U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21604 / July 28, 2010

SEC v. Geotec, Inc. f/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.)

DEFENDANTS GEOTEC, INC., BRADLEY T. RAY, STEPHEN D. CHANSLOR, AND WILLIAMS RICHARD LUECK SETTLE SEC ENFORCEMENT ACTION IN GEOTEC, INC. LITIGATION

The Securities and Exchange Commission announced that on July 28, 2010, the United States District Court for the Southern District of Florida entered Final Judgments, by consent, against Geotec, Inc., Bradley T. Ray, Stephen D. Chanslor, CPA, and William Richard Lueck, in connection with an enforcement action filed in 2007 that charged the Defendants with fraud and reporting, books and records, and internal controls violations arising from two distinct securities schemes.

The final judgment against Lueck enjoins him from violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5, 13b2-1 and 13a-14 thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-11 thereunder and imposes an officer and director bar. Based on Lueck's cooperation in this case, the final judgment does not impose a civil penalty against him.

The SEC's complaint alleged that 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 alleged 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 alleged 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 also alleged that Lueck improperly directed Geotec to issue 100,000 shares of company stock to a purported stock promoter in a kickback scheme.

Without admitting or denying the allegations in the Commission's complaint, Geotec, Ray, Chanslor, and Lueck consented to the entry of final judgments against them. The final judgment against Geotec enjoins it from violating Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-11, 12b-20, 13a-1, 13a-11 and 13a-13 thereunder. The final judgment against Ray enjoins him from violating Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13a-14 thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder, imposes an officer and director bar, and orders him to pay a civil penalty of $75,000.

The final judgment against Chanslor enjoins him from violating Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13a-14 thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder, imposes an officer and director bar, and orders him to pay a civil penalty of $25,000.

Chanslor also consented to the entry of an Administrative Order, pursuant to Rule 102(e) of the Commission's Rules of Practice, suspending him from appearing or practicing before the Commission as an accountant, with a right to apply for reinstatement after three years.

The final judgments against Geotec, Ray, Chanslor, and Lueck resolve the litigation in this case.

For further information, see LR-21116 (July 2, 2009).

 
http://www.sec.gov/litigation/litreleases/2010/lr21604.htm

Last modified: 7/28/2010