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SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17357 / February 8, 2002

SECURITIES AND EXCHANGE COMMISSION v. ALEXANDER NAUJOKS aka ALEXANDER P. THORN; EXECTREK, INC., a California Corporation; ACSPORTS.COM, a Delaware Corporation; and WORLD MARKETS GROUP, INC., a Delaware Corporation, Civil Action No. 02-01073-LGB (VBKx) (C.D. Cal.)

SEC FILES LAWSUIT TO HALT FRAUDULENT SALE OF SECURITIES OF INTERNET COMPANIES

On February 5, 2002, the Securities and Exchange Commission ("Commission") filed an emergency action in federal court in Los Angeles halting an ongoing $3 million securities fraud scheme by Alexander Naujoks, aka Alexander P. Thorn, 36, of Chatsworth, California, and his companies, Exectrek, Inc. ("Exectrek"), ACSports.com, and World Markets Group (collectively, "the companies").

The Commission's complaint alleges that since approximately 1999, the defendants, operating out of their offices in Century City, California, have sold shares and raised over $3 million from investors nationwide through cold-calls and personal solicitations to finance and operate their purported online business operations. Exectrek purports to be creating an online reservation system that would cater to business travelers, permitting them to make global reservations for flights, hotels, and restaurants on the Internet. ACSports.com purports to be creating an online competitive sports league, in which players could pay a fee to play games against other players over the Internet for cash prizes. World Markets Group purports to be an investment banking firm that has been in business since 1985, and has had previous experience taking companies public. The lawsuit alleges that the defendants misrepresented that:

  • The companies would be going public via an initial public offering in 30 to 90 days when, in fact, the defendants have never had the ability or resources to take any of the companies public;

  • The offering was about to close and that only a limited number of shares were still available before going public when, in fact, defendants have always had tens of thousands of shares to sell and no intent to close the offering;

  • The investment would triple in value immediately once the companies went public, even though the companies had no performance history in any of their purported products, services, or financials;

  • Compaq and Oracle had invested in Exectrek when, in fact, no equity or other kind of investment has ever been made by these companies;

  • The companies had received a $3 million investment from an investment banking firm when, in fact, they had not; and

  • The companies were valued at $300 million and had a net asset value per share of $14 when, in fact, there was no reasonable basis for these valuations.

In response to the Commission's application, United States District Judge Lourdes Baird (1) temporarily enjoined the defendants from future violations of the securities registration and antifraud provisions, Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Sections 10(b) of Securities Exchange Act of 1934 and Rule 10b-5 thereunder; (2) froze the assets of the defendants; (3) prohibited the destruction of documents by the defendants; (4) granted expedited discovery; and (5) ordered accountings from the defendants. The Commission also seeks preliminary and permanent injunctions, disgorgement, and civil penalties against the defendants. A hearing on whether a preliminary injunction should be issued against the defendants is scheduled for February 15, 2002.

On February 5, 2002, the Federal Bureau of Investigation ("FBI") executed a search warrant at the companies' Century City office. The Commission wishes to acknowledge the assistance of the FBI, the United States Attorney's Office, and the California Department of Corporations.


*  SEC Complaint in this matter.


http://www.sec.gov/litigation/litreleases/lr17357.htm

Modified: 02/08/2002