SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16166 / May 27, 1999
S.E.C. v. Consumer Plus, L.C., Palmer Research and Development, and David R. Palmer, Civil Action No. 2:96CV 0930K (USDC UT)
The Securities and Exchange Commission announced that on May 20, the Honorable Dale A. Kimball, U.S. District Judge, District of Utah, entered final judgments against Consumer Plus, L.C. (Consumer Plus), Palmer Research and Development (PRD), and David R. Palmer (Palmer), permanently enjoining them from future violations of the registration and antifraud provisions of the federal securities laws.
The Commissions November 4, 1996, complaint alleged that Palmer and PRD had solicited investments in the form of interests in Consumer Plus, and that those interests could be considered investment contracts and, therefore, securities. It was alleged that in selling those unregistered interests, Palmer and PRD misrepresented, among other things: the aggregate dollar value of the securities being offered, the return on investment which could be expected, and the success of Consumer Pluss business operations. In addition, the complaint alleged that Palmer had misappropriated a significant portion of the funds invested in Consumer Plus to pay his personal expenses. The Commission alleged that by engaging in such conduct the defendants had violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Section 10(b)of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
The defendants consented to the injunctions without admitting or denying the Commissions allegations. The court waived disgorgement and determined not to impose civil penalties based on the demonstrated inability of the defendants to pay.http://www.sec.gov/litigation/litreleases/lr16166.htm