UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16212 / July 16, 1999
SECURITIES AND EXCHANGE COMMISSION v. THE GLOBUS GROUP, INC., et. al, No. Civ. 99-1968 (USDC S.D. Fla.)
The Commission announced today that it obtained a federal court order halting a securities fraud that was effected through three means: (1) sending spam facsimile messages ostensibly issued by reputable financial firms recommending the stocks of twelve microcap companies; (2) issuing false press releases concerning six of those microcap companies; and (3) posting on the Internet a fraudulent offering of investment interests. Charged by the Commission with engaging in such illegal conduct are The Globus Group, Inc., ("Globus"), located in Miami, Florida, and Bruce Gorcyca a/k/a Anthony DiMarco ("DiMarco"), Globus' principal. United States District Court Judge Alan S. Gold issued a temporary restraining order prohibiting Globus and DiMarco from violating the antifraud provisions of the federal securities laws and freezing their assets.
The Commission's complaint alleges that:
- The faxed recommendations made from 1997 to June 1999 often represented that the sender was affiliated with prominent financial institutions, including Prudential Securities, Merrill Lynch or Citibank, that the sender possessed favorable non-public information about the issuers, and that the issuers' stocks would be quoted on the Nasdaq SmallCap market and dramatically increase in price in the near future. The twelve microcap companies whose stocks were recommended for purchase: China Food and Beverage Co. ("China Food"); TMANglobal.com, Inc. ("TMAN"); Trans-Global Holdings, Inc. ("Trans-Global"); North Wave Communications Corp. ("North Wave"); Lasertec International, Inc.; Chill Tech Industries, Inc. ("Chill Tech"); Micromem Technologies, Inc. ("Micromem"); Converge Global, Inc. ("Converge"), Juniper Group, Inc., LaJolla Diagnostics, Inc., Aquagenix, Inc., and Top Image Systems, Ltd. The securities of all of the issuers are quoted on the Bulletin Board except for Juniper and Top Image, which are listed on the Nasdaq SmallCap market.
- The false press releases concerned six of the issuers, China Food, Trans-Global, TMAN, Converge, Chill Tech and North Wave, and were disseminated from March through June 1999. The six issuers disseminated different versions of a similar press release falsely stating that the issuers were considering an acquisition of assets worth $4 million, or that an "east coast investment banking firm," i.e., Globus, had offered to provide the issuers with $5 million or $60 million of financing. The press releases further stated that the acquisition or financing would provide the "asset value" needed to qualify them for listing on the Nasdaq SmallCap market.
- Globus' website offers interests in an investment program in which investors, through Globus, will lend money to "up and coming" public companies identified by Globus with "clearly demonstrated genuine growth potential." The website further states that the companies will issue stock to the investors as collateral, and then intentionally default on the loans. The website falsely states that: (a) the investment program is "authorized by the U.S. Government;" (b) the investment carries little or no risk; (3) investors will receive returns between 17.5% and 35% annually; and (4) stock received from defaulting public companies will have "instant liquidity."
The Commission's complaint also names as Defendants China Food and its chief executive officer, James C. Tilton ("Tilton"), and Trans-Global and one of its directors, Jacques Verhaak ("Verhaak"), but does not seek emergency relief against them. The Commission alleged that China Food, Tilton, Trans-Global and Verhaak issued the press releases prepared by DiMarco and Globus which they knew, or had reason to know, were false and have not corrected the false releases. Additionally, the Commission alleges that Trans-Global and Verhaak disseminated three other press releases in June 1999 falsely stating that the company had acquired or agreed to acquire valuable real estate in Florida.