U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17160 / September 28, 2001
S.E.C. v. TELnetgo2000, Inc. and Wayne E. Mullins, Docket No. CIV 01-1822PHXSRB (U.S.D.C., D. Ariz.)
A complaint was filed in the United States District Court for the District of Arizona, Phoenix Division, on September 26, seeking permanent injunctions against TELnetgo2000, Inc. and Wayne E. Mullins, TELnet's chief executive officer, and the imposition of civil money penalties against Mullins.
The complaint alleges that TELnet and Mullins, made unreasonable projections of revenues and earnings in a series of quarterly and annual filings with the Commission and in a private placement memorandum through which the company raised approximately $1 million from investors. TELnet repeatedly stated in filings and in the private placement memorandum that the company would realize annual revenues of over $80 million and gross earnings of more than $50 million from marketing its proprietary pull tab bingo gaming table to Indian casinos throughout the country. TELnet and Mullins also misrepresented in both the private placement memorandum and in its filings with the Commission the number of bingo tables that would be placed in Indian casinos. Finally, the private placement memorandum and three of the company's filings with the Commission failed to disclose that TELnet had not obtained a required license from the National Indian Gaming Commission to place its bingo tables in Indian casinos.
It is alleged that by engaging in such conduct TELnet and Mullins violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and that Mullins aided and abetted TELnet in violating Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder.