U.S. Securities and Exchange Commission
Litigation Release No. 21094 / June 22, 2009
Securities and Exchange Commission v. Pinnacle Business Management, Jeffrey G. Turino, et al., No. 8:02CV-822-T-17 (EAK) (M.D. Fl. June 16, 2009)
Recidivist Securities Law Violator Jeffrey G. Turino Held in Contempt; Ordered to Pay $9.95 Million; Permanently Banned From Participating In Penny Stock Offerings
The Securities and Exchange Commission today announced that, on June 16, 2009, the Honorable Elizabeth A. Kovachevich, United States District Judge for the Middle District of Florida, entered an order of civil contempt against defendant Jeffrey G. Turino. In addition to finding Turino in contempt, the Court ordered him to pay $9.6 million in disgorgement, plus $348,423.24 in prejudgment interest, and permanently banned him from participating in any penny stock offering.
In her ruling, Judge Kovachevich found that the Commission had demonstrated by clear and convincing evidence that Turino acted in flagrant and repeated contempt of the penny stock bar that she had imposed against him in December 2003 in connection with a previous Commission enforcement action brought against Turino in May 2002. In that action, the Commission had alleged that Turino, one of his associates, and the penny stock company they operated, Pinnacle Business Management, Inc., had committed securities fraud by making materially false and misleading statements about Pinnacle’s business operations. Turino settled this enforcement action by consenting to the entry of a permanent fraud injunction, a permanent officer and director bar, payment of a $60,000 civil penalty, and a five-year penny stock bar.
In its motion to hold Turino in contempt, the Commission outlined its evidence that Turino had violated the five-year penny stock bar by, first, spearheading the reverse merger in 2004 of a penny stock issuer and arranging the resulting penny stock offering and, second, by using two nominees, one a former exotic dancer whom he had been dating, and the other a former nightclub manager, to participate in penny stock offerings by four other issuers during 2006 through 2008. Turino gave detailed instructions to his nominees to create corporations, open bank and brokerage accounts, buy, sell, and transfer billions of shares of penny stock companies, and deposit, withdraw, and distribute millions of dollars worth of penny stock proceeds to his friends and family. Altogether, Turino improperly obtained at least 3.5 billion shares of penny stocks. He subsequently sold at least 1.8 billion of these shares into the U. S. securities markets, generating approximately $9.6 million in ill-gotten proceeds.
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