UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16619 / July 6, 2000
SECURITIES AND EXCHANGE COMMISSION v. LOUIS G. KARABOCHOS, KATHY D. KARABOCHOS, KENNETH E. RATTO AND STEPHEN L. BOYD, United States District Court for the Northern District of California, San Francisco Division, Civil Action No.: 98-3718 MMC.
COURT ENTERS JUDGMENT AGAINST GATEWAYS TO SPACE SALES AGENT FOR OFFERING FRAUD
United States District Judge Maxine M. Chesney entered judgment against Stephen L. Boyd of Chico, California, for his role in a fraudulent sale of unregistered stock in Gateways to Space, Inc. The judgment, entered June 20, 2000, forbids Boyd from violating the antifraud and registration provisions of the federal securities laws and requires him to pay disgorgement of $102,084 and a civil money penalty of $50,000.
The Commission alleged in its action that Boyd was employed by Gateways owner Louis Karabochos in 1995 to sell unregistered, restricted Gateways stock to investors. Gateways, a company formerly based in Pleasanton, California, marketed videotapes about space exploration. Boyd and others sold Gateways stock to over 850 investors nationwide. Investors lost approximately $5 million when the company collapsed. In selling the stock, Boyd failed to disclose that he was being paid commissions on the sales. Indeed, when asked about commissions by some investors, Boyd denied that he was being paid commissions.
The judgment enjoins Boyd from future violations of 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.