UNITED STATES SECURITIES AND EXCHANGE COMMISSION LITIGATION RELEASE NO 15880 / September 14, 1998 SEC V. TEDDY WAYNE SOLOMON AND LISA STEVENS, individually and d/b/a PLATINUM INTERNATIONAL, AND QUANTUM GROUP a/k/a QUANTUM TRADING, LTD. 3:97-CV-2712-H (USDC/ND TX, Dallas Division) On September 9, 1998, in a civil action brought by the Securities and Exchange Commission ("Commission") involving so-called "prime bank" securities, defendants Teddy Wayne Solomon ("Solomon"), Lisa Stevens ("Stevens") and Quantum Group ("Quantum") agreed to the entry of orders of permanent injunction against them. The Commission also filed an amended complaint to seek recovery from four persons who refuse to return $400,000 of funds Solomon obtained from investors. The orders, which enjoin Solomon, Stevens and Quantum from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, arise from charges in the Commission's original complaint that they fraudulently offered and sold interests in fictitious "Prime Bank Instrument" trading programs through Platinum International Associates and Quantum. The complaint alleged that Solomon and Stevens represented, among other things, that they were agents for foreign securities traders trading in large-denomination debt instruments issued by "one of the top 25 world banks," and that an investment in the trading programs would generate "safe, guaranteed" returns of as much as 4,300% annually. In fact, according to the complaint, Solomon's and Stevens' representations were false: the trading programs did not exist, and Solomon and Stevens, in an apparent "ponzi scheme," used funds taken from investors to pay supposed profits to their business associates, to repay other investors, and for their own purposes. The court also ordered Solomon, Quantum and relief defendants Quantum Air Express, Inc., and Cherokee Worldwide Express, Inc., to pay disgorgement, jointly and severally, in the amount of $2,929,510, plus prejudgment interest, with two provisos: (1) that Solomon be credited for any sums actually collected by the Commission in this or any ancillary proceeding against any person holding funds that were paid or given to them by Solomon from the proceeds of the unlawful activities alleged in the complaint; and (2) that any remaining amount be waived based on Solomon's demonstrated financial inability to pay. Stevens was also ordered to pay disgorgement in the amount of $19,210, plus prejudgment interest; however, payment of the full amount was waived based on her demonstrated financial inability to pay. Because of their poor financial condition, no civil money penalties were imposed on Solomon or Stevens. In pursuit of recovering additional investor funds, the Commission amended its original complaint to add four relief defendants to the action; Fidelity International Bank ("FIB"), Dunamis Enterprises International ("Dunamis"), Gilbert Zeigler, and Graham Young. The amended complaint charges that FIB, Dunamis, Zeigler and Young hold, and refuse to return, $400,000 of funds Solomon obtained from investors, which they know to have been obtained illegally by Solomon and subject to an asset freeze order entered by the court.