U.S. SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 15723 / April 28, 1998
SECURITIES AND EXCHANGE COMMISSION v. Technigen Corporation, et. al., Civil Action No. 98-S-933 (USDC D. Colo.)
The Commission announced the filing of a complaint alleging a scheme to manipulate the market price of two microcap companies, Technigen Corporation ("Technigen") of Vancouver, British Columbia, and TV Communications Network, Inc. ("TVCN") of Englewood, Colorado. According to the Commission's complaint, filed in federal district court in Denver, Colorado on April 27, 1998, the objective of the manipulations was to support the market in both stocks to profitably absorb substantial distributions of unregistered stock which the defendants carried out from January 1992 through May 1993. While the manipulative scheme was ongoing, the price of both stocks remained in the $2-$4 range despite substantial increases in the outstanding shares of both companies resulting from the unregistered distributions.
Named as defendants in the action are Technigen and its former president Lawrence J. Nesis of Vancouver, British Columbia, Douglas E. Mallach of Aurora, Colorado, Sovereign Equity Management Corporation of Boca Raton, Florida and its president Glen T. Vittor, and Morton J. Glickman of Ontario, Canada.
The complaint alleges that, while engaged in an illegal distribution of unregistered Technigen and TVCN stock, the defendants participated in manipulative trading activities including prearranged and matched trading and trading through nominee accounts. The complaint further alleges that, to further inflate the market price of Technigen and TVCN stock, defendants Dambro and Mallach orchestrated a fraudulent promotional campaign for the two companies. Among other things, the complaint alleges that Dambro, Mallach and Nesis participated in preparing and disseminating a brochure which misrepresented Technigen's business operations, including purported contracts with Sony Corporation. In addition, the complaint alleges that Technigen made false and misleading filings with the Commission during the fraudulent scheme.
The complaint, which seeks injunctive relief, disgorgement of proceeds raised through the unregistered distributions, and penalties, alleges violations by some or all of the defendants of Sections 5(a), 5(c), 17(a) and 17(b) of the Securities Act of 1933, Sections 10(b), 13(a), 13(d), and 13(g) of the Securities Exchange Act of 1934, and Rules 10b-5, 10b-6, 12b-20, 13a-16, 13d-1 and 13d-2 thereunder.