Darko S. Mrakuzic

U.S. Securities and Exchange Commission

Litigation Release No. 21441 / March 8, 2010

Securities and Exchange Commission v. Darko S. Mrakuzic, Civil Action No. 8:08-cv-993-T-27-MAP (M.D. Fla.)

Jury Finds Darko S. Mrakuzic Guilty in Connection with a Pump-and-Dump Scheme

The Securities and Exchange Commission announced today that a jury found Darko S. Mrakuzic liable for violating the anti-fraud and registration provisions of the federal securities laws in connection with a scheme to illegally convert several million illegally issued shares of a small, Florida corporation into purportedly unrestricted shares that netted Mrakuzic more than $6 million in profits.

Following a five-day trial in U.S. District Court in Tampa, Florida, the seven-member jury found Mrakuzic, a Canadian citizen who resides in Vancouver, British Columbia, liable for violating Sections 5(a) and (c) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. U.S. District Judge James D. Whittemore will determine remedies and sanctions at a later date.

Mrakuzic was the only one of the seven defendants whom the Commission sued in May 2008 to take the case to trial. The other six defendants resolved the action earlier. The Commission's evidence at trial showed Mrakuzic and the other defendants engaged in a complex scheme from June through August 2005 to create and sell shares of Global Development and Environmental Resources Inc., a purported environmental remediation company that was based in Las Vegas, Nevada.

The evidence showed the scheme involved creating a promissory note convertible into Global Development shares that were fraudulently backdated to avoid the holding requirements for restricted stock under Rule 144. The defendants then arranged a forged assignment of the note to three foreign entities, one of which was under Mrakuzic's control and two others where he secretly owned brokerage accounts. The third step in the scheme was to convert the note into unrestricted shares.

The last step involved the defendants promoting the stock by arranging for Global to issue press releases that contained false and misleading information relating to the company's purported clients, pending contracts and revenue projections. The resulting inflated market allowed Mrakuzic to sell the shares through the foreign entities for profits in excess of $6 million.

The other defendants, Global Development, Carmine J. Bua, Anthony M. Cimini Sr., Philip Prichard, Pietro Cimino, and Dante M. Panella, all previously settled the Commission's anti-fraud and securities registration charges against them by consenting, without admitting or denying the Commission's allegations, to permanent injunctions. All the individuals consented to penny stock bars, and Cimini, Pritchard, and Cimino consented to officer-and-director bars. The Court previously ordered disgorgement and civil penalties against Bua and Panella, with monetary orders still to be decided against the others.

For additional information, see Litigation Release No. 21294 (November 16, 2009); Release No. 20908 (February 23, 2009), and Release No. 20598 (May 23, 2008).