U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19164 / March 31, 2005
SEC v. Tamarak Inc., Vector Corporate Finance, LLC., and Jeffrey M. Messinger, Civ. Action. No. CV05-2396-WJR (CWx) (U.S.D.C. Central District of California)
SEC SUES PARTICIPANTS IN STOCK MANIPULATION SCHEME
On March 31, 2005, the SEC filed suit against Tamarak Inc., a former OTC Bulletin Board company based in Van Nuys, California, Vector Corporate Finance, LLC, a stock promotion firm, and Jeffrey M. Messinger, a principal of Vector. The complaint alleges that the defendants engaged in a manipulation scheme that caused the stock of Tamarak, a shell company with no business operations, to trade as high as $5.00 per share. Each defendant consented on a neither admit nor deny basis, to the entry of a permanent injunction. Messinger has also agreed to pay $50,000 in disgorgement, plus interest, a $50,000 civil penalty, and to be barred from participating in a penny-stock offering. These settlements await Court approval.
According to the SEC's complaint, the scheme commenced in November 2002 with a series of "wash trades" effected by defendant Messinger, to artificially set the price of Tamarak's stock. Thereafter, Tamarak, at the direction of its now deceased president, issued three misleading press releases that contained material misrepresentations and omissions concerning, among other things: (1) Tamarak's plans and financial ability to produce and distribute a television mini-series and movie; (2) Tamarak's projected profits; (3) the purported support by the U.S. Air Force for Tamarak's film projects; and (4) purported discussions between Tamarak and major television and film studios.
Concurrent with the alleged manipulation, Messinger, through defendant Vector, publicly sold approximately 80,000 Tamarak shares into the inflated market in a series of unregistered transactions, from which he received $50,000.
Based on the alleged misconduct, the complaint charges that Tamarak, Vector and Messinger violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. In addition, Vector and Messinger are alleged to have violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933.
Further, the SEC issued an administrative order revoking the registration of Tamarak's securities under Section 12(j) of the Exchange Act, finding that Tamarak failed to comply with the antifraud and periodic reporting provisions of the Exchange Act. The SEC also issued a cease-and-desist order against Richard H. Dorfman, a former principal of Vector, finding that he violated the securities registration provisions in connection with the unregistered distribution of Tamarak stock and ordering him to disgorge $186,062. Both Tamarak and Dorfman agreed to the entry of the orders without admitting or denying the substantive findings therein.
Contact: Harold F. Degenhardt, District Administrator, Fort Worth Office, (817) 978 3821