To: Financial Internet Group who wrote (3751 ) 10/23/1998 12:46:00 PM From: Wes Read Replies (1) | Respond to of 3967
Joe: Mouthing off? OK. Here is some "mouthing off" from the SEC. It is an excerpt of a message from the SEC to another ASTG watcher which was sent to me. It is too good not to share with everyone. OH, you are such a good guy!! Talk about keeping your mouth shut--YOU should learn that lesson and really take it to heart. Wes ______________________________________________________ > For your information, on May 22, 1997, the SEC filed a civil action > in > the U.S. District Court for the District of Columbia against Members > Service Corporation and Mr. Joseph Lanza alleging violations of the > antifraud, registration, and reporting provisions of the federal > securities laws. > > Member, which was based in Winter Park, Florida, purported to acquire > > and operate private companies engaged in various businesses, > including > oil and gas production, the sale of cellular fax machines, and the > development of a synthetic blood substitute. The complaint alleges > that, beginning in 1992, certain defendants issued false and > misleading press releases, prepared false and misleading financial > statements, and made undisclosed payments to salesmen and others to > manipulate the price of Members stock from $2.50 to a high of $12 per > > share. > > According to the complaint, the scheme began when stock promoter > obtained 1.4 million shares of unregistered Members stock in sham > transactions designed to circumvent the registration provisions of > the > federal securities laws. > > The complaint alleges that the defendants met in Boca Raton in May > 1992 and agreed to undertake a series of actions to raise Members' > share price artificially, to sell more than one million shares of > unregistered Members stock that the defendants controlled at Union > Securities, and to share the proceeds from the sales. Members > thereafter allegedly issued various false and misleading press > releases about its involvement with companies that were developing > synthetic blood and producing oil and gas. The complaint alleges > that, in one press release, Members falsely stated that it had > acquired a synthetic blood company when, in fact, it had not. In > another press release, Members allegedly predicted that drilling on > its oil and gas properties would generate substantial revenues, but > the release failed to disclose that there was no reasonable basis for > > the prediction. > > As part of the alleged scheme, Mr. Lanza recommended the purchase of > > Members stock to others. Mr. Lanza was paid at least $540,000 for > promoting the stock. This information was taken from Litigation > Release Number 15371 and Accounting and Auditing Enforcement Release > Number 915. > > Thank you for providing us with the opportunity to review your > concerns. > > April B. Keyes > ----------