U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16385 / December 10, 1999
SECURITIES AND EXCHANGE COMMISSION v. SATCOM, INC., SATCOM MARKETING AND DISTRIBUTION, INC., TRICAP VENTURES, COASTAL ENTERPRISES, LLOYD D. PAINE, SCOTT C. MESSIER AND LAWRENCE HARVEY, Civil Action No. 99 CV 0234 IEG LAB (S.D. Cal.)
The Securities and Exchange Commission ("Commission") announced that on November 16, 1999, the Honorable Irma E. Gonzalez, United States District Judge for the Southern District of California entered Final Judgments of permanent injunction and other relief against Scott C. Messier ("Messier") and Lawrence C. Harvey ("Harvey"), both residents of San Diego, California. Messier, who is 35 years old, and Harvey, who is 38 years old, were directors of SatCom, Inc. ("SatCom") and SatCom Marketing and Distribution, Inc. ("SMD"), which are both located in San Diego, California. The Final Judgments permanently enjoin Messier and Harvey from future violation of the securities registration and antifraud provisions of the federal securities laws. The Final Judgments waive Messier and Harvey's payments of all disgorgement and interest based upon sworn financial statements demonstrating Messier and Harvey's inability to pay. Messier and Harvey consented to the entry of the Final Judgments without admitting or denying the allegations in the Commission's Complaint.
In its Complaint, the Commission alleged that Messier and Harvey participated in the offer and sale of stock in SatCom and SMD from May 1997 to February 1999. The interests were sold to over 150 investors nationwide, raising over $3 million. Messier and Harvey, and sales agents acting at their direction, misrepresented to investors that investor funds would be used for the development, manufacture, marketing and sales of SatCom's products, including a reusable space launch vehicle, and that no investor funds would be used for sales commissions. However, only about 5% of the money raised from investors was used for the stated purposes. Almost all of the investor funds received were used for undisclosed purposes, including payment of undisclosed sales commissions in excess of 40% to sales agents, undisclosed payments to Messier and Harvey and operating costs of the boiler room soliciting investors. The stock was not registered with the Commission.
The Final Judgments enjoin Messier and Harvey from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.