UNITED STATES SECURITIES AND EXCHANGE COMMISSION LITIGATION RELEASE NO. 15984 / November 20, 1998 Securities and Exchange Commission v. Zappa International Corporation, Scott L. Simpson, Scott B. Walker, Equity Management Services, Eagle Vision Holdings Inc., Wayne Nattrass, and Westminster Trading Trust, Civil Action No. 98-CV-213-B (USDC Wyo.) The Commission announced today that it obtained a preliminary injunction against defendants Eagle Vision Holdings Inc., Wayne L. Nattrass, both located in the Seattle, Washington area, and Westminster Trading Trust, located in Richmond, Texas, prohibiting the fraudulent sale of interests in prime bank instrument trading programs which falsely offered guaranteed returns exceeding 200 percent per month, claimed to be sponsored by the Federal Reserve Bank and the International Monetary Fund, and were represented to be guaranteed against risk of loss by the top twenty-five world banks. The preliminary injunction, entered November 18 1998 by Judge Clarence A. Brimmer (D.C. Wyoming), included an order freezing the assets of the defendants and requiring the repatriation of assets. The Court had previously issued a preliminary injunction and asset freeze against defendants Scott B. Walker and Equity Management Services, both of Afton, Wyoming, and Scott L. Simpson and Zappa International Corporation, located in Richmond, Texas. The amended complaint alleges that from September 1996 to the present, the defendants raised approximately $15 million from at least 100 investors through a fraudulent prime bank scheme in which they guaranteed high rate of return and falsely represented that the investors' principal was fully secured by a top European Bank and that the programs were implemented through traders licensed by either the International Monetary Fund or the Federal Reserve Bank. The Commission alleges that the prime bank instruments offered by the defendants do not exist. The Commission alleged that the defendants failed to disclose the use of investor funds to pay solicitation fees to others who referred the investor and to make "Ponzi" payments to earlier investors who sought the return of their investment. The Commission alleged that through their false and misleading statements, the defendants violated the anti-fraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder.