U.S. Securities and Exchange Commission
Litigation Release No. 18825 / August 10, 2004
SEC v. Autocorp Equities, Inc., Docket No. (2:98CV0562)(USDC, D.UT)
On August 4, 2004, the honorable Judge Paul Cassell entered final judgments against defendants Hillel Sher ("Sher"), Nili Frenkel ("Nili"), Amotz Frenkel ("Frenkel") and Michael Carnicle ("Carnicle"). The Court's order enjoined defendants from future violations of the securities registration and antifraud provisions of the federal securities laws, as well as ordering the defendants to pay disgorgement and civil penalties.
The Commission filed its Complaint against the defendants on August 10, 1998, alleging the defendants engaged in a scheme to inflate the assets of Diamond Entertainment, Inc. by acquiring $5 million in certificates of deposit ostensibly issued by a Russian bank but actually created at a Kinko's copy center in Hollywood, Florida. The Complaint alleged that in order to finance the acquisition of the certificates of deposit, the defendants arranged to have Chariot Entertainment, Inc. issue stock, ostensibly in reliance on the exemption from registration afforded by Regulation S, to a California corporation; those shares were then sold after forty days with $1.5 million of the proceeds used to pay for the certificates of deposit.
The Order against Sher prohibits him from further violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and orders Sher to pay a civil penalty in the amount of $25,000.
The Order against Nili Frenkel prohibits her from further violations of Sections 5(a) and 5(c) of the Securities Act and orders disgorgement of $111,372 together with prejudgment interest in the amount of $120,716.12.
The Order against Amotz Frenkel prohibits him from further violations of Sections 5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and orders him to pay a civil penalty in the amount of $25,000.
The Order against Carnicle prohibits him from further violations of Sections 5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and orders disgorgement of $183,186 together with prejudgment interest in the amount of $203,008.94 and a civil penalty in the amount of $50,000.