U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16346 / November 1, 1999
Securities and Exchange Commission v. Jason R. Rosenthal, Civil Action No. 99-CV-11010 (RWZ) (D. Mass.)
The Securities and Exchange Commission today announced the entry of a final judgment by consent against Jason R. Rosenthal based upon charges that he violated the antifraud and registration provisions of the federal securities laws in connection with an offering of unregistered securities on the Internet. The Commission's complaint, filed on May 10, 1999, alleged that beginning in November 1998, Rosenthal used the Internet to solicit investors to purchase unregistered securities in entities formed to purchase and operate franchises to sell and support software for operating commercial web sites. The securities were issued by a company known as VentureLink Capital Corporation or one of its affiliates. According to the complaint, Rosenthal's Internet solicitations fraudulently projected investment returns of 500% to 2000% within two years and misrepresented the investment as an opportunity to invest in a company that had obtained millions of dollars of start-up capital from the same venture capitalists who had provided the initial capital for Microsoft and Intel. Further, Rosenthal allegedly misled investors to believe that the entities in which they would be investing were planning an initial public offering that would generate substantial profits for investors. The Commission further alleged that Rosenthal's solicitations yielded investments from three investors, totaling $50,000, and commissions to Rosenthal in the amount of $5,000. Rosenthal was not registered with the Commission as a broker-dealer, nor was he associated with any broker-dealer registered with the Commission. Rosenthal resides in Dunedin, Florida.
The Commission charged Rosenthal with violating the general antifraud, securities registration and broker-dealer registration provisions of the federal securities laws i.e., Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The final judgment, which was entered on October 22, 1999, permanently enjoins Rosenthal from violating those provisions in the future and holds Rosenthal liable for disgorgement of his commissions plus prejudgment interest thereon. However, payment of disgorgement was waived, and no civil monetary penalty was imposed, based upon Rosenthal's demonstrated financial inability to pay. Rosenthal consented to the entry of the final judgement on a neither admit nor deny basis.
For further information, please see Litigation Release No. 16133 (May 11, 1999).http://www.sec.gov/litigation/litreleases/lr16346.htm