SEC Announces 100 Percent Return of Funds to Defrauded Bio-Heal Investors
FOR IMMEDIATE RELEASE
Washington, D.C., Nov. 14, 2007 - The Securities and Exchange Commission today announced the mailing of checks totaling more than $2.7 million to 833 investors who were victims of the fraudulent promotion and sale of illegally issued shares of Bio-Heal Laboratories, Inc. The Fair Fund distribution represents a 100 percent return of the defrauded investors' money.
In April 2005, the Commission sued Bio-Heal, a publicly-held company that claimed to develop topical natural healing products in Nicaragua, and five other corporate entities that received the illegally issued shares and sold them. When the Commission filed its complaint in the U.S. District Court for the Southern District of Florida, it obtained an emergency asset freeze against Bio-Heal and the other entities, freezing their proceeds from the sale of the illegally issued shares.
"The Commission's quick action in this case ensured this money would not be dissipated and lost to innocent investors," said David Nelson, the Commission's Regional Director in Miami. "We are particularly gratified that it has resulted in a 100 percent return of investors' losses through this Fair Fund."
In the Fair Funds provisions of the Sarbanes-Oxley Act of 2002, Congress gave the Commission increased authority to distribute ill-gotten gains and civil money penalties to harmed investors. To date, the Commission has returned more than $3 billion to investors through Fair Fund distributions.
The Commission's complaint against Bio-Heal alleged the company improperly issued 12 million shares of its stock to several entities without a restrictive legend based on a fraudulent attorney opinion letter claiming they were exempt from registration with the Commission. The complaint further alleged that two of those entities then dumped their Bio-Heal shares on the market at the same time as the stock was being fraudulently touted to investors over the Internet.
The Commission obtained a final judgment by consent against Bio-Heal, and default final judgments against the entities that received and sold the Bio-Heal shares, in April 2006, at which time the District Court also created the Fair Fund. The investors who were mailed distributions today bought Bio-Heal stock during the fraudulent touting in February, March, and April 2005.
Questions regarding the Fair Fund distribution may be directed to the Court-appointed distribution agent, Melanie E. Damian, Esq., by:
- Visiting the fund Web site at http://www.biohealfund.com;
- Calling toll-free 1-800-648-0755;
- Writing to Melanie E. Damian, Esq. at either Damian & Valori LLP, 1000 Brickell Avenue, Suite 1020, Miami, FL, 33131 or c/o Global Risk Solutions, Inc., P.O. Box 310130, Miami, FL, 33231.