UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16122 / April 23, 1999
Securities and Exchange Commission v. Ronnie R. Neihart and Synvion Corporation, Defendants. Civil Action File No. 1:98-CV-3341-WBH (N.D.Ga. April 19, 1999)
The Securities and Exchange Commission ("Commission") announced today that on April 19, 1999, Judge Willis B. Hunt of the United States District Court for the Northern District of Georgia entered an order setting the previously imposed civil penalty against Ronnie R. Neihart ("Neihart") in the amount of $110,000. In imposing the civil penalty against Neihart, the Court found that Neiharts violations "involved fraud and deceit and directly resulted in substantial losses to investors." The Commission did not seek a civil penalty against defendant Synvion Corporation ("Synvion").
Neihart and Synvion were permanently enjoined from further violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act") and Sections 10(b) and 13(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 13a-1 and 13a-13 thereunder in a prior order of the Court on January 20, 1999. Neihart and Synvion were found to have engaged in fraud in the offer and sale of unregistered securities in the form of Synvion common stock using misrepresentations and omissions of fact to investors. An officer and director bar was also imposed against Neihart in the prior order.
Previously, the Court found that the defendants effected the scheme by falsely representing that Synvions stock would be quoted on NASDAQ, touted false representations that the companys primary assets of ETA10 supercomputers had a value of $20 million, misrepresented the existence of contracts between Synvion and various corporations when no such contracts existed and misrepresented that Synvion had a stock lease agreement with Prudential. The Court found, that the defendants misled investors as to the status of a 1996 North Carolina cease and desist order and that Neihart used investor funds for personal items. The Court also found that Neihart and Synvion sold 11 million shares of Synvion stock to 70 investors in six states since July 1997. The Court previously ordered Neihart to pay disgorgement of $961,000 with prejudgment interest and ordered Synvion to pay disgorgement of $961,000 with prejudgment interest.
See also: L.R. 15987 (November 25, 1998); L.R. 15995 (December 8, 1998); L.R. 16038 (January 21, 1999).