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U.S. Securities and Exchange Commission

WAYNE M. CARLIN (WC-2114)
Regional Director

Attorney for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
Northeast Regional Office
233 Broadway
New York, New York 10279
(646) 428-1510

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK


SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

v.

JEAN BAPTISTE JEAN PIERRE,
GABRIEL TOKS PEARSE, and
DARIUS L. LEE,

Defendants.


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02 Civ. _____ ( )

COMPLAINT

Plaintiff Securities and Exchange Commission ("Commission"), for its Complaint against Defendants Jean Baptiste Jean Pierre ("Jean Pierre"), Gabriel Toks Pearse ("Pearse"), and Darius L. Lee ("Lee") (collectively, the "Defendants"), alleges as follows:

NATURE OF THE ACTION

1. This action involves fraudulent and unregistered offerings of securities of JB Stanley Group, LP ("JB Stanley"), Cambridge Capital Holdings Management, LLC ("Cambridge"), and Union Transfer and Cargo Corporation ("UTC"), three related companies controlled by Jean Pierre. From in or around May 1997 to in or October 1999, Jean Pierre raised approximately $457,300 from approximately fifteen investors by making fraudulent misrepresentations and omitting material facts in connection with the offer and sale of JB Stanley, Cambridge, and UTC securities. Lee, an employee of JB Stanley and Cambridge, and Pearse, an officer of Cambridge and UTC, participated in the fraudulent schemes. Of the approximately $457,300 raised from investors, Jean Pierre received approximately $220,818, Lee received approximately $6,300, and Pearse received approximately $5,700.

2. Jean Pierre raised approximately $304,700 from approximately nine investors through the sale of limited partnership interests of JB Stanley, an unregistered hedge fund. In offering and selling JB Stanley securities, Jean Pierre and Lee told investors, orally and in writing, that their funds would be pooled together to purchase and sell securities. In fact, only a small portion of the offering proceeds was actually invested. Jean Pierre misappropriated most of the offering proceeds to pay for personal expenses and to finance another business. In connection with the JB Stanley offering, Jean Pierre and Lee made misrepresentations about JB Stanley's business history and prospects and the use of investor funds.

3. In connection with the offer and sale of Cambridge stock, Jean Pierre and Pearse sent investors offering documents containing false or materially misleading information concerning, among other things, Cambridge's business operations, future prospects, and the value of Cambridge stock. Lee telephoned prospective investors, some of whom were cold-called, and solicited them to purchase Cambridge stock based on representations that Cambridge would be imminently conducting an initial public offering ("IPO") and that the private placement shares would vastly increase in value.

4. In addition, Jean Pierre and Pearse offered and sold shares of UTC, a Cambridge subsidiary, through offering materials that contained false or misleading statements about UTC's business, the safety of the investment, and the identity and qualifications of UTC's management team. At least eight investors purchased an aggregate of at least $147,600 of Cambridge stock, and at least one investor purchased $5,000 of UTC stock.

VIOLATIONS

5. The Defendants have engaged, and, unless enjoined and restrained, will again engage, in transactions, acts, practices and courses of business that constitute violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. §§ 77e(a), 77e(c), and 77q(a); Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5; and with respect to Jean Pierre, Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 ("Advisers Act"), 15 U.S.C. §§ 80b-6(1) and (2).

JURISDICTION AND VENUE

6. The Commission brings this action pursuant to the authority conferred upon it by Section 20(b) of the Securities Act, 15 U.S.C. § 77t(b), Section 21(d) of the Exchange Act, 15 U.S.C. § 78u(d), and Section 209(d) of the Advisers Act, 15 U.S.C. § 80b-9(d), seeking: (a) that the Defendants be enjoined from engaging in the type of transactions, acts, practices, and courses of conduct described herein; (b) a judgment ordering the Defendants to disgorge ill-gotten gains, plus prejudgment interest thereon; and (c) the imposition of civil penalties against the Defendants pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d), Section 21(d) of the Exchange Act, 15 U.S.C. § 78u(d), and Section 209(e) of the Advisers Act, 15 U.S.C. § 80b-9.

7. This Court has jurisdiction over this action, and venue is proper, pursuant to Sections 20(d) and 22(a) of the Securities Act, 15 U.S.C. §§ 77t(d), 77v(a), Sections 21(d), 21(e), and 27 of the Exchange Act, 15 U.S.C. §§ 78u(d), 78u(e), and 78aa, and Section 214 of the Advisers Act, 15 U.S.C. § 90b-14.

8. The Defendants, directly and indirectly, made use of the means or instruments of transportation or communication in, and the means or instrumentalities of, interstate commerce, or the mails in connection with the transactions, acts, practices, or courses of business alleged herein. Certain of the transactions, acts, practices, or courses of business alleged herein took place within the Southern District of New York, including, but not limited to, use of mails and telephones to communicate with investors in connection with the Defendants' scheme and the use of an office located in the Southern District of New York.

THE DEFENDANTS

9. Jean Pierre, age 29, was last known to be a resident of Hollywood, Florida. During the period of the conduct at issue, Jean Pierre resided in Forest Hills, New York. Jean Pierre was the president and chief executive officer of JB Stanley, the president and chief executive officer of Cambridge, and the chairman of UTC. From May 1996 through November 1997, Jean Pierre was a registered representative with several broker-dealers, including Klein Maus & Shire, Inc., Paragon Capital Corporation, and AIBC Investment Services Corporation. Jean Pierre held series 7 and 63 licenses.

10. Pearse, age 53, is a resident of Brooklyn, New York. Pearse is an assistant professor of literature at the Dobbs Ferry campus of Mercy College. From approximately February to approximately October 1999, Pearse served as Cambridge's vice-president and secretary and UTC's president and chief executive officer.

11. Lee, age 28, is a resident of Queens, New York. From in or around November 1998 to in or around September 1999, Lee worked at JB Stanley and Cambridge as an account representative. Since September 1996, Lee has been a registered representative with several broker-dealers, including Hornblower & Weeks, Inc., PHD Capital, Wolff Investment Group Incorporated, and Benson York Group, Inc., and is currently employed at Delta Asset Management Company, LLC. Lee holds series 7, 62, and 63 licenses.

OTHER RELEVANT ENTITIES

12. JB Stanley is a non-operating Delaware limited liability partnership formed in or around January 1996. JB Stanley's private placement memorandum ("PPM") describes its business as buying and trading securities. JB Stanley maintained an office at 67 Wall Street, Suite 2411, New York, New York 10005, from in or around December 1997 until it moved out in or around August 1999. Jean Pierre held himself out as president and CEO of JB Stanley.

13. Cambridge is a non-operating Delaware limited liability company formed in or around January 1998. Cambridge maintained an office at 67 Wall Street, Suite 2411, from in or around December 1997 until it moved out in or around August 1999. Cambridge's PPM states that Cambridge was formed primarily to act as an investment adviser, manager, and general partner to various private investment funds and institutional investors.

14. UTC is a non-operating New York corporation formed in or around May 1999. UTC is a subsidiary of Cambridge and maintained an office at Cambridge's and JB Stanley's office. UTC operated a wire transfer business in Brooklyn, New York, as an agent of MoneyGram, for approximately two months from in or around December 1999 to in or around January 2000, when the relationship with MoneyGram was severed.

BACKGROUND

15. This matter involves fraudulent offerings of unregistered securities of JB Stanley, Cambridge, and UTC, three related companies controlled by Jean Pierre. JB Stanley was a purported hedge fund and asset management firm. Cambridge was the general partner of, and investment adviser to, JB Stanley. UTC was a wholly-owned subsidiary of Cambridge. Jean Pierre was JB Stanley's president and chief executive officer, and, according to offering materials received by investors, served as JB Stanley's "hedge fund manager." Jean Pierre was also Cambridge's president, chief executive officer, and principal shareholder. Lee was JB Stanley's only other employee; Lee and Pearse were Cambridge's only other employees. JB Stanley, Cambridge, and UTC all operated out of the same one room office at 67 Wall Street in New York City. Each of the securities offerings by JB Stanley, Cambridge, and UTC sought to raise in excess of $1 million.

THE JB STANLEY FUND

16. From in or around July 1997 to in or around October 1999, Jean Pierre raised approximately $304,700 through the sale of unregistered limited partnership interests in JB Stanley. Several JB Stanley investors were solicited through cold-calls. In connection with the offer and sale of JB Stanley limited partnership interests, Jean Pierre and Lee made misrepresentations and omissions of material facts. Jean Pierre also misappropriated investor funds.

A. Misrepresentations Concerning Use of Investor
Funds and Misappropriation of Investor Funds

17. JB Stanley representatives, including Jean Pierre and Lee, told investors that JB Stanley was a hedge fund that pooled investor funds to purchase and sell securities. At least two JB Stanley investors received a brochure ("JB Stanley Brochure"), which stated that a hedge fund "pools the assets of a small fixed number of investors and allocates assets across a well diversified base utilizing a variety of investment styles and techniques." The JB Stanley Brochure also described JB Stanley as an "asset management firm" that assisted clients in managing their investments "more efficiently and cost effectively." The JB Stanley PPM described JB Stanley's investment strategy as seeking "above average economic return primarily through the short term transactions in equity and equity derived securities and other securities . . . [and by taking] advantage of volatility in specific securities and broad market activity."

18. The representations concerning the use to which investor funds would be put were false and misleading. In fact, of the $304,700 raised from investors, Jean Pierre misappropriated approximately $187,879. For example, approximately $144,645 went directly to Jean Pierre or for his benefit through ATM withdrawals and checks written to himself, his wife, and cash, and for personal expenses, such as car payments. Approximately $43,234 was used to pay for expenses of Cambridge, including office services and phone bills, travel, rental car payments, and equipment for UTC.

19. In some cases, Jean Pierre began misappropriating investor funds immediately after the investors sent the funds to JB Stanley. For example, on December 15, 1997, an investor's check for $50,000 was deposited into JB Stanley's bank account. From December 15, 1997 through January 5, 1998, Jean Pierre misappropriated the entire $50,000 through ATM withdrawals and by writing checks to himself, his wife, and a company controlled by one of his friends.

20. Of the investor funds that JB Stanley actually invested, most were lost. Any profits were either reinvested and ultimately lost, or deposited in JB Stanley's bank account and misappropriated by Jean Pierre. By the end of November 1999, Jean Pierre had lost or misappropriated all of the funds invested in JB Stanley. JB Stanley moved out of its office in or around August 1999, and investors have been unable to contact JB Stanley representatives since that time.

B. Misrepresentations about JB Stanley's Business Operations

21. The JB Stanley Brochure included a letter signed by Jean Pierre, as president and CEO of JB Stanley, which described JB Stanley as a prominent asset management firm that makes investment decisions by "combining state-of-the-art telecommunications and data delivery systems" with exhaustive research conducted by its experienced employees and veteran management personnel.

22. The representations in the JB Stanley Brochure regarding JB Stanley's business operations were false or misleading. Jean Pierre and Lee were the only employees of JB Stanley. At the time of the misrepresentations, Jean Pierre and Lee were in their twenties and their securities industry experience consisted of a few years working at broker-dealers. In addition, JB Stanley's "state-of-the-art telecommunications and data delivery systems" consisted of a desktop computer with Internet access.

C. JB Stanley Sent Investors False Account Statements

23. According to the JB Stanley PPM, JB Stanley was required to furnish each of the limited partners annual audited financial statements, and unaudited financial statements for the first three quarters of each fiscal year.

24. In order to induce investors to maintain their investment at JB Stanley and to invest additional funds, JB Stanley representatives sent investors phony account statements that overstated the fund's performance. For example, for the period January through March 1999, JB Stanley representatives sent several investors account statements that showed a purported 20.3% return for the quarter.

25. These account statements were false. In fact, because Jean Pierre withdrew investor funds during the same period, the value of the fund had actually declined and, accordingly, investors had lost money during the quarter. After receiving the phony account statements, at least one investor made an additional investment in JB Stanley.

26. In order to hide the fact that Jean Pierre had misappropriated most of JB Stanley's funds, JB Stanley representatives sent investors who wanted to cash out their investment phony account statements that showed that JB Stanley had suffered significant losses from investments. For example, after requesting that his money be returned, one investor received a statement claiming that the fund declined 18.61% in value for the period July through September 1999. The 18.61% decline was fabricated. The statement failed to disclose that the value of the fund had declined due to misappropriation, rather than trading losses.

27. None of the investors were ever provided audited year-end financial statements as required by the PPM.

D. Other Misrepresentations

28. In connection with the offer and sale of limited partnership interests in JB Stanley, Lee told at least one investor that Jean Pierre had consistently achieved a 50 percent return from other funds that he had managed. This representation was false. In fact, Jean Pierre never managed any funds other than JB Stanley, and Lee did not conduct any meaningful inquiry to determine Jean Pierre's past performance.

29. Several limited partners of JB Stanley were solicited to purchase Cambridge stock. In connection with the offer and sale of Cambridge stock, the investors received a pamphlet that stated that Jean Pierre served as a portfolio manager to "several major brokerage firms, individual, and institutional accounts." This statement was false or misleading. Jean Pierre never served as a portfolio manager to a brokerage firm.

THE FRAUDULENT OFFER AND SALE OF CAMBRIDGE AND UTC STOCK

30. From in or around November 1998 to in or around October 1999, Jean Pierre, Pearse, and Lee induced approximately eight investors to purchase approximately $147,600 of Cambridge stock. The offering of Cambridge stock, which was not registered with the Commission, was purportedly part of a $5 million private placement.

31. In February 1999, several investors who had purchased interests in JB Stanley received a letter signed by Jean Pierre and Pearse offering to sell them UTC stock. At least one investor purchased $5,000 of UTC stock.

32. In connection with the offer and sale of Cambridge stock, Jean Pierre, Pearse, and Lee made numerous written and oral misstatements and omissions of material facts. Lee falsely told investors that Cambridge was about to conduct an IPO, which would allow investors to sell their private placement shares for a substantial profit. Jean Pierre and Pearse sent investors the Cambridge PPM and other offering documents that contained false and misleading statements about Cambridge's business, the existence of a proposed merger, and the value of Cambridge stock.

33. In connection with the offer and sale of UTC stock, Jean Pierre, Pearse, and Lee sent investors a letter and other offering documents containing false and misleading statements about UTC's business, the number of shares already sold, and the experience, qualifications, and identity of UTC's management team.

A. Misrepresentations about Cambridge's Purported IPO

34. Since at least December 1998, Lee telephoned investors, some of whom were cold-called, and solicited them to purchase Cambridge stock for $5 per share in a purported private placement. In connection with the offer and sale of Cambridge stock, Lee told several investors that Cambridge would be imminently conducting an IPO and investors would be able to sell shares purchased in the private placement for a substantial profit. For example, in or around February 1999, Lee told at least two investors that Cambridge would conduct an IPO of its shares in September 1999 for $15 per share. In or around February 1999, Lee told another investor that Cambridge would conduct an IPO within four to six weeks that would allow the investor to sell his Cambridge stock for a substantial profit.

35. When the IPO did not occur, several investors telephoned Cambridge and spoke with Jean Pierre. Jean Pierre assured at least one investor that Cambridge would conduct an IPO in the near future, and he offered to sell the investor additional Cambridge stock.

36. These representations were false and misleading. Cambridge has never filed a registration statement with the Commission, and has never taken any steps towards conducting an IPO. In addition, Lee did not take any meaningful steps to determine whether Cambridge intended to conduct an IPO, and had no reasonable basis for the price predictions he made. Cambridge vacated its office in or around August 1999, and investors have not been able to contact Cambridge representatives since that time.

B. Misrepresentations in the Cambridge PPM

37. The Cambridge PPM, which was sent to at least three investors, stated that Cambridge acted as an investment adviser to Sunrise America Value Fund and Sunrise American International, and that Cambridge was in the process of establishing PanAmerican Capital Corporation ("PanAmerican"), purportedly a wholly-owned broker-dealer subsidiary in New York. At least one investor received a pamphlet along with the Cambridge PPM that described PanAmerican as operating a full-service investment banking and brokerage firm and contained detailed descriptions of PanAmerican's supposedly current business and management team.

38. These representations were false or misleading. Cambridge had never served as an investment adviser to any entity other than JB Stanley. PanAmerican was incorporated but never conducted any type of business operations.

C. Misrepresentations and Omissions about UTC

39. In or around February 1999, representatives of Cambridge, including Lee, sent several JB Stanley investors a letter, signed by Jean Pierre and Pearse, soliciting investments in UTC (the "UTC Letter"), a subsidiary of Cambridge. Enclosed with the UTC Letter was a pamphlet (the "UTC Pamphlet"), prepared by Jean Pierre and Pearse, describing UTC's purported business. The UTC Letter and the UTC Pamphlet each contained false and misleading statements about UTC's business, the number of shares already sold, and the safety of the investment. In particular, the UTC Letter stated that UTC had sold 60 of its 100 units for $50,000 per unit, and that UTC was a "money transmittal company registered with the New York Banking Department as a fully-fledged financial wire institution."

40. Additionally, the UTC Letter stated that UTC would repay investors their initial investments within one year and produce a 40 to 60 percent profit in subsequent years. The UTC Pamphlet stated that UTC operated a wire transfer business and was registered with the "United States Banking Department." It also contained detailed financial projections that estimated that UTC would earn a gross profit of $11,404,800 in its first year of operations. The UTC Pamphlet also stated that investors should expect to share in UTC's "multi-billion dollar business."

41. These representations were false or misleading. At the time the UTC Letter and the UTC Pamphlet were sent to investors, UTC had no operations at all. UTC was never registered as a wire transfer company with the New York State Banking Department. There is no United States Banking Department.

42. The 60 UTC units that allegedly had already been sold at $50,000 a unit were in fact held by Cambridge. Cambridge did not pay any consideration for this stock.

43. Jean Pierre and Pearse lacked a reasonable basis in fact for the financial projections contained in the UTC Letter and UTC Pamphlet or their promise to repay investors their initial investments within one year.

44. The UTC Pamphlet also contained a variety of false and misleading statements about the identity and qualifications of UTC's management team. In particular, the pamphlet stated that Jean Pierre, who was twenty-seven years old when the UTC Pamphlet was sent to investors, had twenty years of experience as an entrepreneur, and that he served as portfolio manager to several major brokerage firms. In addition, the UTC pamphlet stated that UTC had hired Steven Bush ("Bush") and Fitzgerald Gardner ("Gardner") as vice-presidents. The pamphlet further described Bush as a professional accountant and financial advisor who had served as an auditor for Fortune 500 companies and as the director of affairs for an international money transfer company. The UTC Pamphlet described Gardner as UTC's general manager and stated that he had served as a branch manager for a large New York wire transfer company.

45. These representations were false or misleading. Jean Pierre has never served as a portfolio manager to a brokerage firm, and he does not have twenty years of entrepreneurial experience. Additionally, Bush and Gardner are fictitious names. Finally, Lee who sent, or caused to be sent, the UTC Letter and the UTC Pamphlet did not conduct any meaningful inquiry to ascertain the accuracy of the statements contained therein.

D. Misrepresentations and Omissions Intended to Induce
Investors to Purchase Additional Cambridge Stock

46. Investors who purchased Cambridge stock were solicited to purchase additional shares after receiving "quarterly reports" containing false and misleading statements about a proposed merger and the value of Cambridge stock. In April 1999, several investors received a "quarterly report" signed by Jean Pierre and Pearse. The letter stated that UTC was a newly-registered subsidiary of Cambridge structured "along the lines of Western Union and Money Gram [sic]," and that, during its first year of operations, UTC would be opening offices in seven states, including New York, Texas, and Florida. Moreover, the pamphlet stated that "[u]sing a conservative estimate" UTC would have profits of at least $1 million for the fiscal year 1999 - 2000, and that Placid NK Corporation ("Placid NK"), a New Jersey based wire transfer company with more than $1 million in assets, had recently proposed a merger with UTC. After investors received the April "quarterly report," Lee telephoned at least two of these investors and offered to sell them Cambridge stock.

47. The representations in the April "quarterly report" were false and misleading. UTC was not structured anything like Western Union or MoneyGram. In fact, when the statements were made, UTC did not operate any type of business, had not made arrangements to open any offices, and did not have a license to operate as a wire transfer institution. Moreover, Placid NK never made a merger proposal to UTC.

48. In August 1999, several investors received a second "quarterly report" signed by Pearse that contained false and misleading statements about Cambridge's business and the value of its stock. The August "quarterly report" stated that the growth of UTC had caused the value of Cambridge stock to increase from $5 per share to $6.25 per share, and that Cambridge shares would increase another 20 to 30 percent during the next year. The August "quarterly report" further stated that UTC had received its certification from the State of Georgia to conduct a wire transfer business, and that UTC had established offices in Brooklyn and Haiti.

49. In addition, the August "quarterly report" stated that VIGO Remittance Corporation ("VIGO"), an international wire transfer company, had designated UTC as its correspondent in Haiti and had empowered UTC to set up payout facilities in countries where VIGO did not have payout facilities or where its payout facilities were in need of improvement. The letter also offered to sell investors additional Cambridge stock at the original price of $5 per share.

50. The statements contained in the August "quarterly report" were false and misleading. UTC filed papers with the Georgia Secretary of State to operate as a foreign corporation, but Georgia does not certify or license companies to conduct a wire transfer business. Additionally, UTC contacted VIGO about becoming an agent, but UTC has never operated as an agent of VIGO in Haiti or any other country, and was not authorized to open payout facilities on VIGO's behalf. UTC did not open its office in Brooklyn until in or around December 1999, and UTC did not operate a business in Haiti.

51. The value of Cambridge stock did not increase from $5 per share to $6.25 because of the growth of UTC. In fact, when the statements were made, UTC had no business operations. Additionally, Pearse lacked a reasonable basis in fact to predict that Cambridge stock would increase in value 20 to 30 percent within the next year.

52. At least one investor purchased additional shares of Cambridge after receiving each of the quarterly reports.

FIRST CLAIM FOR RELIEF

Violations of Section 17(a) of the Securities Act, and Section
10(b) of the Exchange Act, and Rule 10b-5 Thereunder
(Against Jean Pierre, Pearse, and Lee)

53. The Commission realleges and incorporates Paragraphs 1 through 52 by reference as if fully set forth herein.

54. The limited partnership interests in JB Stanley, and the stock of Cambridge and UTC, are securities within the meaning of Section 2(1) of the Securities Act, 15 U.S.C. § 77b(1), and Section 3(10) of the Exchange Act, 15 U.S.C. § 78c(10).

55. As part of and in furtherance of the aforementioned conduct, and as more fully described above, the Defendants, directly and indirectly, in the offer or sale, and in connection with the purchase or sale, of securities, by use of the means or instruments of transportation or communication in interstate commerce, the means or instrumentalities of interstate commerce, the mails, or the facilities of a national securities exchange: (a) employed devices, schemes, and artifices to defraud; (b) obtained money or property by means of, or otherwise made, untrue statements of material facts or omissions to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and (c) engaged in transactions, acts, practices, and courses of business that operated as a fraud or deceit upon purchasers of securities and other persons.

56. As part of and in furtherance of this violative conduct, the Defendants, directly or indirectly, made the representations alleged above. The false statements and omissions made by Defendants, more fully described above, were material.

57. Jean Pierre knew, or was reckless in not knowing, that the material misrepresentations, described above, were false or misleading.

58. Pearse knew, or was reckless in not knowing, that the material misrepresentations, described above, were false or misleading.

59. Lee knew, or was reckless in not knowing, that the material misrepresentations, described above, were false or misleading.

60. By reason of the acts, omissions, practices, and courses of business set forth in this Complaint, the Defendants have violated and, unless restrained and enjoined, will again violate, Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5.

SECOND CLAIM FOR RELIEF

Violations of Sections 206(1) and 206(2) of the Advisers Act
(Against Jean Pierre)

61. The Commission realleges and incorporates paragraphs 1 through 60 by reference as if fully set forth herein.

62. From approximately July 1997 through approximately October 1999, Jean Pierre, for compensation, engaged in the business of advising JB Stanley, either directly or indirectly, as to the advisability of investing in, purchasing, or selling securities.

63. As described above, Jean Pierre, while acting as an investment adviser, by use of the mails or means or instrumentalities of interstate commerce, directly or indirectly, employed devices, schemes, or artifices to defraud clients or prospective clients, and engaged in transactions, practices or courses of business which operated as a fraud or deceit upon clients or prospective clients.

64. As part of and in furtherance of this violative conduct, Jean Pierre knowingly or recklessly made the false and misleading statements and omissions, and engaged in fraudulent schemes, as alleged above.

65. By reason of the foregoing, Jean Pierre violated Sections 206(1) and 206(2) of the Advisers Act, 15 U.S.C. §§ 80b-6(1) and (2).

THIRD CLAIM FOR RELIEF

Violations of Section 5(a) and 5(c) of the Securities Act
(Against Jean Pierre, Pearse, and Lee)

66. The Commission realleges and incorporates Paragraphs 1 through 65 by reference as if fully set forth herein.

67. The Defendants, directly and indirectly, singly and in concert, have made use of the means or instruments of transportation or communication in interstate commerce, or of the mails, to offer and sell securities through the use or medium of a prospectus or otherwise when no registration statement has been filed or was in effect as to such securities and when no exemption from registration was available.

68. By reason of the foregoing, Jean Pierre, Pearse, and Lee violated and, unless restrained and enjoined, will again violate, Sections 5(a) and 5(c) of the Securities Act.

PRAYER FOR RELIEF

WHEREOF, Plaintiff respectfully requests that this Court:

a. Enter a Final Judgment permanently enjoining Jean Pierre, Pearse, and Lee, their officers, agents, servants, employees, attorneys-in-fact, and all persons in active concert or participation with them who receive actual notice of the injunction by personal service or otherwise, and each of them, from violating, directly or indirectly, Sections 5(a), 5(c), and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5, and permanently enjoining Jean Pierre from violating, directly or indirectly, Sections 206(1) and 206(2) of the Advisers Act.

b. Enter a Final Judgment requiring the Defendants to disgorge an amount equal to the funds and benefits they obtained illegally as a result of the violations alleged herein, plus prejudgment interest on that amount.

c. Enter a Final Judgment assessing penalties against Jean Pierre, Pearse and Lee pursuant to Section 20(d) of the Securities Act and Section 21(d) of the Exchange Act, and against Jean Pierre pursuant to Section 209(e) of the Advisers Act.

d. Grant such other and further relief as this Court shall deem just and proper.

 
Dated: January 10, 2002
New York, New York
 
  

Respectfully Submitted,


____________________________
WAYNE M. CARLIN (WC 2114)
REGIONAL DIRECTOR
Attorney For Plaintiff
U.S. SECURITIES AND EXCHANGE COMMISSION
233 Broadway
New York, New York 10279
(646) 428-1510

Of Counsel:

Edwin H. Nordlinger
Barry W. Rashkover
Mark K. Schonfeld
David Rosenfeld
Frank C. Moore, III


http://www.sec.gov/litigation/complaints/complr17303.htm

Modified: 01/11/2002