SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17061 / July 5, 2001
SECURITIES AND EXCHANGE COMMISSION v. TRADAMAX GROUP, INC., PATTINSON HAYTON, AND CONRAD DIAZ, Civ. No. 01-589-GLT (USDC CD Cal)
The Commission announced today that on July 2, Judge Gary L. Taylor granted a preliminary injunction by consent against Tradamax Group, Inc. ("Tradamax"), its control person, Pattinson Hayton ("Hayton"), and its chief financial officer, Conrad Diaz ("Diaz").
The Court's Order preliminarily enjoins: (a) Tradamax from violating Section 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 10(b), 13(a) and 13(b)(2)(A) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rules 10b-5, 12b-20, 12b-25, 13a-1, 13a-11, and 13a-13 thereunder; (b) Hayton from violating Sections 17(a)(1), 17(a)(2), 17(a)(3), 5(a), and 5(c) of the Securities Act, Sections 10(b), 13(d) and 16(a) of the Exchange Act, and Rules 10b-5, 13d-1, 16a-2, and 16a-3 thereunder and from aiding and abetting or causing violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act, and Rules 12b-20, 12b-25, 13a-1, 13a-11, and 13a-13 thereunder; and (c) Diaz from violating Sections 10(b) of the Exchange Act, and Rules 10b-5, thereunder and from aiding and abetting or causing violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act, and Rules 12b-20, 12b-25, 13a-1, 13a-11, and 13a-13 thereunder. Judge Taylor also ordered that the assets of Tradamax, Hayton and of two privately held Canadian corporations named as relief defendants be frozen pending determination of the matter on the merits. The Court's Order also prevents the defendants from altering or destroying documents. Judge Taylor previously issued a temporary restraining order granting similar relief.
The Commission's June 21, 2001 complaint, filed in the U.S. District Court for the Central District of California, alleges that since November 2000 the defendants made numerous fraudulent public statements regarding: (1) the control of Tradamax by Hayton, who has been found liable for securities law violations and other illegal conduct; (2) the identity of its chief executive officer; (3) the company's product, purportedly an Internet "portal" website designed to facilitate trading in, and track the shipment of, various commodities; (4) claimed business relationships; and (5) projected revenues and income. According to the complaint, these fraudulent statements were made in press releases, Internet websites, "spam" e-mail messages, Internet message boards, reports filed with the Commission, and promotional materials distributed to prospective investors.
Also according to the complaint, a Canadian corporation controlled by Hayton sold Tradamax stock into the resulting inflated market for profits of at least $114,408. Further, the complaint alleges that Tradamax has failed to maintain adequate books and records and file reports with the Commission, and that Hayton has sold securities in nonexempt and unregistered transactions and failed to file mandatory reports with the Commission disclosing his beneficial ownership of Tradamax. For more information, see Litigation Release No. 17046 (June 21, 2001).
The Commission seeks permanent injunctions against Hayton, Diaz, and Tradamax; disgorgement against Tradamax and Hayton; civil money penalties against Hayton and Diaz; and an officer and director bar against Hayton.
For tips on how to avoid Internet "pump-and-dump" stock manipulation schemes, visit http://www.sec.gov/investor/online/pump.htm. For more information about Internet fraud, visit http://www.sec.gov/divisions/enforce/internetenforce.htm. To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml.