SECURITIES AND EXCHANGE COMMISSION v. UNITED FIRE TECHNOLOGY, INC., et al., C97-1151R, U.S.D.C., W.D. Wash.
Litigation No. 16606 / June 23, 2000
On Friday, June 16, 2000, District Judge Barbara Jacobs Rothstein continued an asset freeze previously ordered against Beverlee Kamerling and Bobby D's Slacks, Inc on June 9, 2000. Judge Rothstein had ordered the asset freeze pursuant to the motion of the Securities and Exchange Commission to hold Kamerling and Bobby D's in civil contempt for violating the Court's August 1999 final judgment that directed Kamerling to disgorge nearly $1.5 million in ill-gotten gains and prejudgment interest. Kamerling, age 56, resides in Kirkland, Washington. Bobby D's, a British Columbia corporation, has its principal place of business in Bellevue, Washington.
In its motion for contempt, the Commission alleged that Kamerling has not paid any of the approximately $1.5 million owed under the judgment, despite the fact that she had funds to pay at least part of the judgment. Instead of paying disgorgement during the three months following the entry of the judgment, Kamerling used nearly $400,000 for personal expenses, including the purchase of $68,000 of items from an October 1999 auction of Marilyn Monroe's personal property. Kamerling displayed some of the Marilyn Monroe items she purchased on an Oprah Winfrey broadcast on November 8, 1999. The Commission seeks to have Kamerling held in civil contempt for failing to pay disgorgement as required by the judgment, and to have Bobby D's held in civil contempt as Kamerling's alter ego.
Judge Rothstein has scheduled a trial on the Commission's contempt motion in Seattle, Washington, on August 15 and 16, 2000. Pending the trial, Judge Rothstein ordered that the assets of Kamerling and Bobby D's remain frozen in the amount of $1.5 million, that Kamerling and Bobby D's provide an accounting of their assets and income. Kamerling and Bobby D's were also restrained from making any further asset transfers pending the trial.
The Commission originally sued Kamerling on July 15, 1997, alleging that Kamerling controlled United Fire Technology, Inc. ("UFT"), and directed UFT to conduct an unregistered distribution of common stock and to disseminate materially misleading information about UFT to investors. The complaint also alleged that Kamerling, among others, sold UFT common stock to investors in violation of the registration provisions of the federal securities laws. The Commission further asserted that Kamerling violated the antifraud provisions of the federal securities laws by making false and misleading statements and by failing to disclose material information about UFT's "Flamex" products and about Kamerling's involvement with UFT.
Kamerling consented to the entry of the final judgment without admitting or denying liability on August 31, 1999. The final judgment permanently enjoined her from selling unregistered securities and from violating the antifraud provisions of the federal securities laws. In addition to being ordered to disgorge her ill-gotten gains of $1,066,515.80 together with pre-judgment interest of $412,570.71, Kamerling was permanently barred from serving as an officer of director of any public corporation.
For further information, see Commission Litigation Releases No. 15415, July 16, 1997, and 16271, September 2, 1999.http://www.sec.gov/litigation/litreleases/lr16606.htm