U.S. SECURITIES AND EXCHANGE COMMISSI0N
Litigation Release No. 15173 / December 3, 1996
SECURITIES AND EXCHANGE COMMISSION v. MICHAEL CARNICLE, MICHAEL
HANSEN, WILLIAM STRAUGHAN, RANDY GLAD, LIONEL REIFLER, HOWARD RAY
and ARIE FROM, Civil Action No. 1:95-CV-0110C (D. Utah).
The Securities and Exchange Commission ("Commission")
announced that on November 21, 1996, Judge Tena Campbell of the
United States District Court for the District of Utah issued
Final Judgments of Permanent Injunction by Default against
defendants Randy Glad ("Glad") and Howard Ray ("Ray") enjoining
them from future violations of the antifraud provisions of the
federal securities laws. The Court also enjoined Glad from
future violations of the affiliated transaction and antitheft
provisions of the Investment Company Act of 1940. Additionally,
the Court enjoined Ray from future violations of the federal
margin regulations.
The Commission's Complaint alleges that, from December 1991
through mid-March 1992, Glad, Ray and five other defendants
attempted to use shares of two new registered investment
companies known as Public Funding Portfolios, Inc. and American
Vision Funds, Inc. (the "Funds") as collateral for millions of
dollars of margin loans from securities brokerage firms
nationwide with knowledge that the publicly quoted net asset
values for the shares in the Wall Street Journal and other
newspapers had been grossly inflated.
The Commission's Complaint alleges that the defendants
became shareholders of the Funds by selling grossly overvalued
assets to the Funds. These unmarketable assets, with a total
purported value of $165 million, consisted of stock and
promissory notes issued by shell corporations and nonexistent
shares of a Liechtenstein trust. The Complaint further alleges
that after infusing these essentially worthless assets into the
Funds, the defendants, while seeking margin credit,
misrepresented material facts to brokerage firms concerning,
among other things, the net asset values for the Funds' shares
and the liquidity of the Funds' assets.
The Funds were based in Los Angeles, California prior to
their dissolution by court order on March 31, 1992, in an action
brought by the Commission. Securities and Exchange Commission v.
Public Funding Group, Inc., V. Thayne Whipple II, American Vision
Funds, Inc. and Public Funding Portfolios, Inc., Civil Action No.
92-1646 WDK (EEx) (C.D. Cal.).
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U.S. SECURITIES AND EXCHANGE COMMISSI0N
PACIFIC REGIONAL OFFICE
LOS ANGELES, CALIFORNIAFor Immediate ReleaseNEWS DIGEST
FINAL JUDGMENTS OF PERMANENT INJUNCTION BY DEFAULT ENTERED
AGAINST RANDY GLAD AND HOWARD RAY
The Securities and Exchange Commission (Commission)
announced that on November 21, 1996, U.S. District Judge
Tena Campbell issued Final Judgments of Permanent Injunction
by Default against defendants Randy Glad (Glad) and Howard Ray (Ray).
Specifically, the Court enjoined Glad and Ray from future
violations of Section 17(a) of the Securities Act and
Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
Additionally, the Court enjoined Glad from future violations
of the affiliated transaction and antitheft provisions of
Sections 17(a)(1) and 37 of the Investment Company Act of
1940 and enjoined Ray from future violations of margin
provisions of Section 7(f) of the Exchange Act and Regulation X.
The Commission's Complaint alleges that, from December 1991
through mid-March 1992, Glad, Ray and five other defendants
violated the federal securities laws by: (1) selling
unmarketable securities with a total purported value of $165
million to two new registered investment companies known as
Public Funding Portfolios, Inc. and American Vision Funds,
Inc. (the "Funds") without disclosing that those securities
were grossly overvalued; and (2) attempting to use shares of
the Funds as collateral for millions of dollars of margin
loans from brokerage firms nationwide with knowledge that
the publicly quoted net asset values for the shares had been
grossly inflated. Securities and Exchange Commission v.
Michael Carnicle, Michael Hansen, William Straughan, Randy
Glad, Lionel Reifler, Howard Ray and Arie From, Civil Action
No. 1:95-CV-0110C (D. Utah). Ron WoodPacific Regional Office
(213) 965-3833 |
