U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18239 / July 18, 2003
SEC FILES ACTION FOR SECURITIES FRAUD
Securities and Exchange Commission v. Going Platinum, Inc., et al. (United States District Court, E.D.Pa., Civil Action No. 03-CIV-4191 (E.D. PA)
The Securities and Exchange Commission (Commission) announced that on, July 18, 2003, it filed a civil injunctive action in the United States District Court for the Eastern District of Pennsylvania against Alan H. Catalan, of Lancaster, PA and Going Platinum, Inc. (Going Platinum), a company owned and controlled by Catalan, alleging that Catalan and Going Platinum fraudulently solicited approximately $2.4 million from investors and misappropriated most of that money.
The Commission's Complaint alleges that between May of 2000 and August of 2001, Catalan and Going Platinum used the broad reach of the Internet to raise approximately $2.4 million from close to 100,000 investors in what ultimately became a Ponzi and pyramid scheme. The Complaint alleges that approximately $1 million of new investor money was used to pay obligations to existing investors for their recruitment of new investors.
The Complaint also alleges that defendants solicited investors through a combination of false and misleading representations, including false promises of great riches (up to $160,000 per month return on a $25 investment), as well as false representations concerning the company, the participation of advertisers and other website vendors, and the sources and availability of financial backing. The Complaint alleges that, contrary to defendants representations, Going Platinum was little more than an empty shell, with no significant revenues other than investor funds.
The Complaint further alleges that the defendants violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The Complaint seeks permanent injunctions, disgorgement together with prejudgment interest, and civil penalties from both Going Platinum and Catalan.
The Commission acknowledges the assistance of the East Lampeter Police Department in this matter.