SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17023 / June 4, 2001
SECURITIES AND EXCHANGE COMMISSION v. TPG CAPITAL CORPORATION, Civil Action No. 1:101CV01208 (D.D.C.) (filed June 4, 2001)
SEC FILES SETTLED ACTIONS AGAINST JAMES CASSIDY AND TPG CAPITAL CORPORATION FOR SECURITIES FRAUD AND DISCLOSURE VIOLATIONS
The Commission today announced the filing of settled actions against James Cassidy and his wholly-owned company, TPG Capital Corporation, for securities fraud and disclosure violations. The Commission alleged that, prior to selling certain "blank check" companies that they controlled, Cassidy and TPG Capital made false or misleading statements in documents that were filed with the Commission on behalf of those companies, and that they caused violations of certain books and records provisions of the Exchange Act. The transactions arranged by Cassidy and TPG Capital related to an eligibility rule, issued by the NASD in January 1999, which required all companies that displayed their stock quotations on the NASD's over-the-counter bulletin board to file periodic reports, including financial statements, with the Commission by June 2000. Pursuant to the rule, companies that did not meet the deadline would be removed from the bulletin board.
In a settled cease-and-desist Order, the Commission found that Cassidy and TPG Capital arranged reverse mergers with issuers that faced possible delisting. The Commission found that, in the course of providing these services, Cassidy and TPG Capital made false or misleading disclosures in documents filed with the Commission. The Order also found that, between May 26, 1999 and November 18, 1999, Cassidy and TPG Capital filed amended registration statements for five blank check companies that falsely stated that the companies had not engaged in negotiations with specific entities regarding a possible business combination. Further, the Commission's Order found that three of these companies filed periodic reports that falsely stated that the companies had not engaged in merger negotiations. Without admitting or denying the Commission's findings, TPG Capital and Cassidy consented to the entry of the Order, which required them to cease and desist from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and causing the violations of Section 13(a) of the Exchange Act and Rules 13a-13 and 12b-20 thereunder. [In the Matter of James M. Cassidy and TPG Capital Corporation, Rel. No. 34- 44388 (June 4, 2001)]
In a parallel federal court action, TPG Capital consented, without admitting or denying the allegations in the Complaint, to the entry of a final judgment ordering it to pay a $50,000 penalty pursuant to Section 21(d)(3)(A) of the Exchange Act.http://www.sec.gov/litigation/litreleases/lr17023.htm