U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19892 / October 30, 2006
SEC v. iShopNoMarkup.com, Inc., et al., Civil Action No. 04-CV-4057 (E.D.N.Y.)
Commission Obtains Final Judgment by Default Against Defendant Scott W. Brockop
The Commission announced today that on October 26, 2006, the United States District Court for the Eastern District of New York entered a final judgment by default against defendant Scott W. Brockop. The final judgment permanently enjoins Brockop from violating Sections 5 and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934, and Rule 10b-5. In addition, the final judgment finds Brockop liable for disgorgement of $41,634.10 plus prejudgment interest of $17,427.81, and directs him to pay a civil penalty of $41,634.10.
The Commission's Complaint alleged that from the fall of 1999 until the summer of 2000, defendant iShopNoMarkup.com, Inc. conducted a series of fraudulent and unregistered securities offerings. IShop distributed offering memoranda and other documents to investors that misrepresented, and failed to disclose, material information concerning iShop's business operations. Brockop and defendants Anthony M. Knight and Moussa Yeroushalmi made oral misrepresentations to investors to persuade them to invest in iShop stock. Further, Brockop supervised a "boiler room" operation at iShop, through which employees cold-called potential investors, and made material misrepresentations to induce them to purchase iShop stock. Through the offerings, iShop sold approximately 6,748,600 shares of stock to over 350 investors, and obtained proceeds of approximately $2.3 million. IShop did not file a registration statement for the sale of these securities, and there was no registration statement otherwise in effect.
The Commission is continuing to pursue this action against defendants, iShop, Knight, and Yeroushalmi.
For information about earlier developments in this matter, see Litigation Release No. 18890 (Sept. 20, 2004).