SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17175 / October 5, 2001
Accounting and Auditing Enforcement Release No. 1466 / October 5, 2001
Securities and Exchange Commission v. Richard P. Smyth, Arnold E. Johns, Jr., Michael J. Becker and Alan T. Davis, Civil Action No. 1:01-CV-1344 (N.D. Ga.)
SEC Obtains Permanent Injunction against Richard P. Smyth
The Securities and Exchange Commission ("Commission") announced today that on September 24, 2001, the Honorable Clarence Cooper of the United States District Court for the Northern District of Georgia entered an order of permanent injunction and other relief against Richard P. Smyth ("Smyth") of Fernandina Beach, Florida for engaging in a wide-range of securities law violations, including that misstatements were made by Vista 2000, Inc. ("Vista") in filings with the Commission. Vista, a now defunct consumer products company, was formerly headquartered in Roswell, Georgia where Smyth, as Vista's co-founder, served as chief executive officer and chairman of its board. Judge Cooper's recent order permanently enjoined Smyth from further violations of Section 17(a) of the Securities Act of 1933; Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder; Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, 13a-13 thereunder; Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act; Section 13(b)(5) of the Exchange Act and Rules 13b2-1 and 13b2-2 thereunder; and Sections 16(a) and 16(c) of the Exchange Act and Rules 16a-2 and 16a-3 thereunder. The order also barred Smyth from acting as an officer or director of any issuer that has a class of securities registered with the Commission pursuant to Section 12 of the Exchange Act or that is required to file reports with the Commission pursuant to Section 15(d) of the Exchange Act. Smyth was ordered to pay disgorgement and pre-judgment interest in amounts to be resolved upon motion of the Commission at a later date. Smyth consented to the entry of the order, without admitting or denying the allegations of the Commission's complaint.
The Securities and Exchange Commission previously sued Smyth and three other men for various violations of the federal securities law. The remaining defendants are Arnold E. Johns, Jr. of Atlanta, Georgia, Alan T. Davis of Gainesville, Georgia and Michael J. Becker of Marietta, Georgia. Johns, Becker and Smyth are former officers of Vista. Johns was a director of Vista and its president, and Becker was Vista's chief financial officer. Davis was Vista's outside auditor. The litigation is continuing as to Johns, Becker and Davis.
The Commission's complaint alleged a wide-range of securities law violations, including that misstatements were made by Vista in filings with the Commission. Smyth was charged with direct violations as a control person of Vista arising from those filings. The allegations against Smyth included the following: (1) Vista's revenues, income, earnings per share, and assets were overstated by him from 1994 through 1996, (2) Smyth failed to properly and accurately disclose the use of Vista's proceeds from its October 1994 initial public offering, (3) Smyth issued ten false and/or misleading press releases from 1994 through 1996, (4) Smyth misappropriated $481,000 in 1996, (5) Smyth failed to file beneficial stock ownership reports during 1994, 1995 and 1996, (6) Smyth illegally sold short Vista stock during 1996 and (7) Smyth engaged in illegal insider selling of Vista common stock during 1995 and 1996.
See also: L.R. 17044 (June 21, 2001)