SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17177 / OCTOBER 11 , 2001
Securities and Exchange Commission v. U.N. Dollars Corp., Harold F. Harris, Ronald E. Crews, Edward A. Durante (a/k/a Ed Simmons), Carib Securities Ltd., Berkshire Capital Partners, Inc., Galton Scott & Golett Inc., Dottenhoff Financial Ltd., Zimenn Importing and Exporting Inc., Prudential Overseas Company, Ltd., Commonwealth Associates, Ltd., Henry C. Weingarten, Defendants; and Exchange Bank & Trust, Inc., and VJV Inc., Relief Defendants, United States District Court for the Southern District of New York, Civil Action No. 01 CV 9059.
SEC CHARGES FOURTEEN INDIVIDUALS AND ENTITIES IN STOCK MANIPULATION SCHEME
The Securities and Exchange Commission announced today that it filed a complaint in the United States District Court for the Southern District of New York against fourteen individuals and entities for their roles in a market manipulation of U.N. Dollars Corp. ("UNDR"), a former bulletin board stock based in Jacksonville, Florida. The complaint alleges that the fraud, which occurred between September 1999 and March 2000, drove UNDR's stock price from $.01 per share to an all-time high of $1.25 per share in less than six months, before the Commission suspended trading in UNDR securities on March 13, 2000. According to the complaint, Edward Durante, a recidivist securities law violator, reaped about $100,000 in illegal profits by secretly controlling the supply of UNDR stock, creating an artificial market, and then dumping the stock at artificially inflated prices. The complaint also alleges that UNDR executives participated in the scheme, and made false and misleading representations about UNDR's business activities.
The filing of the Commission's complaint coincides with the filing of criminal charges by the United States Attorney's Office for the Southern District of New York concerning a scheme to manipulate several different securities in the Spring of 2000. It is estimated that Durante and others reaped illegal trading profits of more than $30 million while orchestrating manipulations of U.N. Dollars Corp., Wamex Holdings Inc., Ramoil Management Ltd., Absolutefuture.com, and other stocks, through a network of promoters, market makers and brokers under their control.
In particular, the Commission's complaint alleges the following:
- Beginning in 1999, Edward Durante, using the alias "Ed Simmons" and seven entities that he controlled, violated the antifraud and registration provisions of the securities laws. Durante gained control over nearly all of the tradable shares of UNDR in 1999, when he contracted with UNDR to issue him 10 million shares, as part of Durante's promise to raise UNDR's stock price to the $5.00 range. Durante then manipulated the market for UNDR stock by matching buy and sell orders and purchasing UNDR stock on the open market to raise the stock's price artificially. Durante dumped more than three million UNDR shares on the market and the unsuspecting public, reaping about $100,000 in profits. As a result of the conduct alleged in the complaint, Durante, Carib Securities Ltd., Berkshire Capital Partners, Inc., Galton Scott & Golett Inc., Dottenhoff Financial Ltd., Zimenn Importing and Exporting Inc., Prudential Overseas Company, Ltd., and Commonwealth Associates, Inc. (all corporations controlled by Durante) are alleged to have violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act of 1934, and Rule 10b-5 thereunder. The Commission seeks injunctive relief, civil money penalties, and the return of proceeds from the illegal scheme from these parties, and an order permanently barring Durante from acting as an officer or director in any public company. The complaint also seeks disgorgement of proceeds from relief defendants Exchange Bank & Trust, Inc., a Nevis-based offshore private bank where Durante stashed profits from his illegal stock trading, and VJV Inc., a Nevada-based corporation owned by Durante that also received a portion of Durante's profits.
- In furtherance of the scheme, UNDR's former executives, Ron Crews and Harold Harris, of Jacksonville, Florida, hired Durante to "stimulate" UNDR's stock price to the $5.00 range. UNDR provided 10 million unregistered shares to Durante's offshore entities in a tradable form, falsely described UNDR's business on its Internet website, and issued a series of press releases misrepresenting UNDR's activities. The complaint charges that U.N. Dollars Corp., Harris and Crews violated Sections 5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Commission seeks injunctive relief and civil money penalties from these parties, and an order permanently barring Harris and Crews from acting as an officer or director in any public company.
- Henry Weingarten, a New York City "financial astrologer," featured UNDR in an e-mail newsletter and on his website, afund.com, and made price projections for the stock without disclosing his receipt of 250,000 UNDR shares. Weingarten, acting as an investment adviser, also purchased UNDR stock for investment clients' accounts without disclosing his conflict of interest or the receipt of UNDR stock to the account holders. The complaint alleges that Weingarten violated Section 17(b) of the Securities Act and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The complaint seeks injunctive relief and civil money penalties against Weingarten.
In a related matter, the Commission today ordered four Internet stock touters who made materially false and misleading statements about UNDR securities to cease and desist from committing or causing violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and required these respondents to pay disgorgement and prejudgment interest totaling $11,323.03. The touters, Millennium Group of New York LLC, Roman Suleymanov, Alex Rovner, and Gennady Favelyukis, consented to the order without admitting or denying the Commission's findings. The Internet websites used to promote UNDR were Realstocks.com, WinningStocks.com, and StocksNetwork.com. (Rel. No. 33-8023, Rel. No. 34-44919; File No. 3-10618).
The Commission acknowledges the assistance of the British Columbia Securities Commission and the United States Attorney's Office for the Southern District of New York in this matter.