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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20748 / September 26, 2008

Securities and Exchange Commission v. Charles Adams, Civil Action No. CV-08-80189 MISC WHA (N.D. Cal. September 25, 2008)

SEC Files Action to Enforce Subpoenas

On September 25, 2008, the Securities and Exchange Commission filed a subpoena enforcement action in the United States District Court for the Northern District of California against Charles Adams, an individual who failed to respond to multiple subpoenas issued in a Commission investigation.

The Commission's application alleges that, on March 19, 2008, the Commission issued a formal order of investigation authorizing the staff to investigate whether Pegasus Wireless Corporation, its officers, and others violated Section 5 of the Securities Act, 15 U.S.C. § 77e, by offering or selling stock without a registration statement or exemption, and Section 10(b) of the Securities Exchange Act, 15 U.S.C. § 78j (b), and Rule 10b-5 thereunder, by making materially false statements or omitting material facts in press releases and SEC filings about Pegasus' financing, business prospects, use of funds, and financial condition. According to the court filing, the Commission staff is investigating, among other things, whether Pegasus made false statements in its Commission filings regarding the issuance of nearly half a billion shares of Pegasus stock to Mr. Adams and others in satisfaction of supposed debts owed by the company.

Pursuant to three separate subpoenas issued to him by Commission staff, Mr. Adams was obligated to appear for testimony at the San Francisco Regional Office of the Commission. The subpoenas also required Mr. Adams to produce documents to Commission staff in the San Francisco Regional Office. Mr. Adams failed to appear for testimony on the required dates and did not produce any documents.

Accordingly, on September 25 the Commission filed its Application for an Order Compelling Compliance with Administrative Subpoenas. A hearing on the Commission's application has not yet been scheduled.

Application Order

 

http://www.sec.gov/litigation/litreleases/2008/lr20748.htm


Modified: 09/26/2008