UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16377 / December 2, 1999
SEC V. OMNI INTERNATIONAL TRADING, INC., et al., D.Minn., CIVIL ACTION NO. 97-2116, FILED SEPTEMBER 17, 1997.
The Commission announced the entries of Orders of Permanent Injunction and other Equitable Relief against Michael A. Wilcox ("Wilcox") and Scott A. Rude ("Rude") on November 30, 1999. Wilcox and Rude consented to the entry of the orders without admitting or denying the allegations of the Complaint. The orders were based on the Commission's Complaint, which was filed on September 17, 1997 and alleged that, from in or about January 1991 through in or about February 1995, hereinafter referred to as the relevant time period, Wilcox, Rude and the other defendants defrauded public investors through the offer and sale of over $4 million in Omni International Trading, Inc. ("Omni") securities. These securities were not registered with the Commission. The Commission's Complaint also alleged that throughout the relevant time period, Wilcox, Rude and the other defendants, in connection with the offer and sale of these Omni shares, made numerous misrepresentations and omitted to state material facts regarding, among other things, Omni's future revenues, the use of proceeds, the listing of Omni securities for trading on the National Association of Securities Dealers Automated Quotations system, a purported tender offer, the expected profit to be made on the tender offer and the commissions to be earned. In addition, the Commission's Complaint alleged that Rude and others acted as an unregistered broker or dealer.
The Honorable David S. Doty of the U.S. District Court for the District of Minnesota entered the orders enjoining Wilcox from future violations of Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 promulgated thereunder. The orders also enjoined Rude from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act, Sections 10(b), 15(a)(1) and 15(c) of the Exchange Act and Rules 10b-5 and 15c1-2 promulgated thereunder. The orders also found that Wilcox should pay disgorgement in the amount of $286,516 respectively, plus prejudgment interest, however, payment of all but $80,000 was waived based on Wilcox's demonstrated inability to pay. The orders further found that Rude should pay disgorgement in the amount of $237,351, plus prejudgment interest, however, payment was waived based on Rude's demonstrated inability to pay.