U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20845 / January 7, 2009
United States of America v. Stephen C. Sayre, Case No. 05-CR-198-VBF (C.D. Cal.)
Securities and Exchange Commission v. Stephen C. Sayre, et al., Case No. CV-00-3800-MMM (JWJx) (C.D. Cal.)
The Securities and Exchange Commission announced that on November 19, 2008, the federal court in the Central District of California sentenced Stephen C. Sayre ("Sayre"), age 52, of Hollywood, California on a criminal securities fraud charge relating to his "pump and dump" stock manipulation. The sentence ordered Sayre to serve 57 months in prison to be followed by three years of supervised release. The sentence reflects a sentencing enhancement because the Court found that Sayre obstructed justice by lying under oath to the Commission during its investigation.
Sayre was criminally indicted on February 25, 2005, by a federal grand jury convened by the United States Attorney's Office for the Central District of California. The indictment alleged that, in March 2000, Sayre made materially false and misleading statements in "buy" recommendations issued through his company, Independent Financial Reports, Inc. ("IFR"), about eConnect, whose stock at the time was quoted on the Over-The Counter Bulletin Board. The indictment also alleged that Sayre purchased eConnect shares before issuing the buy recommendations and sold them at dramatically higher prices once the recommendations drove up eConnect's stock price. The indictment also alleged, however, that Sayre falsely stated that IFR held no eConnect stock and would not receive any benefit for the buy recommendations. According to court documents filed by the United States Attorney's Office, Sayre was arrested in Canada on February 3, 2006, after having fled from the United States in 2000, and extradited to Los Angeles on July 11, 2007. On July 25, 2008, Sayre was found guilty of securities fraud following a twelve-day jury trial.
The Commission previously filed a civil injunctive action against Sayre and IFR on April 7, 2000, in the United States District Court for the Central District of California, alleging the same fraudulent scheme charged in the criminal action. On May 31, 2001, the Commission obtained a default judgment against Sayre and IFR finding them liable for securities fraud, ordering them and relief defendant Silver Screen Industries, Inc. to pay approximately $1.1 million in disgorgement and prejudgment interest, and assessing a $110,000 civil penalty against Sayre.