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U.S. Securities and Exchange Commission


Litigation Release No. 20984 / April 2, 2009

SEC v. Frank C. Calmes, Lynn D. Rowntree, Manny J. Shulman, James E. Pratt, et al., Case Number: 9:09-cv-80524 (S. D. Florida, filed April 2, 2009)

SEC Charges South Florida Residents and New York Attorney in Penny Stock Distribution Scheme

On April 2, 2009, the Securities and Exchange Commission filed a civil complaint in United States District Court for the Southern District of Florida against south Florida residents Frank C. Calmes, Lynn D. Rowntree, and Manny J. Shulman, New York attorney James E. Pratt, and Younger America, Inc., formerly known as Infinity Acquisition Corp. and Infinity Music Corp., alleging that the defendants conducted an illegal penny stock distribution scheme that generated ill-gotten gains of approximately $3.9 million between 2004 and 2008.

The complaint alleges that Calmes, Rowntree, and Shulman devised a scheme to illegally sell large amounts of stock of small companies after they had arranged for the companies' shares to be publicly quoted. According to the complaint, these illegal stock distributions were often facilitated by baseless legal opinion letters written by Pratt and in some cases by fraudulent wash trades by Rowntree. The complaint further alleges that Calmes and Shulman took control of Younger America, one of the companies they had helped become publicly quoted, and disseminated false information to facilitate illegal sales of its stock by themselves and others. According to the complaint, many of Shulman's illegal sales were made through accounts held by his wife, Krystal A. Becnel, who is named in the Commission's complaint as a relief defendant.

The Commission's complaint alleges that Calmes, Rowntree, and Shulman violated the antifraud provisions of the securities laws contained in Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and that all of the defendants violated the registration provisions contained in Sections 5(a) and 5(c) of the Securities Act of 1933. The Commission seeks officer and director bars against Calmes and Shulman, penny stock bars against Calmes, Rowntree, Shulman, and Pratt, and disgorgement, plus prejudgment interest, and civil penalties against all of the defendants.



Modified: 04/02/2009