UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16463 / March 7, 2000
SECURITIES AND EXCHANGE COMMISSION v. WHITWORTH ENERGY RESOURCES, LTD.; WILLISTON BASIN HOLDING CORP.; AMERIVEST FINANCIAL GROUP, INC.; PETER SACKER; JERRY W. ANDERSON; AND ROBERT M. KERNS, Civil Action No. 97-6980 CAS (SHx) (C.D. Cal.)
The Securities and Exchange Commission announced that on February 28, 2000, the Honorable Christina A. Snyder of the Central District of California issued a Judgment Of Civil Contempt Against Attorneys Richard Sherman, Robert Young, Allison Arabian and Eric Mercer. The Court issued its contempt judgment based on findings that the attorneys violated asset freeze orders previously issued by the Court. Specifically, the attorneys received $98,980 of the over $830,000 fraudulently raised from investors by Defendants Peter Sacker, Jerry W. Anderson and Robert M. Kerns in violation of the Court's temporary restraining order issued September 22, 1997, and preliminary injunction entered October 16, 1997.
The Court ordered that within ten days the contemnor attorneys disgorge the following amounts that they received in violation of its asset freeze orders: Sherman is to disgorge $54,980; Young is to disgorge $17,500; Arabian is to disgorge $5,000; Mercer is to disgorge $21,500. Sherman, Young and Arabian acted as counsel to Defendants Sacker and Kerns; Mercer was counsel to Defendant Anderson. The Court found that the attorneys each had knowledge of the Court's asset freeze orders at the times they received the above amounts.
The Court further ordered that each of the attorneys provide accountings under penalty of perjury setting forth the source of attorneys' fees, the services rendered, time sheets, and all fee agreements relating to the services they have rendered following entry of the temporary restraining order up through the present. Additionally, although it denied without prejudice the Commission's motion for judgment of civil contempt against four other attorneys who received monies, the Court ordered that those four attorneys also provide sworn accountings. The additional attorneys ordered to account for funds they received are Theodore A. Cohen, Paul L. Gabbert, Pat K. Bowen and H Thomas Fehn.
Previously, on April 2, 1999, after trial, the Court entered a final judgment against Defendants Sacker, Anderson and Kerns enjoining them from future violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, ordering them to disgorge their ill-gotten gains, and assessing civil penalties against them. On April 19, 1999, the Court entered a judgment of civil contempt against Defendant Anderson and others, and on September 1, 1999, the Court entered a judgment of civil contempt against Defendants Sacker and Kerns, finding that the Defendants had violated the Court's preliminary injunction by fraudulently raising an additional $830,000 from investors, and ordering them to disgorge additional ill-gotten gains.
See also Litigation Releases 16111 (April 14,1999); 15534 (October 16, 1997); 15505 (September 24, 1997).http://www.sec.gov/litigation/litreleases/lr16463.htm