SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17050 / June 25, 2001
SEC OBTAINS FINAL JUDGMENTS AGAINST VLADISLAV STEVEN ZUBIKS AND Z-3 CAPITAL CORPORATION INCLUDING MULTI-MILLION DOLLAR DISGORGEMENT AND BAR ON ZUBKIS FROM SERVING AS AN OFFICER OR DIRECTOR OF ANY PUBLIC COMPANY.
Securities and Exchange Commission v. Vladislav Steven Zubkis, International Brands, Inc., Z-3 Capital Corporation, and Mark Scialdone, 97 Civ. 8086(JGK/KNF), U.S.D.C., S.D.N.Y.
The Securities and Exchange Commission ("Commission") announced that on Thursday, June 21, 2001, the Honorable John G. Koeltl of the United States District Court for the Southern District of New York entered final judgments against Vladislav Steven Zubkis ("Zubkis") and Z-3 Capital Corporation ("Z-3"), a company Zubkis controls. The judgments enjoin Zubkis and Z-3 from further violations of the federal securities laws, require them to disgorge millions of dollars of ill-gotten gains, and bar Zubkis from serving as an officer or director of any public company. Zubkis, age 41, resides in Bonita, California, near San Diego. Z-3 operates also from Bonita, California. Zubkis is the president and chief executive officer of International Brands, Inc. ("International Brands"), formerly Stella Bella Corporation, U.S.A., now also operating from Bonita, California. International Brands common stock is quoted on the National Association of Securities Dealers Bulletin Board under the symbol "INBR."
The judgments permanently enjoin Zubkis and Z-3 from violating the federal securities laws by:
The judgments require Zubkis to disgorge his ill-gotten gains of $12,544,313.25 and prejudgment interest of $9,034,418.34, for a total of $21,578,731.39. Z-3 is required to disgorge its ill-gotten gains of $4,026,500 and prejudgment interest of $3,012,403.53, for a total of $7,038,901.53, which obligation is joint and several with Zubkis.
The judgment against Zubkis also finds "that Zubkis's conduct demonstrates substantial unfitness for him to serve as an officer or director" of any public company, and permanently prohibits Zubkis from serving as such. A "public company" is one which has any class of securities registered pursuant to Section 12 of the Exchange Act or which files reports pursuant to Section 15(d) of the Exchange Act. International Brands, which files reports pursuant to Section 15(d) of the Exchange Act, is a public company.
The Commission brought this action against Zubkis, Z-3, International Brands, and Mark Scialdone in October 1997. The Commission alleged in its complaint that:
The court entered a default judgment against Z-3 for its failure to answer the complaint, and the court later entered a summary judgment against Zubkis. Judge Koeltl ordered that Magistrate Judge Kevin Nathaniel Fox conduct an inquest (hearing on damages) to determine the amount of disgorgement to be ordered from Zubkis and Z-3. Following the inquest, Magistrate Judge Fox recommended the amounts of disgorgement, and Judge Koeltl entered judgment in accordance with the recommendations.
International Brands consented to the entry of a final judgment prohibiting it from violating the federal securities laws in 1999. The Commission's action against Scialdone is continuing.