UNITED STATES SECURITIES AND EXCHANGE COMMISSION LITIGATION RELEASE NO. 15621 / January 20, 1998 SECURITIES AND EXCHANGE COMMISSION v. Uniglobe Trading Company, Inc., et. al., 97 Civ. 08659 (USDC SDNY) The Commission today announced that the U.S. District Court for the Southern District of New York, White Plains Division, issued a preliminary injunction and entered defaults in a pending action involving the offer to sell forged and fictitious treasury bonds purportedly issued by the government of Japan. Judge Charles Brieant issued the preliminary injunction today against five defendants named in the action on December 12, 1997 in the Commission s first amended complaint: Northeast Investment Institution, Inc. (Northeast), a Fayetteville, North Carolina entity, and four representatives of Northeast including Thomas Patrick McGlon (president and a director), Daniel Watlington (secretary-treasurer and a director), William Muwwakkil (vice-president and a director) and Tyrone P. Jones, III (a "special consultant"). The Court also entered default as to Northeast, Watlington, Muwwakkil and Jones as a result of their failure to plead or defend. Watlington, Muwwakkil and Jones live in Fayetteville, North Carolina, and McGlon resides in Calhoun, Georgia. The Commission alleges that, since at least October of 1997, the Northeast defendants have been engaging in an apparent scheme to defraud U.S. investors through the offer of fraudulent Japanese treasury bonds. The Commission asserts that Northeast and its representatives have offered for sale as many as 24 treasury bonds purportedly issued by the Japanese government totaling 12 billion yen (approximately [U.S.] $120 million). The fraudulent bonds were seized by the Federal Bureau of Investigation in October 1997, but the Northeast defendants allegedly continued to offer the bonds on the theory that 12 replacement bonds were issued representing the same supposed 12 billion yen debt obligation of Japan. The Commission introduced evidence from the Japanese government, the U.S. Secret Service, two securities firms and a bank in support of its contention that the purported bonds and other documents relating to a chain of custody for the bonds are fraudulent. The Commission s complaint charges the Northeast defendants with violating the antifraud provisions, Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder. To prevent Northeast, McGlon, Watlington, Muwwakkil, and Jones from continuing to offer and potentially sell these and other fictitious securities, the Commission requested, and the Court granted, a preliminary injunction, an order freezing the bonds, and an order that the Northeast defendants tender the instruments to the registry of the Court. Further, the Judge's order requires an accounting from the Northeast defendants of all assets, including financial instruments or government bonds, held by the Northeast defendants or offered by them for sale or other transfer from September 1, 1997 to the date of the accounting. The Commission also seeks civil penalties against the Northeast defendants. ======END OF PAGE 1====== The Commission previously obtained similar injunctive relief in this action against the five original defendants. The Commission alleges in its complaint that three of those defendants offered the fictitious Japanese treasury bonds, and that all of the original defendants offered for sale at least two, and possibly as many as sixteen, fraudulent certificates of deposit of Banco de la Nacion Argentina with stated principal amounts of [U.S.] $100 million each. Judge Charles Brieant in December of 1997 issued preliminary injunctions against Uniglobe Trading Company Inc., a Yonkers, New York entity; two of its officers, Clint Holland and Margaret Laughrin; Moorgreen Holdings Limited (Moorgreen), a Gibralter company with offices in Spain; and a Moorgreen representative, Raymond Nakachian. For additional information, see litigation release numbers 15568 (November 21, 1997) and 15592 (December 12, 1997). ======END OF PAGE 2======