U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20014 / February 23, 2007
SEC v. GetAnswers, Inc., et al., Case No. 03-20048-CIV-KING/O'SULLIVAN (S.D. Fla.)
Court Enters Final Judgment of Permanent Injunction and Other Relief Against Charles Ehrlich
The Securities and Exchange Commission announced that on October 18, 2006, the Honorable James Lawrence King, United States District Judge for the Southern District of Florida entered a final judgment of permanent injunction against Charles Ehrlich. Ehrlich consented to the entry of an injunction against future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 15(a)(1) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, the final judgment ordered Ehrlich to pay $531,179.35 in disgorgement, plus prejudgment interest of $59,363.75, and a $60,000 civil penalty, and barred him from participating in any offering of a penny stock.
Previously, on March 3, 2004, the SEC filed a Motion for Leave to File an Amended Complaint, in which it sought to name Ehrlich and others as additional defendants. The Amended Complaint alleged, in pertinent part, that: (1) Ehrlich personally solicited funds from GetAnswers' investors while using the alias "John Lloyd." Ehrlich used the alias to mask his identity because he is a convicted felon; (2) Ehrlich told numerous untruths to lure investors to invest in GetAnswers. Among other things, Ehrlich told investors they were purchasing the GetAnswers' stock at $3.00 per share but that it was worth $5.00. Ehrlich also told over fourteen investors that GetAnswers was seeking SEC approval to go public and/or that GetAnswers was about to be acquired by a Fortune 500 company. Ehrlich misled investors by stating that their investment was "safe" with little or no risk and that he did not receive commissions; and (3) Ehrlich was GetAnswers' top sales agent and earned over $500,000 in transaction-based commissions for selling GetAnswers' stock.
For further information, see Litigation Release No. 17933 (January 15, 2003).