Litigation Release No. 17748 / September 26, 2002

SEC FILES THIRD CONTEMPT MOTION AGAINST ROC HATFIELD

SECURITIES AND EXCHANGE COMMISSION V. MARADA GLOBAL CORPORATION, et al., Case No. 94-CV-1504 (M.D. Fla).

The Securities and Exchange Commission (SEC) announced that on April 18, 2002, it filed with the United States District Court for the Middle District of Florida, an Application for an Order to Show Cause why Roc Hatfield should not be held in civil contempt for failing to comply with the Court's Order of March 26, 2002. That order, among other things, froze the assets of Hatfield and Global Diamond Fund, Inc. (GDF). The Application alleged that Hatfield, in direct contravention of a March 26, 2002 Order, transferred assets of GDF to an investor in GDF.

On March 26, 2002, the SEC filed its first motion for contempt and for other emergency relief against Hatfield and GDF for violating the Final Judgment of Permanent Injunction and Other Relief entered on September 8, 1995, in SEC v. Marada Global Corporation, et al., Case No. 94-CV-1504-CIV-T-26MAP (M.D. Fla.). The Marada final judgment prohibited Hatfield from violating the penny stock, registration and antifraud provisions of the federal securities laws in the future.

The SEC alleged that from at least September 2001 through the filing of the first contempt motion, Hatfield and GDF (a private Florida corporation founded and operated by Hatfield in St. Petersburg, Florida) violated Sections 5(c) and 17(a) of the Securities Act of 1933 and the Marada final judgment by fraudulently offering unregistered securities in the form of nine-month 24% APR high yield secured notes. On April 25, 2002, the SEC amended its motion to also allege that Hatfield and GDF were in contempt of the Marada final judgment by violating Section 5(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

On March 26, 2002, the Court entered an order freezing Hatfield and GDF's assets. Hatfield, in direct contravention of the Order, transferred assets (diamonds) of GDF to an investor in GDF.

On April 26, 2002, the Court held a hearing to decide the SEC's request for an order holding Hatfield in civil contempt and other relief. The Court made findings of fact and conclusions of law on the record during the contempt hearing. Those findings were adopted and incorporated in a May 6, 2002 Order. The Court found that Hatfield and GDF were in contempt and ordered the investor to turn over the diamonds so they may be appraised, at Hatfield's expense. Upon receipt of the appraisal, the investor would have three business days to elect to keep the diamonds or request reimbursement of the monies he invested in GDF from Hatfield. The Court also imposed a penalty of $5,000 on Hatfield and GDF each for any future violations and awarded the SEC reasonable attorney's fees and costs.