Litigation Release No. 17437 / March 26, 2002
SEC FILES ACTION FOR SECURITIES FRAUD
Securities and Exchange Commission v. First Florida Communications, Inc. and Paul Richard Bell, Sr., Case No. 2:02CV-0231B (District of Utah) (complaint filed March 21, 2002)
The Securities and Exchange Commission (SEC) announced today that it filed an action for securities fraud in the United States District Court for the District of Utah against First Florida Communications, Inc., (FFCI), a Florida corporation, and Paul Richard Bell.
The SEC alleges in its complaint that between September 1998 and May 1999, Bell, as chairman of FFCI's board of directors, grossly inflated the value of FFCI's assets and misrepresented FFCI's access to funding in meetings with prospective FFCI investors. Additionally, from at least December 1998 through June 11, 1999, FFCI posted on its Internet web pages a balance sheet, prepared by Bell, which overstated the value of FFCI's assets by more than 1000 percent. During the period of the misconduct alleged herein, FFCI stock was listed on the OTC Bulletin Board.
The Commission seeks permanent injunctions against FFCI and Bell enjoining further violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and seeks disgorgement with prejudgment interest, an accounting, an officer and director bar and civil money penalties against Bell. Without admitting or denying the allegations in the SEC's complaint, except as to jurisdiction, FFCI consented to the entry of a final judgment of permanent injunction which would enjoin it from future violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.