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U.S. Securities and Exchange Commission

Securities Exchange Act of 1934
Release No. 47154 / January 10, 2003

Administrative Proceeding
File No. 3-11005

Order Instituting Public Proceedings and Notice of Hearing Pursuant to Section 15(B)(6) of the Securities Exchange Act Of 1934

Proceedings Instituted Against Mark Schultz

The Securities and Exchange Commission today announced that it issued an Order Instituting Public Administrative Proceedings pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 in which the Division of Enforcement will seek a penny stock bar against Mark Schultz, a resident of Fuengirola, Spain.

In the Order Instituting Proceedings, the Division of Enforcement alleges, inter alia, that a U.S. District Court entered default injunctions against Schultz. SEC v. Mark Schultz, No. 00 Civ. 3443 (S.D.N.Y.) (July 10, 2002) (MP). The injunctions were based on the Commission's allegations in the District Court matter that between 1995 and 1998, Schultz made fraudulent misrepresentations in violation of federal securities laws. According to the Complaint in the District Court matter, Schultz failed to disclose that he was paid by companies to recommend their stocks and that his advice was not based on independent analysis. The Complaint also alleged that Schultz failed to disclose that he intended to sell and in fact sold stock of certain companies at the same time that he recommended that readers of his publication by the companies' stocks. The companies that paid Schultz to promote their common stocks were penny stocks as defined in Section 3(a)(51)(A) of the Securities Exchange Act of 1934.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Schultz an opportunity to dispute these allegations, and to determine whether a penny stock bar is appropriate and in the public interest.

 

http://www.sec.gov/litigation/admin/34-47154.htm


Modified: 01/10/2003