U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20762 / September 30, 2008
SEC v. Luis E. Pallais and Rodedawg International Industries, Inc, Civil Action No. 08-CV-8384 (GBD) (S.D.N.Y.) (September 30, 2008)
Commission Charges Pink Sheet Company and its CEO with Issuing False Press Releases
The Securities and Exchange Commission announced that today it filed a complaint in the Southern District of New York charging Rodedawg International Industries, Inc. ("Rodedawg Int'l") and its Chairman and CEO, Luis E. Pallais ("Pallais") with issuing numerous press releases containing false and misleading information about the company's business and its future prospects.
The complaint named the following defendants:
The complaint alleges the following. Rodedawg Int'l claims to be in the business of importing and selling various types of vehicles from China, including the Rodedawg, an amphibious vehicle that is being marketed as a hybrid between a sports utility vehicle and a boat. From late 2005 through early 2007, Rodedawg Int'l issued nearly thirty press releases touting the success of its ongoing business, when, in fact, it had no revenue or earnings. Some of these releases contained materially false information or omitted to disclose material information. For example, Rodedawg Int'l issued several press releases touting distribution agreements with foreign companies that supposedly required the distributors to order a minimum number of Rodedawg units. In fact, under the terms of these agreements, the distributors were not required to order a single vehicle.
The Commission complaint alleges that the defendants violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission is seeking permanent injunctions against Rodedawg Int'l and Pallais, and disgorgement with pre-judgment interest thereon, civil penalties, an officer and director bar and a penny stock bar against Pallais.