UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16803 / November 17, 2000
$2 MILLION DOLLAR BOILER ROOM OPERATION SHUT DOWN IN WEST PALM BEACH, FLORIDA.
SECURITIES AND EXCHANGE COMMISSION V. INTERNET CAPITAL HOLDINGS, INC., INTERNET CAPITAL HOLDINGS II, INC., WILLIAM E. GRIFFIS AND PETER J. BUZANIS, Case No. 00-9028-CIV-HURLEY (S.D. Fla.)
The Securities and Exchange Commission (SEC) announced that on November 16, 2000, the Honorable Daniel T.K. Hurley of the United States District Court for the Southern District of Florida entered multiple emergency Orders to halt an ongoing, fraudulent offering of unregistered securities by Internet Capital Holdings, Inc. ("ICH") and Internet Capital Holdings II, Inc. ("ICH II), two unregistered investment companies.
In its Complaint and application to the Court for a temporary restraining order, asset freeze and appointment of a receiver, all of which the Court granted, the SEC alleged that ICH and ICH II have raised over $2 million from investors in the United States through a fraudulent "high-tech" stock offering. The other named defendants are Peter J. Buzanis and William E. Griffis of West Palm Beach Florida. Mr. Buzanis was the Chief Executive Officer, Secretary, and a Director of ICH and ICH II, with Mr. Griffis acting as President.
According to the SEC's Complaint, ICH and ICH II and their principals Peter J. Buzanis and William E. Griffis claimed to hold substantial equity positions, in various up and coming high tech internet start-ups, including E*Offering, Inc., Workfire.com, Inc. and Autotradecenter.com, Inc. The SEC's complaint alleges that, in reality, ICH and ICH II do not hold substantial interests in those companies.
The SEC's complaint also names Internet Capital Consultants, Inc. as a Relief Defendant. The SEC alleges that the Relief Defendant, which is controlled by the principals of ICH and ICH II received investor funds to which investors are entitled. The Court ordered that the Relief Defendants' assets be frozen pending a hearing on the SEC's motion for preliminary injunction on November 21, 2000.
The Commission seeks a final judgment: permanently enjoining ICH, ICH II, Peter J. Buzanis and William E. Griffis from committing securities fraud in violation of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and Section 15(a)(1) of the Exchange Act in connection with the offer and sale of the securities of ICH and ICH II and Section 7(a) of the Investment Company Act of 1940; ordering Defendants ICH, ICH II, Peter J. Buzanis, William E. Griffis and Relief Defendant Internet Capital Consultants, Inc., to disgorge their unjust enrichment; assessing civil penalties against them pursuant to Section 20(d) of the Securities Act and Section 21(d) of the Exchange Act.