Securities and Exchange Commission
Litigation Release No. 18055 / March 31, 2003
Securities and Exchange Commission v. Global Airlines Corporation, et al., C.A. No. 03-CV-2200 (TTG) (S.D.N.Y. March 31, 2003)
SEC Sues Global Airlines Corporation and Its Chief Executive Officer Emil Bernard for Securities Fraud
The Commission announced today that it filed a Complaint alleging fraud and violations of a tender offer rule against Global Airlines Corporation, a shell company, and Emil Bernard, Global's sole owner, officer, director, and employee. The Complaint was filed in the U.S. District Court for the Southern District of New York.
The Complaint alleges that:
- Global and Bernard deceived the public by making false and misleading statements regarding Global's ability to purchase and operate two major airline companies, Trans World Airlines, Inc. and US Airways Group Inc.;
- from June through November 2000, Global, by and through Bernard, made several written offers to purchase TWA and, in November 2000, publicly announced that it would commence a tender offer for the company by the end of the month;
- from July through September 2001, Global, by and through Bernard, made several offers to purchase US Airways and, in August 2001, publicly announced that it would commence a tender offer for US Airways by the following month; and
- price and volume increases occurred in TWA and US Airways common shares following Global's tender offer announcements in November 2000 and August 2001, respectively.
The Complaint further alleges that:
- Global and Bernard, using his name and the name, "John Scott," made materially false and misleading public statements about Global's offers to purchase and proposed tender offers for the airlines; and
- the statements created the impression that Global's purchase offers and tender offer announcements were legitimate and that the deals would likely be consummated; however, consummation of either deal was remote, if not impossible Bernard knew that Global had no assets or resources with which to purchase either airline.
The Complaint charges Global and Bernard with violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Exchange Act Rules 10b-5 and 14e-8. The Commission requests that the court permanently enjoin Global and Bernard from violating the antifraud and tender offer provisions of the federal securities laws and impose a civil money penalty against them.
SEC Complaint in this matter