U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17704 / August 29, 2002
SECURITIES AND EXCHANGE COMMISSION v. THOMAS CARTER, Civil Action No. CV 00-09457 GHK (SHx) (C.D. Cal.)
On August 16, 2002, a federal judge in Los Angeles entered a Final Judgment against Thomas Carter, concluding the Commission's action alleging that Carter manipulated the prices of the securities of four companies during the summer of 1999. Carter settled the action without admitting or denying the allegations in the Commission's complaint. As part of the Final Judgment, the Court issued a permanent injunction prohibiting Carter from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. The Court also ordered Carter to pay disgorgement of $12,816.47 plus prejudgment interest. The Court, however, waived the payment of disgorgement and prejudgment interest, and did not impose a civil penalty, based upon Carter's representations in his sworn financial statement and other documents submitted to the Commission.
The Commission's complaint, filed on September 6, 2000, alleged that Carter disseminated tens of thousands of e-mails, identified as the "Unity List" e-mails, which contained materially false information regarding certain companies in which Carter had recently purchased stock. The complaint further alleged that the false information concerned purported pending announcements by the profiled companies and information regarding the timing of Carter's purchases and sales of the securities of the profiled companies. The complaint further alleged that the trading volume and the stock price of each of the four companies rose dramatically immediately following Carter's dissemination of the e-mails, at which time Carter sold all of his stock in the companies at a profit.
For additional information, see Litigation Release No. 16679 (September 6, 2000).