational, Inc. ("WTS") in late 1997 to form Electro-Optical. They sold over 2.5 million Curbstone management shares to certain nominee shell companies in Spain and provided the nominees options to acquire additional management shares, which were restricted securities that could not be resold to public investors unless pursuant to registration or an exemption. These shares of Curbstone, which after the company's merger with WTS became shares of Electro-Optical, were soon resold to the public in a massive unregistered distribution in which Cavanagh and Nicolois (together with their now-deceased lawyer William Levy) pumped up the Electro-Optical stock price and pocketed millions of dollars. Judge Cote issued a preliminary injunction in April 1998, having found that the Commission had shown a substantial likelihood of success in proving that the defendants had violated the registration and antifraud provisions of the securities laws. The injunction was affirmed on appeal. In October 1998, the action was stayed due to the criminal investigation and prosecution of Cavanagh, Nicolois, and Levy for false statements made in connection with this litigation. Since then, approximately forty-five persons or entities have either settled by paying full disgorgement or are in default. The order granting the Commission's motion for summary judgment resolves all outstanding claims. Related Litigation Releases: No. 15669 / March 13, 1998 No. 15715 / April 21, 1998 No. 16035 / January 21, 1999 No. 16152 / May 19, 1999 No. 16372 / November 29, 1999 No. 16419 / January 27, 2000 Related Administrative Proceedings: Admin. Release No. 34-49484 / March 26, 2004 http://www.sec.gov/litigation/litreleases/lr18787.htm Home Previous Page Modified: 07/20/2004

To: Jeffrey S. Mitchell who wrote (1126)	9/7/2011 6:31:25 PM
From: StockDung	Respond to of 1156

"Two of the primary defendants, George Chachas and Maier Lehmann, have consented to the entry of injunctions alleging violations of the antifraud and registration provisions of the federal securities laws. Chachas paid $493,000 and Lehmann paid $630,000 in disgorgement and penalties." SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 16035 / January 21, 1999 SEC v. Cavanagh et al., 98 Civ. 1818 (S.D.N.Y) (DLC) On January 7, 1999, United States District Court Judge Denise Cote issued an order requiring New Jersey securities lawyer William N. Levy to pay $1,292,000 into the Court’s registry pending trial on the merits of the Commission’s action, SEC v. Cavanagh et al. Levy consented to the order after the Commission discovered that Levy, whom the Commission has alleged participated in a scheme to manipulate the stock price of Electro Optical Systems, Inc. ("EOSC"), had failed to disclose in his court-ordered accounting that he had profited by over $560,000 by selling EOSC shares during the manipulation. Levy previously was enjoined in 1976 for violating the antifraud and registration provisions of the federal securities laws in SEC v. Management Dynamics, Inc., 73 Civ. 2642 (S.D.N.Y.), Lit. Release 7445 (June 16, 1976), a similar case involving the unregistered sale of securities and stock manipulation. The $1,292,000 will bring the total deposited in the registry of the Court to nearly $2 million. In addition, approximately $6,000,000 is frozen in bank accounts in Spain and Switzerland pending disposition of the Commission’s case. Other funds traced to the defendants remain frozen in U.S. banks and brokerage accounts. On March 13, 1998, the Commission filed its Complaint and obtained a temporary restraining order against Levy, Thomas Cavanagh, Frank Nicolois and 10 other defendants and 19 relief defendants by alleging violations of the antifraud and registration provisions of the federal securities laws in connection with the defendants scheme to manipulate EOSC’s stock price. The Complaint alleges that the defendants controlled the supply of EOSC stock, inflated EOSC’s share price from $.50 to over $5.00 in one day, and distributed false information about the company in press releases and Internet newsletters. As a result, the defendants reaped over $12,000,000 in profits by selling EOSC shares on the Internet, to primarily small, on-line investors. On April 20, 1998, Judge Cote entered a preliminary injunction against the primary defendants pending trial on the merits. The 122-page District Court opinion stated that defendants Levy an Cavanagh "set in motion a plan . . . designed to line their pockets." In July 1998, the Commission amended its Complaint, adding four defendants and seven relief defendants. On September 2, 1998, the U. S. Court of Appeals for the Second Circuit upheld the District Court’s decision granting the preliminary injunction. 155 F.3d 129 (1998). In October 1998, the Commission’s case was partially stayed by the District Court at the request of the defendants in view of a criminal investigation by the United States Attorney’s Office for the Southern District of New York. In addition to the funds frozen in the U.S. and abroad, to date, the Commission has recovered $2.3 million in disgorgement, interest and penalties from settling defendants, relief defendants and potential relief defendants. Two of the primary defendants, George Chachas and Maier Lehmann, have consented to the entry of injunctions alleging violations of the antifraud and registration provisions of the federal securities laws. Chachas paid $493,000 and Lehmann paid $630,000 in disgorgement and penalties. Related Litigation Releases: No. 15669, March 13, 1998 No. 15715, April 21, 1998

To: Jeffrey S. Mitchell who wrote (1126)	9/7/2011 7:03:07 PM
From: StockDung	Respond to of 1156

Re: OT - 4/25/00 - Dismissal of Securities Fraud Claims Against Internet Newsletter Is Denied April 25, 2000 Dismissal of Securities Fraud Claims Against Internet Newsletter Is Denied On April 25, 2000, the Honorable Leonard B. Sand, United States District Judge for the Southern District of New York, issued a memorandum and order in Alan Fellman, On Behalf of Himself and All Others Similarly Situated, Plaintiffs v. Electro Optical Systems Corp., Charles Weaver, George C. Chachas, U.S. Milestone, Thomas Edward Cavanagh, William Levy, Donald & Co., Cosimo Tacopino, the Future Superstock, and Barrow Street Research, Defendants, No. 98 Civ. 6403 LBS, 2000 WL 489713 (S.D.N.Y., Memorandum and Order filed Apr. 25, 2000). In that case, the plaintiff alleges that he and a reputed class of similarly-situated people were defrauded in a scheme that included fraudulent statements published in an Internet newsletter known as "The Future Superstock". Plaintiff alleges that The Future Superstock recommended the purchase of stock in Electro Optical Systems Corporation and made seven allegedly false misstatements. In its opinion, the Court analyzes each of the alleged misstatements and assesses the issues of whether plaintiff adequately alleged falsity, scienter, materiality, reliance and loss causation. In perhaps the most interesting twist, lawyers for The Future Superstock argued that it was "unreasonable for Plaintiffs to rely on FSS's newsletter given that, two months earlier, the 'Stock Detective' website posted an extremely negative article on FSS. . . . This argument is also unpersuasive. FSS fails to allege that a single member of the class was aware of the Stock Detective assessment of FSS." The court rejected defendants' motion to dismiss and, as to The Future Superstock, held that "Plaintiffs have adequately alleged falsity, scienter, reliance, and causation, we conclude that Plaintiffs have adequately alleged securities fraud under Section 10(b) and Rule 10b-5." See: Alan Fellman, On Behalf of Himself and All Others Similarly Situated, Plaintiffs v. Electro Optical Systems Corp., Charles Weaver, George C. Chachas, U.S. Milestone, Thomas Edward Cavanagh, William Levy, Donald & Co., Cosimo Tacopino, the Future Superstock, and Barrow Street Research, Defendants, No. 98 Civ. 6403 LBS, 2000 WL 489713 (S.D.N.Y., Memorandum and Order filed Apr. 25, 2000); Securities Fraud: S.D.N.Y. Allows Fraud Suit Against Internet Newsletter To Proceed, 1(1) e-Trading Legal Alert 8-9 (Andrews Publications June 9, 2000). cybersecuritieslaw.com