U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20517 / April 4, 2008
Securities and Exchange Commission v. The Children's Internet, Inc., Nasser V. Hamedani, Sholeh A. Hamedani, Peter A. Perez, Cort L. Poyner and Two Dog Net, Inc., Case No. C 06-6003 CW (N.D. Cal., filed on September 27, 2006)
Jury Finds Broker Liable For Fraud
The Securities and Exchange Commission yesterday obtained a jury verdict against stock promoter Cort L. Poyner of Pompano Beach, Fla., in a case entitled Securities and Exchange Commission v. The Children's Internet, et al., Case No. C-06-6003-CW. In its Complaint, the Commission had alleged that Poyner defrauded investors in a California start-up company called The Children's Internet, falsely stating that the company's stock would be listed on a national stock exchange shortly and failing to disclose that he was receiving a 25% commission for selling the stock.
The Commission charged Poyner with fraud (violation of Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 17(a)(1) of the Securities Act of 1933 ("Securities Act")); engaging in the sale of unregistered securities (violation of Section 5 of the Securities Act); and acting as an unregistered securities broker (violation of Section 15(a)(1) of the Exchange Act). Following a three-day jury trial in Oakland, Calif., the jury found Poyner liable on all counts.
The Court has directed the Commission to file papers by April 25, 2008, supporting its request for equitable and monetary relief against Poyner. The Commission anticipates seeking an order from the Court permanently enjoining Poyner from further violations, directing Poyner to disgorge his ill-gotten gains, imposing civil monetary penalties, and prohibiting Poyner from engaging in penny stock transactions.
For additional information, see Litigation Release No. 19849 (Sept. 27, 2006).