SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17450 / April 1, 2002
SECURITIES AND EXCHANGE COMMISSION v. INTERACTIVE PRODUCTS AND SERVICES, INC., AND MATTHEW P. BOWIN, United States District Court for the Northern District of California, Civil Action No. C-98-20313 JW
COURT ENJOINS INTERACTIVE PRODUCTS AND SERVICES AND MATTHEW BOWIN IN STOCK FRAUD
A federal district judge in San Francisco enjoined Interactive Products and Services, Inc. ("IPS"), a computer accessories company based in Santa Cruz, California, and its chief executive officer, Matthew Bowin in a case charging stock fraud. On March 27, 2001, United States District Judge James Ware entered judgment against IPS and Bowin, ordering each to refrain from future fraudulent conduct and sales of unregistered securities in violation of the federal securities laws. The judgment also requires Bowin to pay $236,176 in disgorgement and interest and $110,000 in penalties.
In April 1998, the Commission sued IPS and Bowin, alleging that they had conducted a fraudulent offering of stock to the public over the Internet. The Commission alleged that IPS raised approximately $190,000 from about 150 investors nationwide. In the offering materials, Bowin and IPS represented that all offering proceeds would be held in escrow, and would be returned to investors if a minimum investment level of $500,000 were not reached by the close of the offering. The Commission charged that, even though the offering had failed to raise $500,000, Bowin misrepresented to certain investors that the offering was successful and that they would be receiving stock certificates shortly. Instead, Bowin pocketed the offering proceeds.
In 1999, Bowin was convicted in state court on fraud and grand theft charges related to the same scheme. He is currently serving a 10-year prison sentence.
In its complaint, the Commission alleged violations of Section 17(a) and the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5.