U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17299 / January 9, 2002
SEC v. TODD HANSEN AND NICHOLAS LOBUE, UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, CASE NO. 99-C-6386
The Securities and Exchange Commission ("Commission") announced that on December 15, 2000, the Honorable Milton I. Shadur, United States District Judge for the Northern District of Illinois, entered a Final Judgment and Order of Permanent Injunction and Other Equitable Relief ("Final Judgment") against Nicholas LoBue ("LoBue"). LoBue consented to the entry of the Final Judgment without admitting or denying the allegations in the Commission's Complaint.
The Final Judgment permanently enjoins LoBue from future violations of Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder and from aiding and abetting violations of Section 15(b)(7) of the Exchange Act and Rule 15b7-1 thereunder. The Final Judgment also orders the payment of $208,373 in disgorgement and prejudgment interest but waives payment of such amount and does not impose a civil penalty based upon LoBue's demonstrated inability to pay.
The Commission's Complaint, filed on September 29, 1999, alleged that from on or about December 1996 through approximately June 1997, LoBue and Todd Hansen ("Hansen") raised about $660,000 from investors and that Hansen and LoBue misappropriated approximately $234,000. The Complaint also alleged that Hansen and LoBue sent investors false account statements showing trading profits instead of losses. Furthermore, the Complaint alleged that Hansen and LoBue made misrepresentations and failed to state material facts about Hansen's criminal background and his actual employment status with Pavilion Securities. Finally, the Complaint alleged that Hansen was not registered with the Commission at the time he was offering for sale and selling securities to investors. The judge entered a similar Final Judgment and Order of Permanent Injunction and Other Equitable Relief against Hansen on September 22, 2000.