To: Dean Dumont who wrote (2708 ) 8/30/1998 11:00:00 AM From: s martin Read Replies (2) | Respond to of 26163
>>The Investor relations person is John Fasano. An employee of AZNT. His job is to release press material, send out information to perspective shareholders. << The same John Fasano who has been indicted for securities fraud in connection with the manipulation of penny stocks ???sec.gov 5. SEC v. Pignatiello, et al. The Commission's complaint, filed in Manhattan, alleges as follows: From September 1995 through early 1996, defendant Joseph Pignatiello directed schemes to manipulate the markets for securities issued by Spaceplex Amusement Centers International Ltd, Inc. (Spaceplex), a Nevada corporation which operated a family amusement center in St. James, New York, and America's Coffee Cup, Inc. (ACC), a Colorado corporation that sold coffee through one supermarket chain in southern California. For both Spaceplex and ACC, Pignatiello was hired by senior management of these companies to manipulate the over-the-counter markets for the companies' common stock in anticipation of making secondary public offerings based on the artificially pumped-up markets for these securities. Defendant James Manas was the President of Spaceplex and one of its principal stockholders. Manas hired Pignatiello to raise the price of Spaceplex stock to more than $5.00 per share in advance of a proposed $10 million secondary offering. In turn, Pignatiello worked with defendants John Fasano, Peter Mazzeo, and Constance Pignatiello in connection with the Spaceplex manipulation. Pignatiello and Fasano contacted an undercover FBI agent posing as a broker (the Agent) and offered to pay the Agent a bribe in the form of free Spaceplex stock in exchange for selling Spaceplex stock to the Agent's supposed retail customers. As part of the Spaceplex manipulation, Pignatiello directed Mazzeo to become a market maker in Spaceplex stock. At the time, Mazzeo worked as a trader at Colin, Winthrop & Co., a registered broker-dealer. Thereafter, Mazzeo followed Pignatiello's instructions in setting the prices at which Colin, Winthrop offered to purchase and sell Spaceplex stock, including steadily raising those prices during the period from early January through mid-February 1996. In addition to directing Mazzeo's operation as a market maker, Pignatiello and Constance Pignatiello began purchasing Spaceplex stock through Mazzeo in order to discourage downward pressure on the market price for Spaceplex common stock. The Spaceplex manipulation scheme slowly ground to a halt when the Agent refused to carry through on Spaceplex purchases because Pignatiello, Manas and Fasano failed to provide the Agent with free-trading Spaceplex stock, and Spaceplex's operating subsidiary ======END OF PAGE 7====== experienced increasing financial difficulties and filed for bankruptcy protection in April 1996. In September 1995, defendants Robert Marsik and Mark Pierce hired Pignatiello to raise the public market price of ACC common stock in advance of a secondary offering of ACC securities. At the time, Marsik and Pierce served as directors of ACC and were ACC's principal shareholders. In addition, Marsik served as ACC's President. From September 1995 through March 1996, ACC paid Pignatiello a monthly fee for his services and provided Pignatiello with a small block of ACC stock. In turn, Pignatiello directed Mazzeo at Colin, Winthrop to act as a market maker for ACC stock and, through accounts controlled by Constance Pignatiello and himself, Pignatiello began purchasing ACC stock to absorb the supply of ACC stock coming into the market. For example, during the period from October 1995 through April 1996, account records show that Pignatiello was responsible for 94% of all retail purchases of ACC stock. As Pignatiello exerted control over the supply of ACC common stock, the price of ACC common stock rose from $.20 in September 1995 to $2.00 per share in May 1996, just prior to a scheduled secondary offering. The ACC manipulation scheme failed to achieve its original goals when the secondary offering scheduled for May 1996 was withdrawn by ACC's underwriter and a secondary offering completed in August 1996 involved much less favorable terms for ACC, Marsik and Pierce. Based on the conduct described above, the Commission alleges that Pignatiello, Fasano, and Manas violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in connection with their manipulation of the price of Spaceplex stock. The Commission further alleges that Pignatiello, Marsik, and Pierce violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in connection with their manipulation of the price of ACC stock. Finally, the Commission alleges that Mazzeo and Constance Pignatiello aided and abetted Pignatiello's violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. In April 1997, Pignatiello and Fasano were indicted by the USAO on charges of conspiracy, securities fraud, and wire fraud in connection with the Spaceplex fraud (the Spaceplex Criminal Action). Manas has pled guilty to related criminal charges. ____________