SECURITIES AND EXCHANGE COMMISSION Washington, D.C. LITIGATION RELEASE NO. 16072 / February 25, 1999 SECURITIES AND EXCHANGE COMMISSION v. FUTREX, INC., FUTREX MEDICAL INSTRUMENTATION, INC., AND ROBERT D. ROSENTHAL, No. 1:96CV02192 (RWR)(D.D.C.) SEC OBTAINS FINAL JUDGMENTS CONCLUDING FUTREX SECURITIES FRAUD CASE The Securities and Exchange Commission has obtained a final judgment against Futrex, Inc., Futrex Medical Instrumentation, Inc. (jointly referred to as "Futrex"), and Robert D. Rosenthal, Futrex’s chairman of the board, chief executive officer, president, and treasurer, in a fraud case arising from Futrex’s private placement of securities in 1994 and abortive initial public offering in 1995. Without admitting or denying the Commission’s allegations, the defendants consented to entry of the judgment, which enjoins them from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and orders Rosenthal to pay a $50,000 civil penalty. The Commission’s complaint, filed on September 23, 1996, alleged that the defendants, in connection with Futrex’s 1994 private placement and 1995 abortive initial public offering, made materially false and misleading statements concerning Futrex’s "Dream Beam" product, a hand-held laboratory instrument that purportely could measure a person’s blood glucose level by passing infrared light through his or her finger. Among other things, the complaint alleged that the defendants fraudulently made unsupportable claims about the effectiveness of the Dream Beam, failed to disclose adverse results from studies of the Dream Beam, and staged deceptive demonstrations of the Dream Beam for prospective investors. (See also Litigation Rel. No. 15061 (Sept. 23, 1996)).