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U.S. Securities and Exchange Commission

Litigation Release No. 18611 / March 8, 2004

Securities and Exchange Commission v. DCI, et al.,
00 Civ.4664 (RWS) (S.D.N.Y)

DCI DEFENDANTS CONSENT TO PERMANENT INJUNCTIONS; DEFENDANT JOSEPH J. MURPHY AGREES TO PAY CIVIL MONEY PENALTY OF $75,000.

The Securities and Exchange Commission today announced that it has settled its litigation against defendants DCI Telecommunications, Joseph J. Murphy, Russell B. Hintz, and relief defendant Grace P. Murphy. The settlements were approved by the United States District Court for the Southern District of New York.

Without admitting or denying the allegations in the Commission's amended complaint, defendant DCI consented to be permanently enjoined from violating Sections 5(a), 5(c), 17(a)(2) and 17(a)(3) of the Securities Act of 1933 (Securities Act), and Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rules 12b-20, 13a-1 and 13a-13. DCI further consented to have the registration of its common stock revoked pursuant to Exchange Act Section 12(j). Defendant Murphy consented to be permanently enjoined from violating Securities Act Sections 5(a), 5(c), 17(a)(2) and 17(a)(3) and from aiding and abetting violations of Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Exchange Act Rules 12b-20, 13a-1 and 13a-13. Murphy also consented to pay a civil money penalty of $75,000. Defendant Hintz consented to be permanently enjoined from violating Securities Act Sections 17(a)(2) and 17(a)(3), and from aiding and abetting violations of Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Exchange Act Rules 12b-20, 13a-1 and 13a-13.

The Commission dismissed its claim against the relief defendant, Grace Murphy. The Commission's amended complaint alleges, among other things, that the defendants improperly accounted for seven acquisitions and overvalued a purported $15 million contract and $5 million promissory note, causing financial statements that DCI filed with the Commission to be inaccurate. The amended complaint also alleges that Murphy and DCI violated Securities Act Section 5 by distributing securities that were not registered with the Commission and not exempt from registration.

 

http://www.sec.gov/litigation/litreleases/lr18XXX.htm


Modified: 0X/XX/2004