THOMAS A. ZACCARO, Cal. Bar No. 183241
Attorneys for Plaintiff
UNITED STATES DISTRICT COURT
Plaintiff Securities and Exchange Commission ("Commission") for its Complaint alleges:
JURISDICTION and VENUE
1. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d)(1), and 22(a) of the Securities Act, 15 U.S.C. §§ 77t(b), 77t(d)(1) and 77v(a), and Sections 21(d)(1) and (3), 21(e), and 27 of the Exchange Act, 15 U.S.C. §§ 78u(d)(1) and (3), 78u(e) and 78aa. Defendants have, directly or indirectly, made use of the means or instrumentalities of interstate commerce, of the mails, or of facilities of a national securities exchange in connection with the transactions, acts, practices, and courses of business alleged herein.
2. Venue is proper in this district and division because certain of the acts alleged herein occurred in, and certain of the defendants transact business in, this district.
3. The Commission brings this action to stop a classic "pump and dump" scheme orchestrated by defendant Marcelino Colt ("Colt"), a Panamanian resident, to manipulate the market for securities of New Energy Corp. ("New Energy"). In early 2001, defendant Tor Ewald ("Ewald") started MegaWatt Energy Corporation ("MegaWatt") to manufacture and sell solar generators that used high concentration photovoltaic ("HCPV") technology. Even before MegaWatt generated any revenues, Ewald informed certain unidentified Mexico bankers that he was looking for investors. Ewald then connected with Marcelino Colt, who poses as an investment banker affiliated with Panamanian-based Geneva Financial Ltd. ("Geneva"). Ewald and Colt used a "reverse merger" with a public shell corporation to create New Energy as a publicly traded company that was allegedly the marketing agent for MegaWatt's HCPV generators.
4. New Energy and Colt hired defendant Magnum Financial Group, LLC ("Magnum"), a financial communications firm, to issue press releases on New Energy's behalf. Colt provided Magnum's president, defendant Michael Manahan ("Manahan"), with a draft research report that touted New Energy sharesas "one of the highest recommended BUYS ever published" (emphasis in original). After the market closed on December 18, 2001, Manahan published the research report on the Internet in the name of "Stratos Research LLC," and issued a press release on New Energy's behalf announcing the initiation of "coverage" by Stratos Research. The published research report contained several false and misleading statements, particularly in view of the fact that New Energy and its "strategic partner" MegaWatt had no revenues, no production facilities, and no firm agreements of any significance with either a supplier or a purchaser. When the market opened on December 19, the price of New Energy stock increased by almost fifty percent, and Colt and Geneva, through nominees, began selling New Energy shares into the hyped market.
5. New Energy, Colt, and Manahan issued another false press release on January 3, 2002, which falsely announced that New Energy had signed a ten-year contract to sell HCPV solar energy to a large agricultural concern. On January 10, 2002, Colt repeated to several broker-dealers at least two of the false and misleading comments that appear in the research report, during a teleconference about New Energy that had been organized by Magnum. On January 18, the Commission suspended trading in New Energy shares.
6. Between December 19, 2001, and January 17, 2002, Colt, through nominees, sold over 50,000 New Energy shares, and derived over $450,000 in illegal profits from all of the sales of New Energy shares. Almost immediately after the trades cleared, Colt caused one of his nominees to transfer the proceeds from the sales of New Energy shares from the nominee's brokerage account to a new bank account opened by this nominee, and then to disburse those proceeds to the relief defendants and others.
7. The conduct of Colt, Geneva, Ewald, New Energy, Manahan, and Magnum violated the antifraud provisions of the securities laws. By this action, the Commission seeks injunctive relief, disgorgement of ill-gotten gains,prejudgment interest, and civil penalties. In addition, the third-parties who received the proceeds of the sale of New Energy shares would be unjustly enriched if permitted to keep the proceeds of the illegal conduct, and should be required to disgorge those proceeds.
8. New Energy is a Utah corporation with offices in San Diego, California. New Energy does not manufacture any products and has no revenues. New Energy has a marketing agreement with MegaWatt, a California corporation that plans to manufacture solar generators that will use high concentration photovoltaic ("HCPV") technology. MegaWatt does not have any revenues or an operable manufacturing facility. Until the trading suspension, New Energy shares traded on the OTC Bulletin Board under the symbol "NECO."
9. Tor Ewald, age 36, resides in La Jolla, California. Ewald owns the majority of the stock of New Energy and is its Secretary and Treasurer. Ewald serves as the Vice President of Sales and Marketing for both New Energy and MegaWatt.
10. Geneva, a Nevis corporation with offices in Panama, holds itself out as an investment banking firm.
11. Marcelino Colt is a Panamanian citizen who resides in Panama and Mexico. Colt is the President, Secretary, and Treasurer of Geneva. Colt is also known as Marcelino Colt Vasquez, Marco Antonio Patterson, and Marco Antonio Patterson Garcia.
12. Magnum, a California limited liability company based in Los Angeles, California, is a financial communications, corporate development, and financial advisory firm. Magnum is affiliated with Stratos Research LLC ("Stratos Research"), a financial research firm that focuses on micro-cap companies. Stratos Research publishes its research on its Internet site at www.stratosresearch.com. Magnum and Stratos Research share the same addressand telephone numbers.
13. Michael S. Manahan, age 46, a resident of Harbor City, California, is the President of Magnum.
14. Barclay Davis, age 54, is a resident of Las Vegas, Nevada. Barclay is married to Loretta Davis, and they are the grantors and trustees of the BLD Trust. In 1997, Barclay pled guilty to one count of conspiracy to commit securities and bank fraud, and one count of money laundering. In 1998, Barclay was enjoined by the U.S. District Court for the District of Columbia from violating the antifraud, registration, manipulation, and reporting provisions of the federal securities laws.
15. Loretta Davis, age 58, a resident of Las Vegas, Nevada, is married to Barclay Davis.
16. BLD Trust is a revocable family trust created on March 15, 1999, by Barclay and Loretta Davis, who are its sole trustees. BLD Trust received New Energy shares from Colt and Geneva's nominee, and sold shares during the manipulation.
17. Burke T. Maxfield, age 52, a resident of Kaysville, Utah, was the President of UbetIgolf Corp. prior to the reverse merger that created New Energy. Maxfield transferred New Energy shares to Colt and Geneva, and received from Colt and Geneva proceeds from the sale of New Energy shares.
18. York Chandler resides in Salt Lake City, Utah. Chandler issued instructions to New Energy's transfer agent to transfer shares to Geneva, and received from Colt and Geneva proceeds from the sale of New Energy shares.
19. Hector Campa Acedo is a resident of San Ysidro, California, and received proceeds from the sale of New Energy shares from Colt's nominees. Campa is associated with Geneva. Campa is also known as Hector Campa.
THE FRAUDULENT SCHEME
The Defendants Create "New Energy"
20. In April 2001, Tor Ewald incorporated MegaWatt as a California corporation to manufacture and market solar generators based upon HCPV solar cell technology. After incorporating the company, Ewald informed certain unidentified Mexico bankers that he was interested in finding investors for his solar cell company.
21. In or about August 2001, Ewald was contacted by and met Marcelino Colt, who identified himself as an investment banker based in Panama affiliated with Geneva. Colt told Ewald that he represented international interests and had a group of investors interested in Ewald's solar energy concepts.
22. In September 2001, Ewald formed a new California corporation named New Energy Corp. ("NEC") to be a sales and marketing company that would sell HCPV generators that MegaWatt planned to manufacture. Ewald was the sole shareholder of NEC.
23. Colt and Ewald met in Mexico in September 2001 to discuss Ewald's solar energy concepts. Ewald took Colt to a warehouse in Tijuana where Ewald has stored parts that he had acquired over time. These pieces allegedly can be used to manufacture HCPV generators. Colt expressed interest in financing a public company, and proposed that Ewald agree to a reverse merger of NEC into a shell company that Colt would provide, named UbetIgolf Corp. UbetIgolf Corp. is a Utah corporation that had listed its shares for trading on the OTC Bulletin Board. Colt also proposed, and Ewald agreed, that Ewald contribute the parts stored in the warehouse in Tijuana to the merged company.
24. On or about November 17, 2001, Ewald and one of his associates in MegaWatt, Donald Nixon, met with Colt in California. Colt produced an agreement for the acquisition of NEC by UbetIgolf, which provided that UbetIgolfwould acquire 100% of the issued and outstanding shares of NEC in return for 1,667,000 shares of UbetIgolf. Ewald signed the documents for UbetIgolf to acquire NEC. Colt also produced a "Joint Marketing Agreement" between NEC and MegaWatt. This was the first time that Ewald had seen such an agreement, which provided that NEC would receive 40% of the profits on sales of MegaWatt products and MegaWatt would receive 60% of any profits. Ewald executed the Joint Marketing agreement on behalf of NEC, and Nixon signed on behalf of MegaWatt.
25. On or about November 18, 2001, the Board of Directors of UbetIgolf approved by unanimous written consent the acquisition of NEC, resolved to effect a six for one stock split of UbetIgolf shares, and appointed John McDonald as President of the company and Ewald as Secretary and Treasurer. After Ewald took control of UbetIgolf, he changed the name of the company to New Energy Corp., and applied for the new stock symbol "NECO." Ewald also received an additional 6 million shares of stock from Burke Maxfield, one of the relief defendants and the former President of UbetIgolf.
26. After the reverse merger was complete and the shares were split six-for-one, the former owners of UbetIgolf retained over 3.5 million shares of freely trading New Energy stock.
27. New Energy began trading under the new symbol NECO on the OTC Bulletin Board on December 13, 2001 at an opening price of $4.50 per share. At the time it began trading, New Energy had no office space, no revenues, and no paid employees. New Energy's marketing partner, MegaWatt, similarly had no revenues, and it had no assets, no production facility, and no approved product.
Colt Receives 800,000 Shares of New Energy Stock
28. After the reverse merger, Colt received a total of 800,000 shares of New Energy stock. The stock was transferred to Geneva at the direction of BurkeT. Maxfield, the former President of UbetIgolf, and York Chandler.
29. On or about December 10, 2001, Geneva entered into an agreement with Peregrine Financial Group, Inc. ("Peregrine"). The President of Peregrine is an associate of Colt. Under the agreement, Peregrine agreed to hold 300,000 shares of New Energy stock that it received from Geneva, and to deliver the shares or the proceeds of the sale of any shares as instructed by Geneva.
30. On December 14 and 20, 2001, Colt caused 300,000 shares of New Energy stock to be deposited into Peregrine's brokerage account. On or about January 3, 2002, Colt caused Peregrine to transfer 10,000 shares of New Energy stock to another account at the same brokerage firm held in the name of BLD Trust.
31. On December 28, 2001, Colt deposited 500,000 shares of New Energy stock into a brokerage account in Dallas, Texas, held in the name of Geneva.
Defendants Issue a Press Release and a
32. In early December, Colt contacted Ewald about hiring Magnum to provide investor relations services for New Energy, including issuing press releases. Ewald agreed to have New Energy hire Magnum. Colt volunteered to meet with Magnum on New Energy's behalf and to pay for its services in December. Ewald knew that Colt and Magnum would be issuing press releases about New Energy.
33. On or about December 4, 2001, Colt contacted Michael Manahan, the President of Magnum, and asked him to provide investor relations services for New Energy. Manahan had not met Colt before this, and had not had any dealings with either Colt or any company affiliated with Colt, including Geneva. Colt provided Manahan with a research report on New Energy that allegedly had beenwritten by an affiliate of Geneva named Barrington Research. Manahan did not have any prior knowledge of Barrington Research. At some point thereafter, Colt asked Manahan to prepare and distribute a research report on New Energy, which contained a "buy" recommendation, based upon the Barrington Research report that Colt had provided to Manahan. Manahan agreed to issue a report on New Energy.
34. After the market closed on December 18, 2001, just five days after New Energy stock began trading under the symbol NECO, Magnum published a research report on New Energy. The report identifies itself as being produced by Stratos Research. Stratos Research is affiliated with Magnum. The report was published on Stratos Research's Internet site. On the same date, New Energy through Magnum issued a press release announcing that Stratos Research had initiated coverage on it. The press release was published on the Internet, and contained a link to the research report at Stratos Research's Internet site. Neither the press release nor the research report disclosed that Magnum was affiliated with Stratos Research. The research report disclosed that Stratos Research "was paid a fee by New Energy Corporation for preparing this report." In fact, Magnum was paid a total of $8,000 after the report was published, by Colt through a nominee, from proceeds from the sale of New Energy stock by Colt's nominees.
35. The research report recommended New Energy as a "buy," and stated that "`NECO' promises to be one of the fastest growing stock companies of the next 36 months! This is one of the highest recommended BUYS ever published." (Emphasis and italics in original). When the market opened on December 19, 2001, the price of New Energy stock opened at $7.50 per share, an increase of over 57% from the prior day's closing price of $4.75 per share. Trading volume in NECO increased 453% from 5,400 shares on December 18 to 29,900 shares on December 19, 2001.
36. The research report contained several false and misleading statements about New Energy. The false and misleading statements appear in the report allegedly prepared by Geneva's affiliate Barrington Research that Colt gave to Manahan. A comparison of the reports shows that Manahan essentially copied the report supplied by Colt, changing the heading to put it under the name of Stratos Research, adding the "buy" recommendation, and making some minor stylistic changes. Magnum performed little, if any, independent research or due diligence on New Energy before releasing the research report.
37. The research report falsely claimed that New Energy had over $50 million in orders "in hand." According to the research report, the value of New Energy's orders "exceeds the reported revenues" of another Nasdaq-listed solar energy company whose market capitalization is "approaching $600 million." This statement was false and misleading because, as of December 18, 2001, New Energy had virtually no orders. New Energy's alliance partner, MegaWatt, had at best received approximately $40 million in potential orders prior to New Energy's incorporation, and no orders between that time and the release of the research report. Even if New Energy were entitled to its share of MegaWatt's preexisting orders, its 40% share of profits would only provide it with the profits on approximately $16 million of revenue (40% of $40 million).
38. The research report falsely claimed that New Energy through its relationship with MegaWatt "has all service provider contracts in-place to implement the market emergence of the MegaWatt energy system product line" and lists several providers. The research report further claimed that "Various Major Utility Companies - purchase all surplus energy generated by the New Energy solar generator systems." In fact, MegaWatt did not have service provider contracts in place with the companies identified in the research report. Further, neither MegaWatt nor New Energy had manufactured and sold a single solar generator, and no utility companies, major or otherwise, were purchasing anyenergy generated by any New Energy solar generator system. In fact, neither New Energy nor Megawatt had derived any significant revenue from any source.
39. The research report also falsely claimed that New Energy through its association with MegaWatt has "purchase orders in-place for the delivery of over [100 megawatts] of Silicone and Gallium Arsenide HCPV solar cells from the only two volume-manufacturers of HCPV solar cells in the world: Spectrolab Corp. and SunPower Corp." The report also falsely claimed that New Energy had "in effect, ordered the HCPV solar cell output for the world for the next two years," providing an advantage over potential competitors and giving New Energy a "virtual lock on the HCPV solar energy market." This claim was repeated in another paragraph of the report which asserted that New Energy would benefit from MegaWatt's claimed "virtual monopoly position and lock on current worldwide production of HCPV solar cells" (italics in original). These claims were false and misleading because, in fact, neither New Energy nor MegaWatt had purchase orders with either Spectrolab or SunPower for the delivery of any significant number of solar cells. It takes over 6,100,000 solar cells to produce 100 megawatts of energy, yet, during twelve months preceding the publication of the report, MegaWatt had made only one purchase of 50 solar cells from Spectrolab at a cost of approximately $600. MegaWatt also had made one purchase of 50 solar cells from SunPower at a cost of approximately $600. New Energy had not purchased any solar cells from either Spectrolab or SunPower. Neither MegaWatt nor New Energy had a monopoly position or lock on any HCPV solar cell production.
40. The research report also falsely claimed that New Energy's "strategic partner" MegaWatt "is currently working" with the City of Los Angeles and the Department of Water and Power of the City of Los Angeles "to prepare the city for the Company's HCPV Solar Energy Generators" and "is the only solar energy related `Green Team Partner.'" This statement was false and misleading. In fact,the LA DWP program is called "Green Power Partner," and neither MegaWatt nor New Energy was a member of the program. The only proposal that MegaWatt had submitted to the LA DWP had been rejected before August 2001. At the time the report was issued, there was no working relationship between either MegaWatt or New Energy and the LA DWP.
41. The research report also falsely claimed that New Energy had a joint venture partnership with an entity called the "Energy Company of Mexico," and that the Energy Company of Mexico "is negotiating with 107 Coca Cola Bottlers in the Republic of Mexico for 100 Therms per hour generators at $928,000 each. New Energy Corporation forecasts total sales of its energy systems for an aggregate 150 Megawatts at $ 1 Billion by year end 2003." (Emphasis and italics in original). The purported contract with 107 Coca Cola bottlers would allegedly have a value in excess of $92 million. In fact, any negotiations have been on hold since the September 11, 2001 terrorist attacks on the United States, and Coca Cola halted construction on all bottling facilities because of an attack on a facility in India immediately after September 11, 2001.
42. The person or persons responsible for writing and publishing the research report on New Energy and issuing the press release about the research report, including Colt, Geneva, Manahan, and Magnum, knew, or were reckless in not knowing, that the above-referenced statements in the research report were false or materially misleading.
43. New Energy and Ewald knew, or were reckless in not knowing, that the above-referenced statements in the research report were false or materially misleading, and in then failing to take any action to correct the research report or press release after they were issued.
44. Beginning on December 19 and continuing through January 2, 2002, Colt caused at least 35,000 shares of New Energy stock to be sold through Peregrine's account, at prices ranging from $5.63 to $7.65 per share. BetweenDecember 21 and January 2, 2002, Colt caused over $300,000 to be wired from Peregrine's brokerage account to its bank account.
Another False and Misleading Press Release was issued
45. On or before January 3, 2002, Colt supplied to Manahan and Magnum a draft press release concerning a purported ten-year contract between New Energy and an entity described as "the third-largest agricultural concern in the United States." Magnum issued the press release on behalf of New Energy at the market opening on January 3, 2002. The press release stated that New Energy had entered into a ten year contract, and stated that the agricultural concern planned to increase its solar electricity needs to 100 megawatts during that time. The press release included a quote from the President of the agricultural concern. The press release was false and misleading. In fact, the agricultural concern only plans to increase its solar energy to 10 megawatts, not 100 megawatts. In addition, the term of the contract was only for five years, with an option on the part of the purchaser to increase it another five years. Finally, the President of the agricultural concern did not supply the quote contained in the press release.
46. The press release identified New Energy as the source of the release, and Manahan of Magnum as the contact for additional information. Magnum published the report via Business Wire. The report was also posted on New Energy's Internet site at www.newenergy.com.
47. The January 3, 2002 press release had a positive effect on the price of New Energy shares. New Energy stock closed at $7.65 per share on January 2, before the press release was issued. New Energy stock opened at $8.125 per share on January 3, a 6% increase, and traded as high as $8.25 per share before closing at $7.75 per share.
48. Between January 3 and January 9, 2002, Colt caused Peregrine to sell 7,425 shares of New Energy stock, for proceeds of approximately $59,000.
49. Between January 3 and 14, 2002, Barclay Davis and Loretta Davis caused the BLD Trust to sell the 10,000 New Energy shares that it had received from Colt through Peregrine, at prices ranging from $7.70 to $9.30 per share, for proceeds of approximately $79,000.
50. Colt, Geneva, Manahan, and Magnum knew, or were reckless in not knowing, that the January 3, 2002 press release was false and materially misleading.
51. New Energy and Ewald knew, or were reckless in not knowing, that the January 3, 2002 press release was false and materially misleading, and in then failing to correct the press release after it was issued.
Colt Makes Misrepresentations About New Energy
52. On January 10, 2002, Magnum organized and held a conference call on New Energy. Colt participated in the call, as did four brokers from registered broker-dealers. During this call, Colt stated that New Energy had between $50 and $60 million in orders in hand. Colt also stated that the deal referred to in the research report that was being negotiated between New Energy, its partner the Energy Company of Mexico, and 107 Coca Cola bottlers in Mexico, had been signed. These statements were false and misleading. New Energy did not have such new orders. The deal with the Coca Cola bottlers in Mexico had not been signed.
53. Colt knew, or was reckless in not knowing, that the statements made during the January 10, 2002 call about New Energy were false or misleading.
54. On or about January 12, 2002, Ewald signed on behalf of New Energy a "Financial Communications Program Recommendations and Engagement Agreement," submitted December 2001, with Magnum, that had been executed by Manahan.
Colt Causes the Proceeds from the Sale of New Energy
55. Beginning on December 21, 2001, and continuing as additional stock sales cleared, Colt caused the proceeds of the sale of New Energy stock in the Peregrine brokerage account, in the amount of approximately $416,000, to be wired to a bank account controlled by Peregrine. Beginning on December 22, 2001, and continuing as additional monies were transferred into the bank account, Colt caused the proceeds of the sale of New Energy stock to be paid out to the relief defendants.
56. During the period from December 22, 2001 to January 18, 2002, Colt and Geneva instructed Peregrine to send approximately $120,020 from the New Energy escrow account to relief defendant Hector Campa.
57. During the period from December 22, 2001 to January 18, 2002, Colt and Geneva instructed Peregrine to send approximately $82,500 from the New Energy escrow account to relief defendant York Chandler.
58. During the period from December 22, 2001 to January 18, 2002, Colt and Geneva instructed Peregrine to send approximately $159,250 from the New Energy escrow account to relief defendant Burke Maxfield.
FIRST CLAIM FOR RELIEF
Violations of Section 17(a) of the
59. Paragraphs 1 through 58 are realleged and incorporated herein by reference.
60. The defendants, Colt and Geneva, and each of them, by engaging in the conduct described above, directly or indirectly, in the offer or sale of securities, by the use of means or instruments of transportation or communicationin interstate commerce or by use of the mails:
(a) with scienter, employed devices, schemes or artifices to defraud;
(b) obtained money or property by means of untrue statements of material fact or by omitting to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or
(c) engaged in transactions, practices or courses of business which operated or would operate as a fraud or deceit upon the purchasers of such securities;
in violation of Section 17(a) of the Securities Act.
61. By reason of the foregoing, each of the defendants violated, and unless restrained and enjoined will continue to violate, Section 17(a) of the Securities Act.
SECOND CLAIM FOR RELIEF
Violations of Section 10(b) of the Exchange Act,
62. Paragraphs 1 through 58 are realleged and incorporated herein by reference.
63. The defendants, New Energy, Ewald, Colt, Geneva, Manahan, and Magnum, and each of them, with scienter, by engaging in the conduct described above, directly or indirectly, in connection with the purchase or sale of securities, by the use of means or instrumentalities of interstate commerce, or of the mails:
(a) employed devices, schemes or artifices to defraud;
(b) made untrue statements of material fact or omitted to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or
(c) engaged in acts, practices or courses of business which operated or would operate as a fraud or deceit upon other persons;
in violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
64. By reason of the foregoing, each of the defendants violated, and unless restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court:
Issue findings of fact and conclusions of law that the defendants committed the alleged violations;
Issue in a form consistent with Fed. R. Civ. P. 65, orders temporarily, preliminarily and permanently enjoining the defendants and their officers, agents, servants, employees and attorneys, and those persons in active concert or participation with any of them, who receive actual notice of the order by personal service or otherwise, and each of them, for defendants Colt and Geneva from violating Section 17(a) of the Securities Act, and for defendants New Energy, Ewald, Colt, Geneva, Manahan, and Magnum from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder;
Issue in a form consistent with Fed. R. Civ. P. 65, a temporary restraining order and a preliminary injunction prohibiting each of the defendants from destroying documents; ordering expedited discovery; freezing the assets of defendants Colt and Geneva; with regard to relief defendants Barclay Davis, Loretta Davis, BLD Trust, Burke T. Maxfield, York Chandler, and Hector Campa Acedo freezing those assets derived from the violations of the antifraud provisions; and ordering an accounting from defendants Colt, Geneva, Barclay Davis, Loretta Davis, BLD Trust, Burke T. Maxfield, York Chandler, and Hector Campa Acedo;
Grant such other and further relief as this Court may determine to be just, equitable and necessary, including, but not limited to, disgorgement with prejudgment interest;
Enter an Order directing each defendant to pay civil penalties under the Securities Enforcement Remedies and Penny Stock Reform Act of 1990; and
Retain jurisdiction of this action in accordance with the principles of equity and the Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees that may be entered, or to entertain any suitable application or motion for additional relief within the jurisdiction of this Court.
DATED: February 1, 2002