Robert Papalia and David L. Hunter

U.S. Securities and Exchange Commission

Litigation Release No. 18870 / September 3, 2004

Securities and Exchange Commission v. Robert Papalia and David L. Hunter, Civil Action No. C03-683P (West. Dist. of Wash.)

The Commission announced that the United States District Court for the Western District of Washington entered permanent injunctions against Robert Papalia and David Lynn Hunter In its complaint, the Commission alleged that Papalia and Hunter, both residents of Vancouver, British Columbia, issued false and misleading press releases about their company, Nano World and its business relationships and financing commitments from other companies. These false and misleading press releases caused increases in the price and volume of Nano World's stock. The complaint also alleges that Papalia caused Nano World to file a false report with the SEC about the acquisition of another company and that he caused Nano World to fail to file other quarterly and annual reports.

David Hunter, without admitting or denying the allegations of the complaint, consented to the order entered on March 12, 2004 which permanently enjoins and restrains him from violating the provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Hunter was also barred from acting as an officer or director of a public company for five years. Based on Hunter's sworn financial statement the court determined not to impose a civil penalty.

Robert Papalia appeared before the court in a bench trial on August 9, 2004 and a permanent injunction was entered against him on September 1, 2004. Papalia is permanently enjoined and restrained from violating Sections 10(b) and 13(a) of the Exchange Act and Rules 10b-5, 12b-20, 13a-11 and 13a-13. He was also ordered to pay a civil money penality in the amount of $33,000 ($5,500 for each of the six offending press releases). The court also determined that Papalia is substantially unfit to serve as an officer or director of a publicly held company and as such barred him for acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or that is required to file reports pursuant to Section 15(d).