UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934
Release No. 50798 / December 6, 2004
Admin. Proc. File No. 3-11765
IN THE MATTER OF DANIEL E. CHARBONEAU
On December 6, 2004, the Commission issued an Order Instituting Public Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Order) against Daniel E. Charboneau, of White Plains, New York. The Order alleges that Charboneau participated in an offering of penny stock.
The Order further alleges that on November 15, 2004, an order of permanent injunction and other relief was entered by consent against Charboneau, permanently enjoining him from violating, directly or indirectly, Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, among other provisions, in the civil action entitled Securities and Exchange Commission v. FoneCash, Inc., and Daniel E. Charboneau, Civil Action No. 1:02CV00651-RMC, in the United States District Court for the District of Columbia.
The Commission's complaint in the district court action alleged that Charboneau was the Chief Executive Officer of FoneCash, Inc. The complaint further alleged that, between 1999 and March 2002, FoneCash filed with the Commission various registration statements, post effective amendments and annual and periodic reports on Forms 10-K and 10-Q, all signed by Charboneau, which contained material misrepresentations and omissions which were known to Charboneau. The complaint alleged that, among other things, the registration statements and amendments, and certain of the reports, claimed that FoneCash manufactured credit card terminals under a specified patent which would run until 2004. In fact, the patent lapsed in 1993. The complaint alleged that certain amendments to a registration statement filed in December 2001 grossly understated the number of outstanding shares. The complaint also alleged that FoneCash maintained a website which grossly misrepresented the company's business, stating that the company had an active business processing credit card transactions through its servers and received two thirds of its revenues from that activity. In fact, FoneCash had no such business.
A hearing will be scheduled before an administrative law judge to determine whether the allegations against Charboneau are true and, if so, what sanctions, if any, are appropriate and in the public interest. The Commission directed that an administrative law judge shall issue an initial decision in this matter within 210 days from the date of service of the Order Instituting Proceedings.
See also the Order in this matter