U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19537 / January 20, 2006
Accounting and Auditing Enforcement Release No. 2366 / January 20, 2006
Securities and Exchange Commission v. Stansbury Holdings Corporation, Aldine J. Coffman, Jr., Dennis R. Staal, CPA, Richard E. Sellers, CPA, and Sellers & Associates P.C., Civil Action No. 06-CV-00088 (D. Colo.)
The Securities and Exchange Commission announced today that it filed civil fraud charges against Stansbury Holdings Corporation, a mining company, and two former officers, as well as aiding and abetting charges against the company's auditors. In the suit, filed in federal court in the District of Colorado, the Commission alleges that former chief executive officer Aldine J. Coffman, Jr. of Denver, Colorado; former chief financial officer Dennis R. Staal of Chadron, Nebraska; and Richard E. Sellers and Sellers & Associates P.C. of Henderson, Nevada, Stansbury's auditors, caused Stansbury to overstate its assets in numerous periodic filings and in offering documents.
According to the complaint, for the period June 30, 1999 through March 31, 2002, Stansbury valued certain of it mining properties at more than $18 million despite numerous events demonstrating they were worth far less. The complaint alleges that the defendants failed to disclose possible losses and make necessary adjustments based on foreclosure proceedings affecting Stansbury's largest assets.
The complaint alleges that by its conduct, Defendant Stansbury violated Section 17(a) of the Securities Act of 1933 (Securities Act) and Sections 10(b), 13(a), 13(B)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-13 and 13b2-1. The complaint also alleges that Coffman and Staal violated Section 17(a) of the Securities Act and Sections 10(b) and 13(b)(5) of the Exchange Act and Exchange Act Rules 10b-5 and 13b2-1, and aided and abetted Stansbury's violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1 and 13a-13. The complaint also alleges that Sellers and Sellers & Associates aided and abetted Stansbury's violations of Sections 10(b) and 13(a) of the Exchange Act and Exchange Act Rules 10b-5, 12b-20, 13a-1 and 13a-13. The Commission requests that the court enjoin Stansbury, Coffman, Staal, Sellers and Sellers & Associates from violating or aiding and abetting violations of the antifraud, periodic reporting, record keeping and internal controls provisions of the federal securities laws. The Commission also seeks disgorgement of the salaries Coffman and Staal received during the time period of the false financial statements. In addition, the Commission's complaint asks the court to impose civil monetary penalties, an order permanently barring Coffman and Staal from acting as officers or directors of any public company, and an order barring Coffman from participating in an offering of penny stock.
In a related matter, the Commission instituted administrative proceedings against Michael J. Healey for acting as an unregistered broker-dealer when selling Stansbury securities. (Exchange Act Rel. No. 53144). The Commission previously revoked the registration of Stansbury's securities pursuant to Section 12(j) of the Exchange Act. (Exchange Act Rel. No. 48283).