Stop Order Proceedings Instituted Against Caribbean Pacific Marketing
The Securities and Exchange Commission today announced that it has instituted proceedings to determine whether to issue an order that would prevent sales of shares in Caribbean Pacific Marketing, Inc., based on allegations that the company's disclosure is misleading.
"The Division of Enforcement is seeking a stop order to protect investors by preventing any potential sales of stock under a materially misleading and deficient offering document," said Eric I. Bustillo, Director of the SEC's Miami Regional Office.
A stop order prevents a company or its shareholders from selling privately-held shares to the public under a materially misleading or deficient registration statement. If a stop order is issued, no new shares can enter the market pursuant to that registration statement until the company has corrected the deficiencies or misleading information contained in the registration statement.
In proceedings instituted against Caribbean Pacific on October 29, 2012, the SEC's Division of Enforcement alleges that Caribbean Pacific's registration statement is materially misleading because it omits any information about William J. Reilly and his position within the company as a de facto executive officer and control person. The Division of Enforcement alleges that Reilly is a disbarred attorney subject to a court order barring him from any penny stock offering, from serving as a corporate office and director, and from violating certain federal securities laws. In addition, Reilly was suspended from appearing or practicing before the Commission as an attorney, with a right to reapply after three years.
The Commission instituted the proceedings against Caribbean Pacific to determine whether the allegations by the Division of Enforcement are true, to give the company an opportunity to respond to the allegations, and to determine whether a stop order should be issued.
On October 23, the U.S. Attorney's Office for the Southern District of Florida filed a criminal complaint against Reilly, alleging securities fraud.
SEC Senior Counsels Trisha D. Sindler and Michelle I. Bougdanos are conducting the SEC's investigation under the supervision of Assistant Regional Director Chedly C. Dumornay, and Adam Schwartz and Christine Nestor will handle the litigation. All are with SEC's Miami Regional Office. The SEC acknowledges the assistance and cooperation of the U.S. Attorney's Office for the Southern District of Florida and the FBI's Miami Division in this matter.