SECURITIES AND EXCHANGE COMMISSION Washington, D.C. Litigation Release No. 16056 / February 10, 1999 Accounting and Auditing Enforcement Release No. 1108 / February 10, 1999 SECURITIES AND EXCHANGE COMMISSION v. WILLIAM T. CRAIG AND SCOTT R. SIECK, No. 99-6165-CIV-Dimitrouleas (S.D. Fla. February 10, 1999). SEC Sues Former Chairman and Consultant to South Florida Microcap Entertainment Company The Securities and Exchange Commission ("Commission") today announced the filing of a civil injunctive action against William T. Craig ("Craig"), the former Chairman and Chief Executive Officer of Madison Group Associates, Inc. ("Madison Group"), a now defunct microcap entertainment company, formerly based in Fort Lauderdale, Florida. The complaint also names Scott R. Sieck ("Sieck"), a former consultant to the company. The Commission’s complaint alleges that from February 1992 through March 1994, Craig caused Madison Group to dramatically overstate the value of its assets in financial statements filed with the Commission. The unconventional assets at issue, including aging libraries of country music video programs, were obtained in exchange for Madison Group stock and were generally valued on the basis of overly optimistic projections about their commercial potential. This misstatement of asset values allowed Madison Group to maintain a listing for its stock on the NASDAQ national market system and to sell its stock to the public at inflated prices. During the same period, Madison Group issued numerous press releases making false claims about its capital position, revenues and business activities. In addition, in an offering purportedly conducted pursuant to Commission Regulation S, the company issued stock to an offshore entity controlled by Craig and Sieck that shortly thereafter sold the shares into United States markets. Craig and Sieck personally profited from their undisclosed role in this abusive Regulation S offering. Finally, Craig failed to comply with the Commission's disclosure requirements in connection with his numerous purchases and sales of Madison Group stock. The matter has been settled with both defendants. Defendant Craig has consented, without admitting or denying the allegations in the complaint, to the entry of an order permanently enjoining him from violating Sections 5 and 17(a) of the Securities Act of 1933 ("Securities Act"), and Sections 10(b), 13b-5 and 16(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 16a-2 and 16a- 3 thereunder, and aiding and abetting violations of Sections 13(a) and 13(b) of the Exchange Act and Rules 13a-1 and 13a- 13 thereunder, and permanently barring him from serving as an officer or director of a publicly-held company. No civil penalty was sought from Craig based upon his demonstrated inability to pay. Defendant Sieck has consented, without admitting or denying the allegations in the complaint, to the entry of an order permanently enjoining him from violating Sections 5 and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Sieck has also consented to the entry of an order that he pay a civil penalty in the amount of $16,000. In a related matter, the Commission instituted public administrative proceedings pursuant to Section 21C of the Exchange Act against Anthony J. Gentile, a former financial officer of Madison Group, to determine if Gentile violated Sections 10(b) and 13(b)(5) of the Exchange Act and Rule 10b-5 thereunder, and caused Madison Group’s violations of Sections 13(a) and 13(b)(2)(A) and (B) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder. In the Matter of Anthony J. Gentile, Exchange Act Rel. No. 34-41037; Accounting and Auding Enforcement Rel. No. 1106 (February 10, 1999). In settlement of that matter, Gentile has consented, without admitting or denying the allegations in the Order Instituting that proceeding, to the entry of an Order requiring that he cease and desist from present or future violations of those provisions of the securities laws. In a second related matter, the Commission instituted public administrative proceedings pursuant to Rule 102(e)(1)(ii) of the Commission's Rules of Practice to determine whether Miguel A. Cabrera, Jr., certified public accountant, and Cabrera & Co., engaged in improper professional conduct in connection with their audits of the financial statements of Madison Group for the fiscal years ended December 31, 1992 and 1993. In the Matter of Miguel A. Cabrera, Jr., CPA, and M.A. Cabrera & Co., P.A., Exchange Act Rel. No. 34-41038; Accounting and Auditing Enforcement Rel. No. 1107. In settlement of that action, Cabrera and Cabrera & Co. have consented to the entry of an order, pursuant to Rule 102(e) of the Commission’s Rules of Practice, permanently suspending both respondents from practicing as an accountant before the Commission, with a right to apply for reinstatement after a period of three years. Finally, the Commission instituted public administrative proceedings, pursuant to Section 12(j) of the Exchange Act, to determine whether to revoke the registration with the Commission of the common stock of Madison Group. In the Matter of Madison Group Associates, Inc., Securities Exchange Act Rel. No. 41039. This enforcement action is part of the Commission’s four-pronged approach to minimizing Microcap fraud: enforcement, inspections, investor education, and regulation. For more information about the SEC’s response to Microcap fraud, visit the SEC’s Microcap Fraud Information Center at: http://www.sec.gov/news/extra/microcap.htm.