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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20339 / October 18, 2007

In the Matter of PacketPort.com, Inc., Ronald Durando, Microphase Corp., Robert H. Jaffe, Gustave Dotoli, M. Christopher Agarwal, and Theodore Kunzog, File No. 3-12868; Securities Act Rel. No. 33-8858; Exchange Act Rel. No. 34-56672

SEC v. PacketPort.com, Inc., Ronald Durando, PacketPort, Inc., Microphase Corp., Robert H. Jaffe, Gustave Dotoli, IP Equity, Inc., M. Christopher Agarwal, Theodore Kunzog, and William Coons, III, Civil Action No. 3:05cv1747 (PCD) (D. Conn.)

SEC Institutes Settled Cease-and-Desist Proceedings Against PacketPort.com and Related Individuals and Companies Based on Registration and Other Violations

The Securities and Exchange Commission announced today that it instituted settled cease-and-desist proceedings against issuer PacketPort.com, Inc. and six individuals and companies for violations of the registration and other provisions of the Securities Act of 1933 (Securities Act) and certain reporting provisions of the Securities Exchange Act of 1934 (Exchange Act). As part of the settlement, the respondents agreed to disgorge over $1 million in connection with conduct occurring in late 1999 and early 2000. In addition to PacketPort.com, the respondents in the cease and desist proceedings are PacketPort.com's chairman, president, and chief executive officer, Ronald Durando, its chief operating officer, Gustave Dotoli, its chief financial officer, Robert H. Jaffe, two stock promoters, M. Christopher Agarwal and Theodore Kunzog, and a related company, Microphase Corp.

In connection with the settlement, the Commission's civil action against the respondents, SEC v. PacketPort.com, Inc., et al., Civil Action No. 3:05cv1747 (PCD), filed in the United States District Court for the District of Connecticut, was dismissed with prejudice. The Court also dismissed by consent charges against three other defendants in the civil action who are not respondents in the settled cease-and-desist proceedings — William Coons III, PacketPort, Inc. and IP Equity, Inc.

The Commission's cease-and-desist order finds that all seven respondents violated Section 5 of the Securities Act by making unregistered offers or sales of PacketPort.com common stock. Respondents Durando, Dotoli, and Jaffe, who were officers, directors, or beneficial owners of more than ten percent of the shares of PacketPort.com, violated Section 16(a) of the Exchange Act and Rule 16a-3 thereunder by failing to timely disclose their holdings and positions on Forms 3. Respondent Durando violated Section 13(d) of the Exchange Act and Rule 13d-1 thereunder by failing to timely disclose his acquisition of more than five percent of the stock of PacketPort.com. Respondents Agarwal and Kunzog violated Section 17(b) of the Securities Act by publishing an article concerning PacketPort.com that failed to disclose compensation from the issuer in the form of a right to purchase one million PacketPort.com shares at a discount from the market price.

The Commission ordered the respondents to cease and desist from committing or causing violations of the respective provisions of the federal securities laws they each were found to have violated. In addition, Respondent Microphase was also ordered to disgorge $700,000. Respondents Durando, Jaffe and Dotoli were ordered to disgorge $150,000, $125,000, and $100,000, respectively. The respondents consented to the order without admitting or denying its findings, except as to the Commission's jurisdiction over the matter.

 

http://www.sec.gov/litigation/litreleases/2007/lr20339.htm


Modified: 10/18/2007