U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21116 / July 2, 2009
SEC v. Geotec, Inc. a/k/a Geotec Thermal Generators, Inc., Bradley T. Ray, William Richard Lueck, and Stephen D. Chanslor, Case No. 09-80986 CIV-COHN (S.D. Fla.) (July 2, 2009)
SEC Charges Geotec, Inc. and Three Individuals in Connection with False Filings and Accounting Improprieties
The United States Securities and Exchange Commission announced today that it filed a complaint against Geotec, Inc. a/k/a Geotec Thermal Generators, Inc., its former CEO William Richard Lueck, its current CEO Bradley T. Ray and current CFO Stephen D. Chanslor in the United States District Court for the Southern District of Florida charging them with fraud and reporting, books and records, and internal controls violations arising from two distinct securities schemes.
The SEC's complaint alleges that in the first scheme, Lueck directed Geotec to issue 100,000 shares of company stock to a purported stock promoter. The complaint alleges that Geotec and Lueck falsely stated in an April 2005 SEC filing that the stock was issued to a company employee.
The SEC's complaint further alleges that in a second scheme, Geotec, Lueck, Ray and Chanslor made false statements in one or more Geotec 2005 SEC filings concerning the company's acquisition of millions of tons of coal. Specifically, the complaint alleges that Geotec falsely stated that another company had obtained a permit for the coal Geotec acquired and failed to disclose that the coal was under a state receivership. The complaint also alleges that Geotec improperly reported the coal as inventory valued at $18.9 million, improperly reported $4.6 million in revenue from a sale of a portion of the coal, and failed to have its quarterly reports filed with the SEC reviewed by an independent accountant.
The SEC's complaint charges Geotec with violating Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 12b-11, 12b-20, 13a-1, 13a-11 and 13a-13 thereunder, and charges Lueck, Ray and Chanslor with violating Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13a-14 thereunder.
The complaint further charges Lueck, Ray and Chanslor with aiding and abetting Geotec's violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rule 12b-20 thereunder. Additionally, the complaint charges Lueck with aiding and abetting Geotec's violations of Rules 13a-1 and 13a-11 of the Exchange Act; Ray with aiding and abetting Geotec's violations of Rules 13a-1 and 13a-13 of the Exchange Act; and Chanslor with aiding and abetting Geotec's violations of Rule 13a-13 of the Exchange Act.
The Commission seeks permanent injunctive relief against all defendants, and the imposition of civil money penalties and an officer and director bar against Lueck, Ray and Chanslor.