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IN THE UNITED STATES DISTRICT COURT
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Securities and Exchange Commission, Plaintiff, Donald John Christensen, II, Jack E. Uselton, Marc R. Tow, George W. Guttman, Joseph M. Blumenthal, and Mountain Energy, Inc. Defendants. |
: |
Civil No. _______________
COMPLAINT |
Plaintiff Securities and Exchange Commission ("Commission") alleges:
1. The defendants in this action engaged in an illegal "pump-and-dump" scheme in the securities of Mountain Energy, Inc., a start-up energy company headquartered in Houston, Texas. During an eight-week period in the spring and summer of 1998, Mountain Energy issued six fraudulent press releases. These press releases, authored variously by defendants Donald John Christensen, II ("Christensen"), Jack E. Uselton ("Uselton") and Marc R. Tow ("Tow"), misrepresented, among other things, the ownership, nature and value of certain mineral rights the company had purportedly acquired or was about to acquire.
2. The fraudulent press releases dramatically elevated the price of Mountain Energy's stock. Between mid-May and early June 1998, the price of Mountain Energy stock, which had been trading at 4¢ to 5¢ per share, jumped significantly, reaching a high of $1.75 per share on June 2. The daily trading volume in Mountain Energy stock during this period was as much as thirty times that in the preceding months. Contemporaneously with the publication of the press releases, Christensen authorized the issuance of over 10 million shares of the company's stock (almost doubling the issued and outstanding stock at the end of 1997) to defendants George W. Guttman ("Guttman"), Joseph M. Blumenthal ("Blumenthal"), and Blumenthal's business partner. All three men immediately resold their stock in the open market for total profits of approximately $3.6 million. Guttman kicked back at least $896,000 of his profits to Christensen.
3. Mountain Energy, Christensen, Uselton, and Tow, directly and indirectly, have engaged, are engaged and, unless restrained and enjoined, will continue to engage in acts, transactions, practices and courses of business that constitute violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. §77q(a)] and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. §78j(b)] and SEC Rule 10b-5 promulgated thereunder [17 C.F.R. §240.10b-5].
4. Mountain Energy, Christensen, Guttman, and Blumenthal, directly and indirectly, have engaged, are engaged and, unless restrained and enjoined, will continue to engage in acts, transactions, practices and courses of business that constitute violations of Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§77e(a) and 77e(c)].
5. The defendants will, unless restrained and enjoined, continue to engage in the acts, practices and courses of business alleged herein, and in acts, practices and courses of business of similar purport and object.
6. The Commission brings this action pursuant to the authority conferred upon it by Section 20(b) of the Securities Act [15 U.S.C. §77t(b)] and Sections 21(d) and 21(e) of the Exchange Act [15 U.S.C. §§78u(d) and 78u(e)] to restrain and enjoin the defendants, and each of them, from violating Sections 5(a), 5(c) and 17(a) of the Securities Act [15 U.S.C. §§77e(a), 77e(c) and 77q(a)] and Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and SEC Rule 10b-5 [17 C.F.R. §240.10b-5].
7. This Court has jurisdiction over this action pursuant to Section 22(a) of the Securities Act [15 U.S.C. §77v(a)] and Section 27 of the Exchange Act [15 U.S.C. §78aa].
8. Venue properly lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C. §77v(a)] and Sections 21 and 27 of the Exchange Act [15 U.S.C. §§78u and 78aa] in that the defendant corporation is headquartered in this district, certain of the acts alleged herein occurred in this district, and two of the defendants reside in this district.
9. The defendants, and each of them, directly or indirectly, have used the means and instrumentalities of interstate commerce and of the mails in connection with the acts, practices and courses of business alleged herein.
10. At all relevant times, Mountain Energy, a Nevada corporation, maintained its principal offices in Houston, Texas. Mountain Energy was formed in late May 1998 through a reverse merger between the private company Mountain Resources, Inc. and the public shell company International Casino Cruises, Inc. Mountain Energy purported to be in the energy business, developing and producing previously passed over mineral deposits. At all relevant times, Mountain Energy's common stock was traded on the National Association of Securities Dealers' ("NASD") Over-the-Counter ("OTC") Bulletin Board. Mountain Energy discontinued business operations in August 1998.
11. Donald John Christensen, II resides in Houston, Texas. Until late May or early June 1998, Christensen was the chairman of the board of directors and the chief executive officer of International Casino, a public company that Christensen had operated under a variety of names for the past three years. Christensen is currently working as a consultant to various OTC companies in the Houston area.
12. Jack E. Uselton resides in Houston, Texas, and was the chairman and chief executive officer of Mountain Energy (f/d/b/a International Casino) from its formation in May 1998 until August 1998, when he resigned. Uselton currently owns and operates a private company that is drilling oil wells in east Texas.
13. Marc R. Tow resides in Costa Mesa, California, and is an attorney at law. In addition to his private legal practice, Tow controls several companies that buy and sell interests in tax delinquent real estate, including Government Property Advisors, Inc.
14. George W. Guttman resides in Brooklyn, New York, and works as a consultant to several companies located in the U.S. and Canada whose securities trade in the OTC market. Between 1980 and 1996, Guttman worked as a stockbroker at a number of firms. Since 1996, Guttman has worked as a "consultant" to several OTC companies, including International Casino. In 1999, the NASD permanently barred Guttman from association in any capacity with a member firm for making unauthorized transactions in a client's account. In June 1999, Guttman pled guilty in the Southern District of New York to a felony charge of making false statements to the Securities and Exchange Commission.
15. Joseph M. Blumenthal resides in Brooklyn, New York. Between 1988 and 1996, Blumenthal worked at a number of different broker-dealers. Since that time, Blumenthal has worked as a "consultant" to several OTC companies, including International Casino, and purportedly specializes in arranging financing and business combinations for them.
16. At the beginning of 1998, International Casino was essentially a public shell controlled by Christensen. It had no significant assets, operating revenues or business activities. Its common stock was traded, however, on the NASD OTC Bulletin Board.
17. Between January and March 1998, Christensen authorized the issuance of a total of approximately 3.9 million unrestricted shares of International Casino common stock to Growth International, Ltd., a dummy corporation controlled by George Guttman, and to Merit Investment Corp., a broker-dealer located in Toronto, Ontario, which held the shares on Guttman's behalf. Guttman sold all of these shares through brokerage accounts he maintained in the name of Growth International at Merit Investment. Guttman made a total profit of approximately $457,000 from these sales, of which he paid $241,000 to Christensen.
18. No registration statement was filed with the Commission or was in effect with respect to these securities, and no exemption from the registration requirements was available with respect to either the issuance of the shares by International Casino to Guttman and Merit Investment, or Guttman's subsequent sale of the shares in the open market.
19. During the first three months of 1998, Christensen also authorized the issuance of 1.2 million unrestricted shares of International Casino common stock to Swordfish Holdings, Inc., a shell corporation owned by his brother but controlled by Christensen.
20. No registration statement was filed with the Commission or was in effect with respect to these securities, and no exemption from the registration requirements was available with respect to the issuance of the shares by International Casino to Swordfish Holdings.
21. During the first three months of 1998, California attorney Tow acquired interests, at tax sales, in the mineral rights to approximately 30 properties in West Virginia. Tow acquired these rights for nominal amounts on behalf of Government Property Advisors ("GPA"), a private company controlled by him that managed investor funds to be used for the purchase and sale of tax-defaulted properties. Due to the operation of West Virginia law, GPA did not take title to the mineral rights to any of these properties for months.
22. In or about March 1998, Tow met Uselton, and the two men formed a partnership purportedly for the purpose of exploiting GPA's mineral rights. Tow and Uselton agreed to acquire a public shell corporation to use as a capital-raising vehicle for their enterprise.
23. On or about April 23, 1998, Tow formed a corporation named Mountain Resources, Inc. and appointed himself and Uselton as its two directors. Tow and Uselton agreed to use Mountain Resources to hold the mineral rights being acquired by Tow pending the acquisition of a public shell corporation.
24. In April and May 1998, Uselton and Christensen negotiated the merger of the private shell corporation Mountain Resources and the public shell International Casino. The principal effect of this transaction was to transfer control of International Casino to Tow and Uselton. The merger agreement provided that International Casino would give Tow and the entities managed by him a controlling stock interest in the company in exchange for the mineral rights in the 30 properties that he had acquired in West Virginia. The parties further agreed that Uselton would be named the chief executive officer of the new company. On or about May 21, 1998, the parties executed a merger agreement.
25. On May 21, 1998, International Casino issued 50 million shares of its restricted common stock to Tow and the entities controlled by him. Tow, however, did not transfer to International Casino the legal interest in the West Virginia properties as provided by the merger agreement.
26. In early June 1998, International Casino was renamed Mountain Energy, Inc.
27. Between April 23 and May 28, 1998, International Casino issued three press releases describing its merger agreement with Mountain Energy. All three releases contained materially false and misleading statements concerning the terms of the acquisition agreement, and the ownership, nature and value of the assets that Mountain Energy had purportedly acquired.
28. Christensen drafted all three press releases, and Uselton reviewed, edited and approved them. Tow was aware, at the time of their publication, that the press releases were materially inaccurate.
29. On April 23, 1998, International Casino publicly announced, in the first of these press releases, that it had agreed to enter into a reverse merger with "Mountain Energy, an oil and gas concern based in Houston, Texas" and that International Casino would pay for the transaction "with restricted common shares only" (emphasis added.) The release then identified Mountain Energy as follows:
Mountain Energy owns and controls the mineral rights in West Virginia that contain approximately 1.98 billion cubic feet of gas and 10,000,000 tons of coal, as well as other properties that all combined, have an estimated fair market value in excess of $200,000,000.
30. The April 23 press release was materially false and misleading in the following respects:
(a) The release misrepresents the compensation that was to be paid for Mountain Energy's assets, stating that it consisted of restricted stock "only," when in fact there was also a side agreement that Christensen would provide Uselton and Tow personally with a total of 3 million unrestricted shares of Mountain Energy stock.
(b) Mountain Energy did not "own" any of the properties described in the release. At the time of its publication, Tow's company GPA had submitted bids in tax sales in West Virginia to acquire mineral rights in the properties identified in the release, but GPA did not yet hold title to any of them. Tow and Uselton had an oral agreement that Tow would assign GPA's rights to Mountain Energy upon consummation of the merger. Mountain Energy had no other interest in these properties. Contrary to the terms of the merger agreement, Tow did not transfer the legal interest in any of the West Virginia properties to Mountain Energy until July 8, 1998, after the company had become the subject of an investigation by the SEC. On that date, Tow legally assigned to Mountain Energy the interests in the mineral rights in 15 of the 30 properties that were the subject of the merger agreement. Tow never transferred GPA's legal interest in the remaining properties to Mountain Energy.
(c) Mountain Energy had no reasonable basis to claim the properties contained 10 million tons of coal and 2 billion cubic feet of coal methane gas worth $200 million. No engineering study had been performed on the properties, and no one with geological training had rendered an opinion on the potential mineral content of the properties.
31. On May 21, 1998, International Casino issued a press release announcing that it had consummated the merger with Mountain Energy. This release republished the statements from the prior release that: (a) the acquisition had been paid for with restricted shares of stock only and (b) Mountain Energy owned gas and oil rights worth $200 million. The release went on to state that Mountain Energy would have 70 million shares of stock outstanding after the merger, which "translates to approximately $2.85 per share."
32. The May 21 press release was materially false and misleading in that:
(a) The statements concerning the ownership of the property, the consideration involved, and the value of Mountain Energy's assets were false and misleading as described in paragraph 30 above.
(b) The statement that there were 70 million shares outstanding was false and misleading because this number failed to include the approximately 14 million shares that Christensen had issued or was in the process of issuing to Guttman, Joseph Blumenthal and his partner, described in paragraphs 17 through 20 above and paragraphs 38 through 44 below. The 70 million figure also fails to include the 3 million shares that Christensen had agreed to issue to Tow and Uselton.
(c) The $2.85 per share value ascribed to the Company's stock was based on the false assumptions that Mountain Energy had $200 million in assets and 70 million shares of stock outstanding.
33. On May 28, 1998, Mountain Energy issued a press release stating that it owned "30 separate properties in West Virginia with approximately 1,300 acres owned in fee and an additional 1,300 acres of mineral rights" and that it was continuing to acquire additional acreage. The release further stated that "reserve estimates by the U.S. Geological Survey" indicated that these properties contained in excess of 10 million tons of bituminous coal and 2 billion cubic feet of coal methane gas. The net asset value of these reserves, the company contended, had been conservatively estimated at between $110 and $180 million.
34. The May 28 press release was materially false and misleading in the following respects:
(a) Mountain Energy did not own any properties, or the mineral rights to any properties, in West Virginia or anywhere else, as of the date of this release. As more fully alleged in paragraph 30(b) above, although Tow's company GPA had obtained, for nominal sums at tax sales, the mineral rights in certain properties in West Virginia, none of these had yet been transferred to Mountain Energy.
(b) Mountain Energy did not own any property "in fee" and the oral agreement with Tow did not provide for the transfer of any such property.
(c) The U.S. Geological Survey had not performed any reserve estimates of either the coal or the gas deposits on the properties that Mountain Energy claimed to own.
(d) The Company had no reasonable basis for valuing the possible coal reserves on the West Virginia properties at $100 million to $170 million. Nor did it have any basis for valuing the possible gas reserves at $10 million. As described in paragraph 30(c) above, no engineering study had been conducted.
(e) The statement that Mountain Energy intended to develop its assets is misleading because Mountain Energy had no revenues from business operations and no committed sources of investment capital and, therefore, lacked the financial ability to engage in actual mining activities.
35. Christensen and Uselton knew or recklessly disregarded facts indicating that International Casino's press releases of April 23, May 21 and May 28, 1998, were materially false and misleading, as described in paragraphs 16 through 34 above.
36. The false and misleading press releases caused a substantial increase in the price of International Casino/Mountain Energy stock. Prior to the May merger announcement, International Casino stock traded in the range of 4¢ to 5¢ per share on average daily volume of less than one-half million shares. The price of International Casino stock increased during the three-week period from May 18 (three days prior to the second release) to June 8, 1998 (the date of the fourth release), trading between $.55 and $1.75 per share on average daily volume of approximately 7.4 million shares. The stock reached a high of $1.75 per share on June 2, three business days after the May 28 release containing the purported USGS estimate and other fraudulent misrepresentations.
37. Uselton, knowing or recklessly disregarding facts indicating the statements to be false and misleading, orally communicated to investors and potential investors many of the misrepresentations contained in the April and May press releases, as well as making other false statements, stating, among other things, that:
(a) Mountain Energy owned the West Virginia properties;
(b) the properties contained minerals that were worth at least $200 million; and
(c) Mountain Energy would be a billion or a multi-billion dollar company in three to five years.
38. Contemporaneously with the negotiation and execution of the merger agreement and with the publication of the press releases, Christensen authorized the issuance of over 10 million additional shares of International Casino stock to Guttman, Blumenthal and Blumenthal's business partner Karlton Zamost, who is now deceased. Christensen authorized the issuance of over 5 million of these shares on the day of, and in the weeks immediately following, the announcement of the merger.
39. Between April and early June 1998, prior to delivering control of the company to Uselton, Christensen caused over 7 million unrestricted shares of International Casino stock to be issued to Guttman in the names of his two dummy corporations, Growth International and C. Saw Investments, Ltd., and in the name of Merit Investment, which held these shares on Guttman's behalf.
40. Between April and early July 1998, Guttman sold approximately 7 million shares of the International Casino stock that he had received from Christensen into the open market for $2.6 million. During this period, Guttman paid a total of $655,700 to the accounts of two entities controlled by Christensen. Christensen used these funds for his personal benefit.
41. No registration statement was filed with the Commission or was in effect with respect to these securities, and no exemption from the registration requirements was available with respect to either the issuance of the shares by International Casino to Guttman and Merit Investment, or Guttman's subsequent sale of the shares in the open market.
42. In April and May 1998, Christensen caused an additional 3 million shares of International Casino stock to be issued to two dummy corporations, MLJ Management, Inc. and Karvi Corporation, controlled, respectively, by Blumenthal and his business associate Zamost. Christensen also directed his brother to transfer to Blumenthal the 1.2 million shares of International Casino stock held in the name of Swordfish Holdings, Inc., described in paragraphs 19 and 20 above.
43. Blumenthal and Zamost began selling the International Casino stock through retail brokerage accounts immediately upon receiving it. Blumenthal liquidated his position by June 9, 1998, and Zamost liquidated his by July 1, obtaining gross profits of $499,000 and $506,000, respectively.
44. No registration statement was filed with the Commission or was in effect with respect to these securities, and no exemption from the registration requirements was available with respect to either the issuance of the shares by International Casino to Blumenthal and Zamost, or the subsequent sale of the shares by Blumenthal and Zamost in the open market.
45. By corporate resolutions dated May 27, 1998, Christensen resigned as an officer and director of International Casino, and appointed Uselton to serve as a director.
46. During June 1998, Mountain Energy issued three press releases, each of which purports to describe an agreement made by Mountain Energy to acquire an additional 8,000 acres of mineral rights. This acquisition, had it occurred, would have quadrupled the company's purported assets.
47. Uselton drafted each of the three June press releases, and Mark Tow reviewed, edited and approved the press release of June 24.
48. In its press release of June 8, 1998, the company announced that its "purchase offer to acquire an additional 8,000 acres of mineral reserves" in West Virginia had been accepted. The release did not identify the seller or any of the terms of the transaction.
49. The June 8 press release was materially false and misleading in that no person or entity had accepted any "purchase offer" from Mountain Energy to acquire 8,000 acres of mineral reserves in West Virginia.
50. On June 18, 1998, Mountain Energy issued a press release that stated in pertinent part:
MTEI presently owns 20,000 acres and controls the mineral rights in West Virginia that contain in excess of 2 billion cubic feet of gas and 10 million tons of coal. Additionally, the purchase of 8,000 acres has been completed and Stag [sic] Engineering is currently doing reserve studies to arrive at the present net asset value of these properties.
51. The June 18, 1998 press release was materially false and misleading in that:
(a) Mountain Energy did not own 20,000 acres in West Virginia.
(b) The company had no reasonable basis to state that it controlled mineral rights in West Virginia that contained in excess of 2 billion cubic feet of gas and 10 million tons of coal.
(c) The company had not purchased an additional 8,000 acres of land.
(d) The release misrepresents the status of the reserve study. Although Uselton did enter into a contract with Stagg Engineering in mid-May to study the mineral resources on the properties he hoped to acquire from Tow, Stagg Engineering never began this study because it did not receive sufficient information from Mountain Energy to conduct it.
52. On June 19, 1998, Uselton requested that Mountain Energy's stock transfer agent issue 3 million shares of the company's unrestricted stock to a shell corporation controlled by Tow. Shortly thereafter, the transfer agent refused to issue these shares.
53. On June 24, 1998, Mountain Energy issued a press release announcing the hiring of additional management personnel and purportedly correcting its press release of June 18. On the second page of the June 24 release, the company stated:
MTEI [Mountain Energy] wishes to correct and clarify a previous release dated June 18 in regard to a typographical error stating 20,000 acres owned and referencing an additional 8,000 acres being purchased.
As of this date, Mountain Energy has purchased and accepted the deed to numerous properties in West Virginia totaling more than 5,000 acres. In addition MTEI has a letter of intent with Pacific Tax Properties to purchase an additional 8,000 acres, plus or minus, pending the evaluation results of a study presently being done by Stagg Engineering Company and the geological and engineering staffs of MTEI.
Providing verification of product in place and on completion and receipt of reserve studies, MTEI will then select specific properties we wish to acquire and negotiate the acquisition. Mountain Energy's strategy is to select and purchase only the properties determined by the above referenced studies that have the most potential to economically and profitably produce oil, gas, coal, or a combination thereof.
54. The June 24 press release was materially false and misleading in the following respects:
(a) Although the release purports to correct the statement in the June 18 release about the amount of acreage the company owned (from 20,000 to 5,000 acres), neither figure is correct. At the time of this release, Mountain Energy did not own 5,000 acres of land, or indeed any quantity of land or the mineral rights thereto, in West Virginia or elsewhere. On or about July 8, 1998, West Virginia deeded the mineral rights to approximately 1,775 acres of land to Mountain Energy pursuant to a legal transfer of interest from Tow's company GPA. This was the only property Mountain Energy ever acquired.
(b) The press release failed to disclose that the agreement between Mountain Energy and Pacific Tax Properties consisted of a non-binding letter of intent, which provided only that Pacific Tax Properties would sell the mineral rights to 8,000 acres of West Virginia property (obtained at tax sales) to Mountain Energy if it did not find a third party cash buyer within six months of the completion of a reserve study. Moreover, Mountain Energy had no rights under the agreement to select specific properties. In addition, Stagg Engineering was not conducting a reserve study of the properties at the time of the release (nor did it do so at any subsequent time).
55. Uselton knew or recklessly disregarded facts indicating that Mountain Energy's press releases of June 8, June 18 and June 24, 1998, were materially false and misleading, as described in paragraphs 16 through 54 above.
56. Tow knew or recklessly disregarded facts indicating that Mountain Energy's press release of June 24, 1998, was materially false and misleading, as described in paragraphs 16 through 54 above.
57. Mountain Energy's stock reached a high of $1.75 on June 2, 1998, despite the massive sales by Guttman, Blumenthal and Zamost. Thereafter, the share price of the stock steadily declined. By the end of June 1998, the stock traded in the low 30¢ range.
58. On July 29, 1998, the Commission suspended trading in Mountain Energy stock for a period of ten trading days, as provided by statute.
59. On August 17, 1998, Mountain Energy announced that it had discharged all of its employees and that Uselton had resigned as an officer and director.
60. Since the Commission ordered the trading suspension in Mountain Energy stock, there has been no active market in the stock. Mountain Energy stock presently trades on the Vancouver Stock Exchange for approximately $.001 per share.
First Claim
(Violations of the Antifraud Provisions of the Securities Act by
Defendants Mountain Energy, Christensen, Uselton, and Tow)
61. Paragraphs 1 through 60 are incorporated herein by reference.
62. Defendants Mountain Energy, Christensen, Uselton and Tow, and each of them, directly or indirectly, in the offer or sale of securities, by the use of the means or instruments of transportation or communication in interstate commerce or by use of the mails:
(a) have employed, are employing, or are about to employ devices, schemes or artifices to defraud;
(b) have obtained, are obtaining or are about to obtain money or property by means of untrue statements of material fact and omissions to state materials facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or
(c) have engaged, are engaged, or are about to engage in transactions, acts, practices and courses of business which operated or would operate as a fraud upon purchasers of securities.
63. By reason of the foregoing, defendants Mountain Energy, Christensen, Uselton, and Tow, and each of them, have violated and are violating Section 17(a) of the Securities Act [15 U.S.C. §77q(a)].
64. Paragraphs 1 through 60 are incorporated herein by reference.
65. Defendants Mountain Energy, Christensen, Uselton and Tow, and each of them, directly and indirectly, by the use of the means and instrumentalities of interstate commerce, or of the mails, or of the facilities of a national securities exchange in connection with the purchase and sale of securities:
(a) have employed, are employing, or are about to employ devices, schemes or artifices to defraud;
(b) have made, are making or are about to make untrue statements of material facts or omissions to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or
(c) have engaged, are engaged or are about to engage in acts, practices or courses of business which operated or would operate as a fraud or deceit upon any person.
66. By reason of the foregoing, defendants Mountain Energy, Christensen, Uselton and Tow, and each of them, have violated and are violating Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and Commission Rule 10b-5 [17 C.F.R. §240.10b-5].
67. Paragraphs 1 through 60 are incorporated herein by reference.
68. Defendants Mountain Energy, Christensen, Blumenthal and Guttman, and each of them, directly or indirectly, have made use of the means or instruments of transportation or communication in interstate commerce or of the mails to offer and sell securities through the use or medium of prospectus or otherwise when no registration statement had been filed or was in effect as to such securities and when no exemption from registration was available.
69. By reason of the foregoing, defendants Mountain Energy, Christensen, Blumenthal and Guttman have violated Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§77e(a) and 77e(c)].
Wherefore, the Commission respectfully requests that this Court:
I.
Issue a permanent injunction restraining and enjoining defendant Mountain Energy, and its predecessors, successors, agents, servants, employees, attorneys-in-fact, and those persons in active concert or participation with it, and each of them, from engaging in transactions, acts, practices, courses of business, and conduct of similar purport and object, in connection with transactions which, directly or indirectly, constitute violations of the provisions of Section 5(a), 5(c) and 17(a) of the Securities Act [15 U.S.C. §§77e(a), 77e(c) and 77q(a)] and Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and Rule 10b-5 thereunder [17 C.F.R. §240.10b-5].
II.
Issue a permanent injunction restraining and enjoining Christensen and his agents, servants, employees, attorneys-in-fact, and those persons in active concert or participation with him, and each of them, from engaging in transactions, acts, practices, courses of business, and conduct of similar purport and object, in connection with transactions which, directly or indirectly, constitute violations of the provisions of Section 5(a), 5(c) and 17(a) of the Securities Act [15 U.S.C. §§77e(a), 77e(c) and 77q(a)] and Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and Rule 10b-5 thereunder [17 C.F.R. §240.10b-5].
III.
Issue a permanent injunction restraining and enjoining Uselton and Tow, and their agents, servants, employees, attorneys-in-fact, and those persons in active concert or participation with them, and each of them, from engaging in transactions, acts, practices, courses of business, and conduct of similar purport and object, in connection with transactions which, directly or indirectly, constitute violations of the provisions of Section 17(a) of the Securities Act [15 U.S.C. §77q(a)] and Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and Rule 10b-5 thereunder [17 C.F.R. §240.10b-5].
IV.
Issue a permanent injunction restraining and enjoining Blumenthal and Guttman and their agents, servants, employees, attorneys-in-fact, and those persons in active concert or participation with them, and each of them, from engaging in transactions, acts, practices, courses of business, and conduct of similar purport and object, in connection with transactions which, directly or indirectly, constitute violations of the provisions of Section 5(a) and 5(c) of the Securities Act [15 U.S.C. §§77e(a) and 77e(c)].
V.
Enter an order requiring Christensen, Blumenthal and Guttman to account for and to disgorge all proceeds (together with prejudgment and post-judgment interest) resulting from the securities transactions complained of herein.
VI.
Enter an order requiring Christensen, Uselton and Tow to pay civil fines and/or penalties under Section 20(d) of the Securities Act [15 U.S.C. §77t(d)] and Section 21(d) of the Exchange Act [15 U.S.C. §78u(d)].
VII.
Enter an order requiring Blumenthal and Guttman to pay civil fines and/or penalties under Section 20(d) of the Securities Act [15 U.S.C. §77t(d)].
VIII.
Enter an order barring Christensen and Uselton from serving as officers and directors of any public company under Section 20(d) of the Securities Act [15 U.S.C. §77t(d)] and Section 21(d) of the Exchange Act [15 U.S.C. §78u(d)].
IX.
Grant all further relief, legal or equitable, that the Court believes is warranted under the circumstances.
| Respectfully submitted, | |
| Dated: September __, 2001 | __________________________
Carleasa A. Coates
U.S. Securities and Exchange Commission
Of Counsel: Thomas C. Newkirk
U.S. Securities and Exchange Commission
|
| LOCAL COUNSEL
Gregory A. Serres
|
http://www.sec.gov/litigation/litreleases/lr17144complaint.htm
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