U.S. Securities and Exchange Commission
Litigation Release 18328 / September 8, 2003
Securities and Exchange Commission v. New Energy Corp., Tor Ewald, Geneva Financial Ltd., Marcelino Colt aka Marcelino Colt Vasquez, Magnum Financial, LLC, Michael S. Manahan, BLD Trust, Barclay Davis, Loretta Davis, Burke T. Maxfield, York Chandler, and Hector Campa Acedo, Civil Action No. CV-02-989-MMM (CWx) (C.D. Cal.)
The Securities and Exchange Commission today announced that on August 19, 2003, the United States District Court in Los Angeles entered a final judgment against an individual who claimed to be an investment banker who orchestrated a "pump and dump" scheme to manipulate the price of New Energy Corp. securities over the Internet.
Marcelino Colt, aka Marcelino Colt Vasquez, who claimed to be an investment banker and a resident of Panama and Mexico, and his firm, Geneva Financial Ltd., a Nevis corporation that purported to be an international investment banker, failed to answer the complaint filed on February 1, 2002. The final judgment permanently enjoins Colt and Geneva from future violations of the antifraud provisions of the federal securities laws. The judgment orders Colt and Geneva to pay civil penalties of $120,000 and $600,000, respectively, and to disgorge $495,848, which represents the amount of their ill-gotten gains as a result of the conduct alleged in the Commission's Complaint, plus prejudgment interest. The judgment also orders another defendant who did not answer the Commission's Complaint, Hector Campa Acedo, to disgorge $120,020 representing ill-gotten gains as a result of the conduct alleged in the Complaint and later disbursed to him, plus prejudgment interest.
Colt and Geneva, along with New Energy and its president, Tor Ewald, and Magnum Financial LLC dba Stratos Research LLC, and its president, Michael S. Manahan, were charged with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Colt and Geneva were also charged with violating Section 17(a) of the Securities Act of 1933.
The Commission's complaint alleged that New Energy and Ewald were part of a "pump and dump" scheme to manipulate New Energy's stock price during a one-month period ending on January 18, 2002, when the Commission suspended trading. The Commission's complaint alleged that Colt orchestrated the manipulative scheme, including the hiring of Magnum to post a false and misleading buy recommendation, the distribution of mass e-mails or spam containing fraudulent statements, issuing a false and misleading press release, and placing the release onto New Energy's website. These statements included, among other things, false and misleading claims regarding a relationship with the Los Angeles Department of Water and Power, negotiations with Coca-Cola bottlers in Mexico for thermal generators, and false claims that New Energy's partner had a "virtual lock" on the world market for high concentration solar cells.
Previously, Judgments were entered against New Energy, Ewald, Magnum, and Manahan that enjoin them from future violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. New Energy, Ewald, Magnum, and Manahan consented to the entry of the Judgments without admitting or denying the Commission's allegations. The Judgments order that New Energy, Ewald, Magnum, and Manahan shall pay any monetary relief in amounts subsequently to be determined by the Court.
Previously, pursuant to the consent of the parties, the Court entered a limited asset freeze against relief defendants York Chandler and Burke Maxfield. The Court froze $82,500 of Chandler's assets and $159,250 of Maxfield's assets pending the final resolution of the Commission's action against them. These amounts represent alleged ill-gotten gains from trading New Energy shares.
For further information, see Litigation Release No.17350 (February 4, 2002).