U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19057 / January 28, 2005
Securities and Exchange Commission v. Morgan Cooper et al., 1:05CV00207 (D.D.C.) (January 28, 2005)
SEC FILES CHARGES AGAINST MORGAN COOPER, JAMES J. CAPRIO AND JEFFREY G. NUNEZ FOR UNREGISTERED STOCK SALES
The Securities and Exchange Commission announced today the filing of a civil action against Morgan Cooper, James J. Caprio and Jeffrey G. Nunez in the United States District Court for the District of Columbia.
The Commission alleges in its complaint that in 1999, Cooper retained Caprio and another individual, now deceased, to sell stock for his company, Morgan Cooper, Inc. ("MCII"). According to the complaint, Caprio and the other individual, with the assistance of Nunez, sold hundreds of thousands of MCII shares, raising approximately $1.2 million for the company, without registering those sales with the Commission. The complaint also alleges that Cooper disseminated a number of false and misleading statements in press releases touting MCII. Additionally, Cooper and Caprio failed to file the required reports on Schedule 13D to disclose their ownership interests in MCII, which exceeded 5% of outstanding shares. Cooper also failed to file reports on Forms 3, 4 and 5 to disclose his acquisition and transfer of shares in the company as required of an officer and director.
The Commission alleges in its complaint that Cooper violated Section 5 of the Securities Act of 1933 ("Securities Act") and Sections 10(b), 13(d) and 16(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 13d-1, 13d-2 and 16a-3 thereunder. The Commission also alleges that Caprio violated Section 5 of the Securities Act and Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder. Moreover, the Commission alleges that Nunez violated Section 5 of the Securities Act. The Commission seeks permanent injunctions against and civil penalties from Cooper, Caprio and Nunez; an accounting, disgorgement of illegal gains and prejudgment interest from Caprio and Nunez; and, from Cooper only, an officer and director bar.
In a related enforcement action announced today, the Commission also instituted administrative proceedings against MCII pursuant to Section 12(j) of the Exchange Act to determine whether the registration of the company's securities should be suspended or revoked. In the Commission's Order, the Division of Enforcement alleges that MCII failed to comply with Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder by failing to file any quarterly reports with the Commission since November 30, 2000 and any annual reports since April 19, 2000.