U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20757 / September 30, 2008
Securities and Exchange Commission v. Leonard L. Zanello, Sr., Ihor A."Gary" Humesky, Steven B. Rodd, and Robert F. Broege, Jr., Civil Action Number 1:02-CV-3308 (N.D. Ga.)
The Securities and Exchange Commission ("Commission") announced today that an application for an order to show cause why defendant Steven B. Rodd ("Rodd") should not be held in civil contempt was filed by the Commission on September 26, 2008, in the United States District Court for the Northern District of Georgia, based on his failure to pay disgorgement and civil penalties, as directed by the Court's August 30, 2007 order.
The Commission's application alleged that Rodd and others made material misrepresentations and omissions while selling investments on behalf of LinkTel Communications, Inc. ("LinkTel"), an Atlanta, Georgia company that sold and operated pay telephones. Rodd represented to potential investors that he had investigated LinkTel and that it was a profitable company. The application further alleged that Rodd did not reasonably investigate LinkTel's financial status. Rodd further represented that LinkTel was a safe investment because the investment was fully insured. In fact, LinkTel was an insolvent ponzi scheme.
On January 28, 2003, an Order of Permanent Injunction was issued against Rodd, which enjoined him from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Rodd consented to the entry of the order without admitting or denying the allegations of the Commission's Complaint, which was filed on December 10, 2002. Upon motion by the Commission, the Court entered a Final Judgment against Rodd on August 30, 2007, ordering him to pay disgorgement and civil penalties in the respective amounts of $156,366 and $50,000. Rodd has failed to make any payments on the Final Judgment.