U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20507 / March 25, 2008
SEC v. America In Line Corporation, et. al., 02-CIV-4362 (LDW) (EDNY)
Final Consent Judgment Entered Against Former CEO and President of Issuer in Offering Fraud Litigation
The Securities and Exchange Commission announced that, on February 27, 2008, the Honorable Leonard D. Wexler of the United States District Court for the Eastern District of New York entered a final consent judgment as to defendant Peter Riccardo (Riccardo), the former President and CEO of America In Line Corporation (AIL) and America In Line of Mount Sinai Corp. (AILMS). Riccardo, without admitting or denying the allegations in the Commission's complaint, consented to the entry of a judgment, which provides: (1) that Riccardo is enjoined from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; (2) that he is barred from acting as an officer or director of a public company and from participating in a penny stock offering; and (3) that he pay a civil monetary penalty of $50,000.
According to the Commission's complaint filed on August 6, 2002, AIL, AILMS and Riccardo conducted a series of unregistered securities offerings between 1996 and 2000 in order to raise funds to construct an in-line roller hockey rink in Long Island, New York. The Commission's complaint further alleges that the offerings raised at least $650,000 from approximately 52 investors who purchased stock in AIL or AILMS through purported private placements, and AIL, AILMS and Riccardo agreed to pay unlicensed sales representatives 30% of the offering proceeds as sales commissions, thereby substantially reducing the amount of funds available for AIL and AILMS. The offering memoranda provided to investors either failed to make any disclosures concerning the commission payments or disclosed that only 8% of the investor proceeds would be used to pay sales commissions.
On September 28, 2007, the Court entered default judgments against AIL and AILMS which permanently enjoined them from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
For additional information see: Litigation Release No. 17661 (August 6, 2002)