U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18955 / November 2, 2004
SECURITIES AND EXCHANGE COMMISSION v. BARRINGTON SCHNEER, Case No. 04-22743-CIV-UNGARO-BENAGES/BROWN (S.D. Fla., filed October 29, 2004).
SEC ALLEGES FRAUD AGAINST FORMER VICE-PRESIDENT OF CORPORATE DEVELOPMENT OF AVENTURA, FLORIDA-BASED INTERNET COMPANY
The Securities and Exchange Commission announced that on October 29, 2004, it filed a civil injunctive action against Barrington Schneer, the former vice-president of corporate development of GetAnswers, Inc., an Internet company headquartered in Aventura, Florida.
According to the Commission's complaint, from at least January 2001 through January 2003, Schneer and others raised approximately $7.5 million from hundreds of investors nationwide, primarily physicians, through an in-house boiler room operation. The complaint also alleges that GetAnswers, through its offering and marketing materials and/or sales representatives, made numerous false representations and omissions to investors relating to, among other things, the experience of GetAnswers' president and chief executive officers in starting successful Internet companies, GetAnswers' affiliation with a college, the use of investor proceeds, the safety and profitability of an investment in the company, and its compliance with all securities laws. In addition, the complaint alleges, among other things, that Schneer drafted, reviewed or approved GetAnswers' private placement memoranda and marketing materials that were replete with the material misrepresentations and omissions set forth above, and that Schneer participated in the diversion of investor money to fund business projects such as an offshore Internet bank and a multimedia center. The complaint charges Schneer with violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission is also seeking a sworn accounting, a permanent injunction, disgorgement of ill-gotten profits, and the imposition of a civil money penalty and a penny stock bar.
Previously, on January 10, 2003, the Commission filed an emergency civil injunctive action against GetAnswers, James Koenig, GetAnswers' chief executive officer and president, and Robert Cournoyer, GetAnswers' chief operating officer, seeking to halt an on-going fraudulent offering of unregistered securities by GetAnswers. Securities and Exchange Commission v. GetAnswers, Inc., et al., Case No. 03-20048-KING-O'SULLIVAN. On January 10, 2003, the Honorable James Lawrence King, United States District Judge for the Southern District of Florida, entered, among other things, a temporary restraining order and an asset freeze against all of the defendants and appointed a receiver over GetAnswers. Subsequently, on March 3, 2004, the Commission filed a motion to amend the complaint to add Schneer, Charles B. Ehrlich and David Nepo as defendants. On March 17, 2004, the amended complaint was filed against Ehrlich and Nepo.
For further information, see Lit. Rel. No. 17933 / Jan. 15, 2003. (FL-2888)