UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Securities Act of 1933
Release No. 8026 / October 18, 2001
Securities Exchange Act of 1934
Release No. 44954 / October 18, 2001
Admin. Proceeding File No. 3-10624
In the Matter of Hunter Adams, Gregg Adams, Alan Berkun, Robert Lisnoff, James L. Bila, Leonard Bila, Christian Blake, Brian Carroll, Joseph Digirolamo, and Joseph Mannino
The Securities and Exchange Commission today instituted public administrative proceedings, pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b)(6) and 21C of the Securities Exchange Act of 1934, against the following persons formerly associated with Preston Langley Asset Management, Inc., a defunct broker-dealer based in New York, New York:
Control Persons of Preston Langley
- Hunter Adams ("H. Adams"), age 33, resides in Atlantic Beach, New York;
- Gregg Adams ("G. Adams"), age 26, is a resident of Bayside, New York;
- Alan Berkun, age 42, is a resident of East Rockaway, New York;
- Robert Lisnoff, age 37, is a resident of Seaford, New York;
Preston Langley Registered Representatives
- James L. Bila ("J. Bila"), age 31, is a resident of Holbrook, New York;
- Leonard Bila ("L. Bila"), age 27, is a resident of New York, New York;
- Christian Blake, age 31, is a resident of Brooklyn, New York;
- Brian Carroll, age 25, is a resident of Brooklyn, New York;
- Robert Digirolamo, age 25, is a resident of Brooklyn, New York;
- Joseph Mannino, age 27, is a resident of Lindenhurst, New York.
In the Order Instituting Proceedings ("Order"), the Division of Enforcement ("Division") alleges that the Respondents engaged in systematic, fraudulent and deceptive sales practices in the offer and sale of securities of Americom Networks International, Inc. ("Americom") during the period of approximately June 1998 through at least December 1999. The Division further alleges that in or about June 1998, H. Adams, with the knowledge and assistance of G. Adams, Berkun and Lisnoff (collectively referred to as "Preston Langley Management"), coordinated and directed a private securities offering of common stock of Americom. Berkun and H. Adams, through nominee accounts, acquired a majority of the outstanding unrestricted shares of Americom through the private securities offering.
The Division further alleges that shortly after the conclusion of the Americom private offering, Preston Langley Management manipulated Americom's stock price from $.50 per share to more than $5 per share between June 25 and June 30, 1998. This manipulative activity consisted of the posting of fictitious quotations for Americom stock on the OTC Bulletin Board and falsely creating the appearance of trading in the stock.
According to the Division, once Preston Langley Management succeeded in manipulating the stock price of Americom above $5 per share, Preston Langley Management instructed the J. Bila, L. Bila, Blake, Carroll, Digirolamo and Mannino (the "Preston Langley registered representatives") and other registered representatives of Preston Langley to use a variety of fraudulent sales practices to (i) inflate artificially the market price of, and demand for, Americom securities and (ii) sell those securities to Preston Langley customers at inflated prices. The Division further alleges that G. Adams and Berkun, with the knowledge and consent of H. Adams and Lisnoff, also paid additional undisclosed compensation to the Preston Langley registered representatives.
According to the Division, the Preston Langley registered representatives used a variety of deceptive and fraudulent sales practices to induce Preston Langley customers to purchase Americom securities at inflated prices. For example, the Preston Langley registered representatives effected unauthorized purchases of Americom securities in the accounts of existing Preston Langley customers, failed to disclose the additional compensation they received, and made material misrepresentations and omissions concerning, among other things, predictions about Americom's future stock price and claims of possessing inside information. Preston Langley used stock it obtained from the nominee accounts at little or no actual cost to fill orders placed by the firm's customer's.
The Division alleges that the fraudulent activity continued at least through December 1999, and that Preston Langley Management and the Preston Langley registered representatives profited from the sale of Americom securities at artificial prices.
The Division alleges that H. Adams and Berkun willfully violated, or caused the violation of, 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 Rule 10b-5 thereunder, that G. Adams and Lisnoff willfully violated, or caused the violation of, Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder, and that H. Adams, G. Adams, Berkun and Lisnoff willfully aided and abetted, and caused, violations of Section 15(c)(1) of the Exchange Act and Rules 15c1-2 and 15c1-8 thereunder. The Division further alleges that J. Bila, L. Bila, Blake, Carroll, Digirolamo and Mannino willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide H. Adams, G. Adams, Berkun, Lisnoff, J. Bila, L. Bila, Blake, Carroll, Digirolamo and Mannino an opportunity to dispute these allegations, and to determine what sanctions, if any, are appropriate and in the public interest.