The Securities and Exchange Commission ("Commission") announced that on March 4, 2004, the district court for the District of Nevada entered a final judgment against Larry A. Stockett ("Stockett"), based upon its grant of summary judgment in favor of the Commission. The judgment permanently enjoins Stockett from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act") and Sections 10(b), 13(a), 13(d) and 16(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 12b-20, 12b-25, 13a-1, 13a-11, 13a-13, 16a-2 and 16a-3 thereunder. The judgment further orders Stockett to disgorge illegal profits and prejudgment interest totaling $1,836,181.56, and to pay a third tier civil penalty of $120,000.
The Commission's complaint alleged that between August 1999 and April 2002, Stockett orchestrated a fraudulent scheme regarding Hightec, Inc. ("Hightec") and an affiliated company, The S.I.N.C.L.A.R.E. Group, Inc. ("Sinclare"), two publicly held entities of which he was at relevant times the sole officer and director. The complaint alleged that Stockett issued numerous false press releases and other public statements concerning, among other things, Stockett's disciplinary history and the legal status and current business operations of Hightec and Sinclare. According to the complaint, Stockett, among other things, falsely represented that Hightec, through a subsidiary, U.S. Cement, had significant access to capital as well as established business operations in the cement industry that utilized certain advanced technologies. The complaint alleged that in fact, U.S. Cement had no significant operations and did not have access to the technology as claimed. The complaint further alleged that Stockett falsely represented that Sinclare owned a "railroad entertainment complex" valued at $6.9 million, and that Stockett disseminated revenue projections for Hightec and its subsidiaries that were fraudulent, in that they had no reasonable basis in fact. The complaint further alleged that. while disseminating these false and misleading statements, Stockett sold restricted Hightec stock in unregistered transactions, realizing profits of approximately $583,687. The complaint further alleged that, between 1996 and 2002, Stockett also failed to file mandatory periodic and current reports with the Commission on behalf of Hightec and Sinclare.